Notes to Accounts of Unichem Laboratories Ltd.

Mar 31, 2025

2.16. Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable
estimate can be made. If the effect of time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.

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

Contingent assets are not recognised and disclosed only when an inflow of economic benefits is probable.

2.17. Employee benefits

i) Short-term employee benefit

All employee benefits falling due wholly within twelve months after the end of the reporting period are
classified as short-term employee benefits and they are recognised as an expense at the undiscounted amount
in the statement of profit and loss in the period in which the employee renders the related service.

ii) Post-employment benefits
a. Defined contribution plan

The Company contributes fixed contribution to a government administered fund towards Provident Fund,
Labour Welfare Fund, and Employee State Insurance Scheme and will have no legal or constructive obligation to
pay further contribution.

Certain employees of the Company are participants in superannuation plan. The Company has no further
obligations to the superannuation plan beyond its monthly contributions which are periodically contributed to
''''Unichem Laboratories Limited Employees Superannuation Fund Trust", the corpus of which is invested with the
Life Insurance Corporation of India.

The Company''s contribution to defined contribution plans are recognised in the statement of profit and loss in
the period in which the employee renders the related services.
b. Defined benefit plan

The Company provides for gratuity, a defined benefit retirement plan (''the Gratuity Plan'') covering eligible
employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee''s salary and the
tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent
actuary, at each Balance Sheet date using the projected unit credit method. The rate used to discount defined
benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government
Bonds for the estimated term of obligations. The Company fully contributes all ascertained liabilities to
“Unichem Laboratories Limited Employees Gratuity Fund Trust", the corpus of which is invested with the Life
Insurance Corporation of India.

The current service cost and interest on the net defined benefit liability / (asset) is recognised in the statement of
profit and loss. Past service cost are immediately recognised in the statement of profit and loss. Actuarial gains
and losses net of deferred taxes arising from experience adjustment and changes in actuarial assumptions are
recognised in other comprehensive income and are not reclassified to statement of profit and loss in subsequent
periods. Gains or losses on the curtailment or settlement of defined benefit plan are recognised when the
curtailment or settlement occurs.

iii) Other long-term benefits

The Company has other long-term benefits in the form of leave benefits and long-term bonus. The present value of
the obligation is determined based on actuarial valuation using the projected unit credit method carried out by
independent actuary. The rate used to discount defined benefit obligation is determined by reference to market
yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. Actuarial gains
or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions are
recognised immediately in the statement of profit and loss as income or expense. Gains or losses on the curtailment
or settlement of other long-term benefits are recognised when the curtailment or settlement occurs.

2.18. Equity settled share-based payments

Equity-settled share-based payments to employees are measured at the fair value (i.e. excess of fair value over the
exercise price of the option) of the Employee Stock Options Plan at the grant date. The fair value of option at the grant
date is calculated by Black-Scholes-Merton option pricing model. In case the options are granted to employees of the
Company, the fair value determined at the grant date is expensed on a straight-line basis over the vesting period,
based on the Company''s estimate of options that will eventually vest, with a corresponding increase in equity. In case
of the options granted to employees of Company''s subsidiaries, the fair value of options granted to employees of the
subsidiary companies are considered as capital contribution / investment.

The dilutive effect of outstanding options is reflected in determining the diluted earnings per share.

The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of
stock options and transferred to the general reserve on account of stock options not exercised by
employees/surrendered by the employees.

2.19. Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (CODM). Operating Segments are defined as components of an enterprise for which discrete financial
information is available that is evaluated regularly by the CODM, in deciding how to allocate resources and assessing
performance.

2.20. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use or sale. A
qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use or sale.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest expenses
calculated as per effective interest method, exchange difference arising from foreign currency borrowings to the
extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with
the borrowing of funds. To the extent that the Company borrows funds specifically for the purpose of obtaining a
qualifying asset, the Company shall determine the amount of borrowing costs eligible for capitalisation as the actual
borrowing costs incurred on that borrowing during the period less any investment income on the temporary
investment of those borrowings.

2.21. Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will
be received and the Company will comply with its conditions.

Government grants relating to income are recognised in the statement of profit and loss over the period necessary to
match them with the costs that they are intended to compensate.

In case of Exports Promotion Capital Goods (EPCG) scheme, government grants is recognised by deducting grant to
arrive at carrying amount of the assets.

When loans or similar assistance are provided by governments or related institutions, with an interest rate below the
current applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or
assistance is initially recognised and measured at fair value and the government grant is measured as the difference
between the fair value of the loan and the proceeds received.

2.22. Dividend distribution

Final equity dividends on shares are recorded as a liability on the date of approval by the shareholders and interim
equity dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.

2.23. Earnings per equity share

The Basic earnings per equity share is computed by dividing the net profit / (loss) after tax for the year attributable to
the equity shareholders of the Company by weighted average number of equity shares outstanding during the year.
Diluted earnings per equity share are computed by dividing the net profit / (loss) attributable to 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. Dilutive potential equity shares are deemed converted as of the beginning of the period
unless issued at a later date.

The weighted average number of equity shares outstanding during the period and for all periods presented is
adjusted for events, such as bonus shares, share split, etc.

2.24. Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short-term deposits, which
are subject to an insignificant risk of changes in value.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and short-term deposits,
net of outstanding bank overdrafts, if any, as they are considered an integral part of the Company''s cash management.

2.25. Cash flow statement

Cash Flows are reported using Indirect Method, whereby profit / (loss) for the year 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
items 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.

2.26. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a
party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value
except for trade receivables that are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on
initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of
financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the
statement of profit and loss.

Effective interest method:

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future
cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter
period.

Financial assets:

Cash and bank balances

Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all short
term highly liquid investments / mutual funds (with zero exit load at the time of investment) that are readily
convertible into known amounts of cash and are subject to an insignificant risk of changes in value. Other bank
balances include balances and deposits with bank that are restricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business
model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

Financial assets measured at fair value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held
within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell
these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

In respect of equity investments (other than joint ventures) which are not held for trading, the Company has made an
irrevocable election to present subsequent changes in the fair value of such equity instruments in ''other
comprehensive income'' Such an election is made by the Company on an instrument-by-instrument basis at the time
of initial recognition of such equity investments. Amounts presented in other comprehensive income shall not be
subsequently transferred to profit or loss. However, cumulative gain or loss may be transferred within equity.

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair
value through the statement of profit and loss.

Investment in Subsidiaries and Associates

The Company has accounted for its investments in Subsidiaries and Associates at cost less accumulated impairment
losses, if any in its separate financial statements. Where an indication of impairment exists, the carrying amount of the
investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable
amount, it is written down immediately to its recoverable amount and the difference is transferred to the statement of
profit and loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount
is charged or credited to the statement of profit and loss.

Impairment of financial assets [other than investment in subsidiaries and associates]

The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are
not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is
measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an
amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in
which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to
adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an
impairment gain or loss in statement of profit and loss.

De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control
the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts
it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the
proceeds received.

Financial liabilities and equity instruments
Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all
of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured
at amortised cost, using the effective interest rate method where the time value of money is significant. Interest
bearing bank loans and overdrafts are initially measured at fair value and are subsequently measured at amortised
cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the
settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and
loss.

De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only when, the Company''s obligations are discharged,
cancelled or they expire.

Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement

The Company uses derivative financial instruments such as forward currency contracts, interest rate swaps to hedge
its foreign currency risks, interest rate risks, respectively. Such derivative financial instruments are initially recognised
at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value.
Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is
negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the
Statement of Profit and Loss.

Cash flow hedge

The company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the
risk of foreign exchange exposure on highly probable forecast cash transactions. When a derivative is designated as a
cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other
comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the
fair value of the derivative is recognized immediately in the net profit in the Statement of Profit and Loss. If the
hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued
prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the
hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash
flow hedging reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the
cash flow hedging reserve is transferred to the net profit in the Statement of Profit and Loss upon the occurrence of the
related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount
accumulated in cash flow hedging reserve is reclassified to net profit in the Statement of Profit and Loss

2.27. Recent Pronouncements

Ministry of Corporate Affairs (“MCA") notifies new standards of amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March 2025,
MCA has not modified any new standards or amendments to the existing standards applicable to the Company.

5 NON CURRENT ASSETS HELD FOR SALE

5.1 The Company had classified its Investment Property as held for sale since FY 21-22. This is valued at the lower of its carrying amount
and fair value less cost to sell. The fair value of the property is not readily available, however, based on the management and market
assessment, the fair value would be higher than carrying value of the assets. During the year ended 31st March 2025, the carrying
value of such Property is ? 3.28 crores (P.Y. ? 3.35 crores) after being written down by a loss of ? 0.06 crores (P.Y. ? 0.06 crores) which
has been charged off to the statement of profit and loss.

5.2 The Company has entered into an agreement for sale of immoveable property situated at Jogeshwari for a consideration of ? 279.00
crores and it is subject to certain pre-conditions which are under process. Accordingly, carrying value of such assets aggregating to
? 2.21 crores (P.Y. Nil) is classified as''assets held for sale.

5.3 The carrying value of investment in Unichem Laboratories Limited, Ireland ("Unichem Ireland") is transferred to ''asset held for sale.
Also refer note 6.2.

5.4 As at balance sheet date, certain equipment aggregating ? 0.03 (P.Y. N il) are classified as ''asset held for sale''.

5.5 The Company is expecting to dispose off the above assets in the next 12 months.

36.1 It mainly comprises of disputed tax matters towards GST and income tax. Further it includes ? 0.47 crores (P.Y. ? 0.84 crores) towards income
tax / sales tax refund amount kept on hold, GST amount paid under protest / deposit made pending adjudication under the Income tax Act,
1961, the Finance Act, 1994, Central Excise Act, 1944, Central Goods and Services tax Act, 2017 and respective State VAT Acts.

36.2 Bank Guarantees aggregating to ? 5.63 crores (P.Y. ? 2.21 crores) are fully secured against Fixed Deposits with Bank of India.

Future cash outflow, if any, will be based on the outcome of the appeals / writ petition in case of disputed (a) statutory dues and (b)
claims from regulatory authorities. In respect of bank guarantee and letter of credit, the Company does not expect any cash outflow.

B. Other liabilities which are remote in nature

(i) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as debts. The matters
are frivolous and are disputed under various forums. However, in the opinion of the management, these claims are not tenable.

(ii) The Company is involved in certain intellectual property claims / legal proceedings filed against it by the innovators which are
considered to be normal to its business. These proceedings are pending before different authorities / courts . The outcome from these
claims are uncertain due to a number of factors involved in legal trial. Often, these issues are subject to uncertainties and therefore the
probability of a loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Although there can be no
assurance regarding the outcome of any of the intellectual property claims / legal proceedings referred to in this note, the Company
does not expect such liabilities to be significant.

(iii) The Company has filed rectification letters in respect of certain income-tax refunds which have been with held by the department.
The Company is of the view that once the rectification letters are processed by the department, the refunds will be received by the
Company.

In respect of matters stated in B (i) to (ii), the possibility of any liability devolving on the Company is remote and hence, no disclosure as
contingent liability is considered necessary.

37 On 9th July 2014, the European Commission ("EU") decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the
Company and its subsidiary Niche Generics Ltd. ("Niche") contending that they had acted in breach of EU competition law as Niche had, in
early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent
litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the
Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The
General Court of the EU has rejected the appeals vide Order dated 12th December 2018 and confirmed the fine of Euro 13.96 million. The
Company and its subsidiary based on legal advice and merits have filed appeals against the decision of General Court before the Court of

Justice of the EU. On 27th June 2024, the''Court of Justice of the EU'' have upheld the fine of Euro 13.96 million imposed by the''General Court
of the EU'' on the Company and Niche and demand order is awaited.

Considering the above uncertainty in regard to ongoing litigation related to EU matter, during the year ended 31st March 2024, the
management of the Company had made full provision towards EU fine which is disclosed under exceptional item. Outstanding provision
based on the exchange rate as on 31st March 2025 is ? 128.54 crores [P.Y. ? 125.62 crores].

38 (a) Estimated amount of Contracts remaining to be executed (net of advances) on Capital account of ? 33.24 crores (P.Y. ? 46.28 crores) and

on other purchase orders of ? 119.47 crores (P.Y. ? 167.69 crores) are not provided for.

(b) The Company has imported goods under the advance authorisation scheme/ export promotion capital goods scheme to utilise the
benefit of a zero or concessional customs duty rate and has availed packing credit against the export orders. These benefits are subject
to future exports. Such pending export obligations at 31st March 2025 aggregate to ? 408.75 crores (P.Y. ? 266.90 crores).

(c) The Company''s intention is to continue to provide financial support to its subsidiaries [mainly Niche Generics Ltd and Unichem
Farmaceutica Do Brasil Ltda].

(d) Subsequent to the year ended 31st March 2025, the Company has passed resolution to subscribe to the non-cumulative redeemable
preference shares upto GBP 2 million (equivalent ? 22.14 crore) to be issued by Niche Generics Ltd, a wholly owned subsidiary.

(e) Subsequent to the year end 31st March 2025, the Company has passed resolution to provide corporate guarantee to bank of USD 50
million (equivalent ? 427.35 crore) on behalf of Unichem USA Inc., a wholly owned subsidiary for banking facilities availed by them.

39 Credit facilities and term loan facility from Kotak Mahindra Bank availed by the Company and / or its subsidiary, Niche Generics Limited
(United Kingdom), are secured by first and exclusive hypothecation charge on movable property, plant and equipment at Goa as well as by
way of mortgage charge on immovable property being Industrial land and building at Goa. During the financial year ended 31st March
2024, the mortgage charge on immovable property situated at plot bearing CTS No. 510 of Village Oshiwara and CTS No.1 of Village Majas,
Prabhat Estate, Off. S. V. Road, Patel Engineering Road, Jogeshwari (West), Mumbai 400 102 has been released.

Further, credit facilities from Citibank NA., were secured by way of first and exclusive charge on pledge against investments in mutual funds
till July 2024.

During the year, charges were satisfied with Bank of India on stock and book debts.

Further, credit facilities availed by the Holding Company from Axis Bank and HDFC Bank are secured against hypothecation of stock and
debtors.

ECB Term Loan availed by the Company from Citibank N.A., Singapore during the year is secured by first pari-passu charge by way of
hypothecation on movable Plant and Machinery, machinery spares, tools and accessories, non-tradable receivables and other movables,
both present and future, at Company''s factories, premises and godown situated at Goa and Pithampur.

Additionally, all credit facilities have been registered with Registrar of Companies (ROC) within the prescribed due date.

40 As per Ind AS 108 ''Operating Segment'', segment information has been provided under the Notes to Consolidated Financial Statements.

41 41.1 In respect of its investment in wholly owned subsidiary "Unichem Farmaceutica Do Brasil Ltda", Brazil, full impairment loss was

recognised in earlier years against total investment amount of ? 70.87 crores (P.Y. ? 70.87 crores). Impairment loss has been continued
after an internal assessment based on circumstances prevailing as at the balance sheet date such as past performance, results, assets,
expected cash flows, projections, status of product approvals and nature of the market and regulatory conditions.

41.2 In case of the subsidiaries (Niche Generics Ltd., Unichem China Pvt. Ltd. and Unichem Farmaceutica Do Brasil Ltda) the management of
the Company is of the view that performance of these subsidiaries is improving and will turnaround and in case of China Subsidiary it is
at nascent stage.

Note: During the year, the company has not spent any amount on CSR as there was no obligation to spend the same. However, the
company is entitled to carry forward the amount of ? 0.28 crores (PY. ? 0.91 crores ) spent in the earlier years to the subsequent three
financial years which can be set off against the CSR obligation of these years. However, for accounting purpose such excess amount spent is
not considered as prepaid expenses. During the current year, ? 0.63 crores (P.Y. ? 3.28 crores) is lapsed for carry forward.

44 HEDGE ACCOUNTING

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The
Company manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its
foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments for trading or
speculative purposes.

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments
to ensure that an economic relationship exists between the hedged item and the hedging instrument, including whether the hedging
instrument is expected to offset changes in cash flows of hedged items.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the
hedge continues to qualify for hedge accounting, the hedge relationship will be re-balanced by adjusting either the volume of the hedging
instrument or the volume of the hedged item so that the hedged ratio aligns with the ratio used for risk management purposes. Any hedge
ineffectiveness is calculated and accounted in the Statement of Profit and Loss at the time of hedge relationship re-balancing.

The Company offsets a financial asset and a financial liability when it currently has a legally enforceable right to set off the recognized
amounts and the Company intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. During the
year the Company has not settled any such transactions.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely
to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to
significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: actuarial risk, investment risk, liquidity risk, market risk and legislative
risk.

Actuarial Risk:

It is the risk that arises if benefits cost more than expected due to various reasons such as adverse salary growth experience, variability in
mortalitiy rates and withdrawal rates.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields
at the end of the reporting period on government bonds.

Liquidity risk:

A strain on the cash flows might occur on resignation / retirement of employees with high salaries and long duration or at a higher level
hierarchy who accumulate significant benefits.

Market risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets.This risk might be significant
in case of discount rate assumptions as this assumption may vary depending on the yields on the corporate / government bonds and
hence, the valuation of liability might be exposed to fluctuations in the yields as at the valuation date.

Legislative risk:

Risk that arises due to change in legislation / regulation that can result in the risk of increase in the plan liabilties or reduction in the plan
assets which will directly have an affect on the defined benefit obligation.

Investment in mutual funds & bonds:

The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent
the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.

Equity investments :

a) Equity investments traded in an active market determined by reference to their quoted market prices.

b) Investments which are designated through other comprehensive income are fair valued and the changes in fair value is recognised in
other comprehensive income. There are no gains / losses from such investments.

Derivative instruments:

For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward
interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange
rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

54 FINANCIAL RISK MANAGEMENT

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

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

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

Since a major part of the Company''s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in
currency rates would have impact on the Company''s performance. Consequently, the overall objective of the foreign currency risk
management is to minimize the short-term currency impact on its revenue and cash-flow in order to improve the predictability of the
financial performance.

The major foreign currency exposures for the Company are denominated in USD & EURO. Additionally, there are transactions which are
entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges
all trade receivables upto a maximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

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 and where the borrowings are
measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk: The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and
there are no financial instruments with floating interest rates.

Credit risk: Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms
or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as
concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables,
investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company''s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the
customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to
credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit
terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company
uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled
revenues. The Company does not have significant concentration of credit risk related to trade receivables. In the current year, there is no
single external party customer which contributes to more than 10% of outstanding accounts receivable (excluding outstanding from
subsidiaries) as of 31st March 2025. In previous year, there was no single external party customer which contributed to more than 10% of
outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March 2024.

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a
good credit rating. The Company does not expect any losses from non-performance by these counter parties and does not have any
significant concentration of exposures to specific industry sectors.

None of the financial instruments of the Company result in material concentration of credit risk. Geographic concentration of credit risk
relating to trade receivable (other than subsidiaries) is predominantly there in USA i.e. above 10% and less than 10% in other countries.
Refer note 12 for movement in expected credit loss allowance.

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

Capital Management:

Equity share capital and other equity (other than ESOP Reserve and Other Comprehensive Income) are considered for the purpose of
Company''s capital management (refer Statement of Changes in Equity of standalone financial statement). There are no externally
imposed capital requirements on the Company. The Company''s policy is to maintain a strong capital base so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as
the level of dividends on its equity shares. The Company''s objective when managing capital is to maintain an optimal structure so as to
maximize shareholder value.

The Company is predominantly equity financed. Further, the Company''s current assets has always been higher than the liabilities. Also,
current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short-term mutual
funds being far in excess of borrowings / debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March 2025 and 31st March
2024.

56 As on 31st March 2025, the Company has not been declared wilful defaulter by any bank / financial institution or other lender.

57 The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence no disclosure is
required.

58 The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on
number of layers) Rules, 2017.

59 The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign
entities ("Intermediaries"), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons
or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on
behalf of Ultimate Beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities ("Funding Parties") with the
understanding that such entity shall whether, 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 guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

60 No proceedings have been initiated or are pending against the Company as on 31st March 2025 for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

61 The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560 of
Companies Act, 1956 and hence, no disclosure is required.

62 The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

63 There is no transaction that 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.

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

For N. A. Shah Associates LLP

Chartered Accountants

Firm''s Registration No.: 116560W/W100149 ^{Pranay Godh}® ,

Non-Executive, Non-Independent Director (DIN: 00016525)

Bhavin Kapadia Pabitrakumar Bhattacharyya

Partner Managing Director (DIN: 07131152)

Membership No.: 118991 ^{Sanjay Jain}

Chief Financial Officer (Membership no. ACA 110009)

Place: Mumbai Pradeep Bhandari

Date: 22nd May 2025 Head - Legal & Company Secretary (Membership no. ACS 14177)

---

Mar 31, 2024

2.16. Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

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

Contingent assets are not recognised and disclosed only when an inflow of economic benefits is probable.

2.17. Employee benefits

i) Short-term employee benefit

All employee benefits falling due wholly within twelve months after the end of the reporting period are classified as short

term employee benefits and they are recognised as an expense at the undiscounted amount in the statement of profit and loss in the period in which the employee renders the related service.

ii) Post-employment benefits

a. Defined contribution plan

The Company contributes fixed contribution to a government administered fund towards Provident Fund, Labour Welfare Fund, and Employee State Insurance Scheme and will have no legal or constructive obligation to pay further contribution.

Certain employees of the Company are participants in Superannuation plan. The Company has no further obligations to the Superannuation plan beyond its monthly contributions which are periodically contributed to “Unichem Laboratories Limited Employees Superannuation Fund Trust”, the corpus of which is invested with the Life Insurance Corporation of India.

The Company’s contribution to defined contribution plans are recognised in the statement of profit and loss in the period in which the employee renders the related services.

b. Defined benefit plan

The Company provides for gratuity, a defined benefit retirement plan (''the Gratuity Plan'') covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. The Company fully contributes all ascertained liabilities to “Unichem Laboratories Limited Employees Gratuity Fund Trust”, the corpus of which is invested with the Life Insurance Corporation of India.

The current service cost and interest on the net defined benefit liability / (asset) is recognised in the statement of profit and loss. Past service cost are immediately recognised in the statement of profit and loss. Actuarial gains and losses net of deferred taxes arising from experience adjustment and changes in actuarial assumptions are recognised in other comprehensive income and are not reclassified to statement of profit and loss in subsequent periods. Gains or losses on the curtailment or settlement of defined benefit plan are recognised when the curtailment or settlement occurs.

iii) Other long-term benefits

The Company has other long-term benefits in the form of leave benefits and long-term bonus. The present value of the obligation is determined based on actuarial valuation using the projected unit credit method carried out by independent actuary. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. Actuarial gains or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions are recognised immediately in the statement of profit and loss as income or expense. Gains or losses on the curtailment or settlement of other long-term benefits are recognised when the curtailment or settlement occurs.

2.18. Equity settled share-based payments

Equity-settled share based payments to employees are measured at the fair value (i.e. excess of fair value over the exercise price of the option) of the Employee Stock Options Plan at the grant date. The fair value of option at the grant date is calculated by Black-Scholes-Merton option pricing model. In case the options are granted to employees of the Company, the fair value determined at the grant date is expensed on a straight line basis over the vesting period, based on the Company''s estimate of options that will eventually vest, with a corresponding increase in equity. In case of the options granted to employees of Company’s subsidiaries, the fair value of options granted to employees of the subsidiary companies are considered as capital contribution / investment.

The dilutive effect of outstanding options is reflected in determining the diluted earnings per share.

The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to the general reserve on account of stock options not exercised by employees/surrendered by the employees.

2.19. Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). Operating Segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the CODM, in deciding how to allocate resources and assessing performance.

2.20. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest expenses calculated as per effective interest method, exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.

2.21. Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with its conditions.

Government grants relating to income are recognised in the statement of profit and loss over the period necessary to match them with the costs that they are intended to compensate. In case of Exports Promotion Capital Goods (EPCG) scheme, government grants is recognised in the statement of profit and loss over the period of fulfilment of export obligation.

Government grants relating to the assets are credited in the statement of profit and loss over the expected useful life of the assets.

When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or assistance is initially recognised and measured at fair value and the government grant is measured as the difference between the fair value of the loan and the proceeds received.

2.22. Dividend distribution

Final equity dividends on shares are recorded as a liability on the date of approval by the shareholders and interim equity dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.

2.23. Earnings per equity share

The Basic earnings per equity share is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders of the Company by weighted average number of equity shares outstanding during the year.

Diluted earnings per equity share are computed by dividing the net profit / (loss) attributable to 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. Dilutive potential equity shares are deemed converted as of the beginning of the period unless issued at a later date.

The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, share split, etc.

2.24. Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short term deposits, which are subject to an insignificant risk of changes in value.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and short term deposits, net of outstanding bank overdrafts, if any, as they are considered an integral part of the Company’s cash management.

2.25. Cash flow statement

Cash Flows are reported using Indirect Method, whereby profit / (loss) for the year 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 items 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.

2.26. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value except for trade receivables that are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss.

Effective interest method:

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

Financial assets:

Cash and bank balances

Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all short term highly liquid investments / mutual funds (with zero exit load at the time of investment) that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. Other bank balances includes balances and deposits with bank that are restricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets measured at fair value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

In respect of equity investments (other than joint ventures) which are not held for trading, the Company has made an irrevocable election to present subsequent changes in the fair value of such equity instruments in ‘other comprehensive income’. Such an election is made by the Company on an instrument by instrument basis at the time of initial recognition of such equity investments. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss.

However, cumulative gain or loss may be transferred within equity.

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through the statement of profit and loss.

Investment in Subsidiaries and Associates

The Company has accounted for its investments in Subsidiaries and Associates at cost less accumulated impairment losses, if any in its separate financial statements. Where an indication of impairment exists, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the statement of profit and loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of profit and loss.

Impairment of financial assets [other than investment in subsidiaries and associates]

The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in statement of profit and loss. De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity instruments Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant. Interest bearing bank loans and overdrafts are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.

Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement

The Company uses derivative financial instruments such as forward currency contracts, interest rate swaps to hedge its foreign currency risks, interest rate risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the Statement of Profit and Loss.

Cash flow hedge

The company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the Statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the net profit in the Statement of Profit and Loss upon the occurrence of the related forecasted transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified to net profit in the Statement of Profit and Loss.

2.27. Recent Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards of amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 st March, 2024, MCA has not modified any new standards or amendments to the existing standards applicable to the Company.

B Other liabilities which are remote in nature

(i) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as debts. The matters are frivolous and are disputed under various forums. However, in the opinion of the management, these claims are not tenable.

(ii) The Company is involved in certain intellectual property claims / legal proceedings filed against it by the innovators which are considered to be normal to its business. These proceedings are pending before different authorities / courts . The outcome from these claims are uncertain due to a number of factors involved in legal trial. Often, these issues are subject to uncertainties and therefore the probability of a loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Although there can be no assurance regarding the outcome of any of the intellectual property claims / legal proceedings referred to in this note, the Company does not expect such liabilities to be significant.

(iii) The Company has filed rectification letters in respect of certain income-tax refunds which have been with held by the department. The Company is of the view that once the rectification letters are processed by the department, the refunds will be received by the Company.

In respect of matters stated in B (i) to (ii), the possibility of any liability devolving on the Company is remote and hence, no disclosure as contingent liability is considered necessary.

38 On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd. (“Niche”) contending that they had acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited.

In this regard, the statutory auditors of Niche have continued to give qualified audit opinion on the financial statements of Niche for the year ended 31st March, 2024. They have stated that, "previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, however, following the hearing in October 2021 and their review of the available documentation, their opinion is that it is more likely than not that Niche will be liable for the fine of Euro 13.96 million (equivalent to '' 12,562.25 lakhs) and hence, they believe that this should be provided for in the financial statement of Niche. As per the Board of Directors of Niche, there remains an inherent uncertainty as to the outcome of the appeal and therefore, the Directors are of the opinion that no provision should be made at this point of time”. The management had obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues.

Considering the above uncertainty in regard to ongoing litigation related to EU matter, during the year ended 31st March, 2024, the management of the Company on the basis of abundant precaution had made full provision of '' 12,562.25 lakhs (PY Nil) towards EU fine which is disclosed under exceptional item.

The Company’s balance financial exposure (net of impairment of investment and provision for EU Fine) is '' 6,563.32 lakhs (PY '' 5,927.77 lakhs) which comprises of outstanding trade receivable and corporate guarantee given by the Company to bank on behalf of the subsidiary. Considering the above and turnaround in the performance of Niche and the future business outlook, the management is of the view that no provision is required against the above exposure.

39 (a) Estimated amount of Contracts remaining to be executed (net of advances) on Capital account of '' 4,628.06 lakhs (P.Y.

'' 7,066.15 lakhs) and on other purchase orders of '' 16,769.32 lakhs (P.Y. '' 21,222.67 lakhs) are not provided for.

(b) The Company has imported goods under the advance authorisation scheme / export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate and has availed packing credit against the export orders. These benefits are subject to future exports. Such pending export obligations at year end aggregate to '' 26,689.50 lakhs (P.Y. '' 33,091.46 lakhs).

(c) The Company''s intention is to continue to provide financial support to its subsidiaries [Niche Generics Ltd, Unichem Laboratories Ltd (Ireland) and Unichem Farmaceutica Do Brasil Ltda]. Further, pending outcome of the appeal in respect of European Commission matter (refer note 38), the Company will consider all available options to assist the subsidiary.

40 Credit facilities and term loan facility from Kotak Mahindra Bank availed by the Company and / or its subsidiary, Niche Generics Limited (United Kingdom), are secured by first and exclusive hypothecation charge on movable property, plant and equipment at Goa as well as by way of mortgage charge on immovable property being Industrial land and building at Goa. During the financial year ended 31st March 2024, the mortgage charge on immovable property situated at plot bearing CTS No. 510 of Village Oshiwara and CTS No.1 of Village Majas, Prabhat Estate, Off. S. V Road, Patel Engineering Road, Jogeshwari (West), Mumbai 400 102 has been released.

Further, credit facilities from Citibank NA. availed by the Company, are secured by way of first and exclusive charge on pledge against investments in mutual funds to the extent of '' 133.86 Lakhs (P.Y. '' 124.79 Lakhs).

Further, credit facilities availed by the Company from Bank of India, Axis Bank and HDFC Bank are secured against hypothecation of stock and debtors.

Additionally, all credit facilities have been registered with Registrar of Companies (ROC) within the prescribed due date.

41 As per Ind AS 108 ''Operating Segment'', segment information has been provided under the Notes to Consolidated Financial Statements.

42 42.1 In respect of its investment in wholly owned subsidiary "Unichem Farmaceutica Do Brasil Ltda", Brazil, full impairment

loss was recognised in earlier years against total investment amount of '' 7,086.72 lakhs (P.Y. '' 7,086.72 lakhs). Impairment loss has been continued after an internal assessment based on circumstances prevailing as at the balance sheet date such as past performance, results, assets, expected cash flows, projections, status of product approvals and nature of the market and regulatory conditions.

42.2 During the year ended 31st March, 2023, the Company on the basis of abundant precaution has made full provision towards impairment of long-term investment in its wholly owned subsidiary "Unichem Laboratories Ltd, Ireland" amounting to '' 2,104.84 lakhs which was grouped under exceptional item in Statement of Profit and Loss. The management had made this provision after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results, accumulated losses,negative networth and expected cash flows.

45 HEDGE ACCOUNTING

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: actuarial risk, investment risk, liquidity risk, market risk and legislative risk.

Actuarial Risk:

It is the risk that arises if benefits cost more than expected due to various reasons such as adverse salary growth experience, variability in mortality rates and withdrawal rates.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Liquidity risk:

A strain on the cash flows might occur on resignation / retirement of employees with high salaries and long duration or at a higher level hierarchy who accumulate significant benefits.

Market risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets.This risk might be significant in case of discount rate assumptions as this assumption may vary depending on the yields on the corporate / government bonds and hence, the valuation of liability might be exposed to fluctuations in the yields as at the valuation date.

Legislative risk:

Risk that arises due to change in legislation / regulation that can result in the risk of increase in the plan liabilities or reduction in the plan assets which will directly have an affect on the defined benefit obligation.

Expected contribution and weighted average duration for defined benefit obligation:

Equity investments :

a) Equity investments traded in an active market determined by reference to their quoted market prices.

b) Investments which are designated through other comprehensive income are fair valued and the changes in fair value is recognised in other comprehensive income. There are no gains / losses from such investments.

Derivative instruments:

For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

55 FINANCIAL RISK MANAGEMENT

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

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

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

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short-term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD & EURO. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto a maximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

The following table sets forth information relating to foreign currency exposure from USD, EURO and other currencies (which are not material) form non-derivative financial instruments:

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 and where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk: The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and there are no financial instruments with floating interest rates.

Credit risk: Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled revenues. The Company does not have significant concentration of credit risk related to trade receivables. In the current year, there is no single external party customer which contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March, 2024. In previous year, there was no single external party customer which contributed to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March, 2023.

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter parties and does not have any significant concentration of exposures to specific industry sectors.

None of the financial instruments of the Company result in material concentration of credit risk. Geographic concentration of credit risk relating to trade receivable (other than subsidiaries) is predominantly there in USA i.e. above 10% and less than 10% in other countries. Refer note 12 for movement in expected credit loss allowance.

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

Capital Management:

Equity share capital and other equity (other than ESOP Reserve and Other Comprehensive Income) are considered for the purpose of Company’s capital management (refer Statement of Changes in Equity of standalone financial statement). There are no externally imposed capital requirements on the Company. The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is predominantly equity financed. Further, the Company’s current assets has always been higher than the liabilities. Also, current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short-term mutual funds being far in excess of borrowings / debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2024 and 31st March, 2023.

57 As on 31st March, 2024, the Company has not been declared wilful defaulter by any bank / financial institution or other lender.

58 The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence, no disclosure is required.

59 The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017.

60 The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of Ultimate Beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities (“Funding Parties”) with the understanding that such entity shall whether, 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 guarantee, security or the like on behalf of the Ultimate Beneficiaries.

61 No proceedings have been initiated or are pending against the Company as on 31st March, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

62 The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 and hence, no disclosure is required.

63 The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

64 There is no transaction that 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.

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

For N. A. Shah Associates LLP

Chartered Accountants

Firm''s Registration No.: 116560W/W100149 ^Dr. ^{Prakash A}. ^Mody

Non-Independent Chairman (DIN: 00001285)

Pranay Godha

^{Bhavin Kapadia} Non-Executive, Non-Independent Director (DIN: 00016525)

^Partner Pabitrakumar Bhattacharyya

^Memb^ership ^N°.^: 11⁸"1 Managing Director (DIN: 07131152)

Sandip Ghume

Deputy Chief Financial Officer

Place: Mumbai Pradeep Bhandari

Date: 22nd May, 2024 Head - Legal & Company Secretary

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Mar 31, 2023

1. During the year ended 31st March, 2023, the Company has sold specified number of shares held in Optimus Drugs Private Limited (''Investee'' or ‘Optimus’) to Sekhmet Pharmaventures Private Limited (‘Purchaser’) in terms of Share Purchase Agreement (‘SPA’) dated 10th May, 2022. Further, the number of shares sold included additional equity shares issued to Company pursuant to conversion of bonus Compulsory Convertible Preference Shares which were allotted to the Company during the year and net gain / (loss) on disposal of investments is Rs. 1,084.58 lakhs (P.Y. Nil) out of which Rs. (502.24) lakhs (P.Y. Nil) is grouped under exceptional item (refer note 35.2) and balance amount of Rs. 1,586.82 lakhs (P.Y. Nil) is grouped under other comprehensive income (refer note 36.1).

2. The balance number of unsold equity shares with carrying value of Rs. 28.77 lakhs (P.Y. Nil) as at the balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year. Considering audited accounts of Optimus are not received, fair value could not be determined as at balance sheet date and impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.

Rights, preferences and restrictions attached to Equity Shares

The Company has one class of equity shares having a par value of '' 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

18.1 During the year ended 31st March, 2018, the Company had concluded the buyback of 20,600,000 equity shares aggregating 22.65% of the paid-up equity share capital of the Company at a price of '' 430 per equity share. The Company had funded the buyback from its securities premium account, general reserve and retained earnings. Further, capital redemption reserve of '' 412.00 lakhs representing the nominal value of the shares bought back had been created as an appropriation from retained earnings. Transaction costs related to buyback were adjusted against retained earnings (net of tax).

18.2 Subsequent to the year ended 31st March, 2023, outstanding ESOPs have been surrendered by the employees to the Company. Accordingly, balance in ESOP reserve will be transferred to retained earnings on the date of surrender.

18.3 It represents realised gain on disposal of investments in equity shares of Optimus Drugs Private Limited (also refer note 11.1) which were classified under "Fair Value through Other Comprehensive Income".

18.4 During the year, the Company has paid final dividend of '' 4 per equity share declared for the year ended 31st March, 2022 post approval of the shareholders at the AGM held on 9th August, 2022.

19.1 The Company had availed a term loan facility from bank at a floating rate linked to repo rate which is repayable in 20 quarterly installments over the tenure of 5 years commencing from December 2021. Refer note 40 for securities pledged against the loan.

19.2 Subsequent to year ended 31st March, 2023, IPCA Laboratories Limited has entered into a Share Purchase Agreement with the promoter of the Company for acquisition of 33.38% shares of the paid-up capital of the Company. Further, the Company is in the process of obtaining approval from the banks for the proposed change in shareholding of promoters.

27.1 It represents amount of grants (in the nature of export benefits) relating to property, plant and equipment imported under the EPCG scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities. Also refer note 39(b).

27.2 It includes accumulated liability towards provident fund of '' 10.87 lakhs which will be paid off on linking of aadhar number of certain employees with the provident fund portal.

35.2.1 Net loss of '' 502.24 Lakhs (P.Y. Nil) on disposal of investment in Optimus Drugs Private Limited ("Optimus") of 7,29,849 equity shares out of additional equity shares issued to the Company during the year ended 31st March, 2023 by Optimus pursuant to conversion of bonus Compulsory Convertible Preference Shares. The gain / loss is determined after reducing from sale proceeds fair value of bonus equity shares and related transaction cost incurred on such sale. Also refer note 11.1.

* includes '' 85.32 Lakhs (PY '' 89.25 Lakhs) sales tax refund amount kept on hold, amount paid under protest / deposit made pending adjudication under Finance Act, 1994, Central Excise Act, 1944 and respective State VAT Acts.

Future cash outflow, if any, will be based on the outcome of the appeals / writ petition in case of disputed (a) statutory dues (b) claims from regulatory authorities and (c) European Commission matter (as elaborated in note 38 below). The Company does not expect any cash outflow in other matters mentioned above.

B Other liabilities which are remote in nature

(i) Claims made by parties and ex-employees whose services have been terminated in earlier years are not acknowledged as debts. The matters are frivolous and are disputed under various forums. However, in the opinion of the management, these claims are not tenable.

(ii) The Company is involved in certain intellectual property claims / legal proceedings filed against it by the innovators which are considered to be normal to its business. These proceedings are pending before different authorities / courts . The outcome from these claims are uncertain due to a number of factors involved in legal trial. Often, these issues are subject to uncertainties and therefore the probability of a loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Although there can be no assurance regarding the outcome of any of the intellectual property claims / legal proceedings referred to in this note, the Company does not expect such liabilities to be significant.

(iii) The Company has filed rectification letters in respect of certain income tax refunds which have been withheld by the department. The Company is of the view that once the rectification letters are processed by the department, the refunds will be received by the Company.

In respect of matters stated in B (i) to (iii), the possibility of any liability devolving on the Company is remote and hence, no disclosure as contingent liability is considered necessary.

38 On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Limited (“Niche”) contending that they had acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited.

In this regard, the statutory auditor of Niche had given qualified audit opinion on the financial statements of Niche for the year ended 31st March, 2022 and continued the qualification in audit report for the year ended 31 st March, 2023. They have stated that, "previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, however, following the hearing in October 2021 and their review of the available documentation, their opinion is that it is more likely than not that Niche will be liable for the fine of Euro 13.96 million (equivalent to '' 12,523.87 Lakhs (P.Y '' 11,818.62 Lakhs)) and hence, they believe that this should be provided for in the financial statement of Niche. As per the Board of Directors of Niche, there remains an inherent uncertainty as to the outcome of the appeal and therefore, the Directors are of the opinion that no provision should be made at this point of time." The management had obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and the matter is continued to be disclosed under contingent liability.

As at year ended 31st March, 2023, the Company has aggregate financial exposure of '' 12,837.13 Lakhs (P.Y '' 12,267.33 Lakhs) in Niche comprising of investment, trade receivable and corporate guarantee given to bank for loan availed by Niche. Considering the impact of ongoing litigation as elaborated in the above para, loss for the year and accumulated losses in Niche as at balance sheet date, the statutory auditors of the Company are of the view that the Company would need to provide for impairment on the financial exposure of '' 12,837.13 Lakhs (P.Y '' 12,267.33 Lakhs).

Considering the above uncertainty in regard to ongoing litigation related to EU matter and circumstances prevailing as at the balance sheet date, such as past performance, results, accumulated losses, negative networth, expected cash flows, the management of the Company on the basis of abundant precaution, has made full provision towards impairment of long-term investment in Niche amounting to '' 6,909.36 Lakhs (PY '' Nil). Such provision is grouped under exceptional item in Statement of Profit and Loss. Further, the management is of the view that no further provision is required for the balance financial exposure of '' 5,927.77 Lakhs (P.Y '' 12,267.33 Lakhs) in view of the future business outlook, unless the outcome of EU matter is not in favour of the subsidiary.

On the above matter, the auditors of the Company have given qualified opinion in their audit report on standalone financial statement for the year ended 31st March, 2023.

39 (a) Estimated amount of Contracts remaining to be executed (net of advances) on Capital account of '' 7,066.15 Lakhs (PY. ''

13,394.57 Lakhs) and on other purchase orders of '' 21,222.67 Lakhs (P.Y. '' 21,147.99 Lakhs) are not provided for.

(b) The Company has imported goods under the advance authorisation scheme / export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate and has availed packing credit against the export orders. These benefits are subject to future exports. Such pending export obligations at year end aggregate to '' 33,091.46 Lakhs (PY '' 26,416.65 Lakhs).

(c) The Company''s intention is to continue to provide financial support to its subsidiaries [Niche Generics Ltd, Unichem Laboratories Ltd (Ireland) and Unichem Farmaceutica Do Brasil Ltda]. Further, pending outcome of the appeal in respect of European Commission matter (refer note 38), the Company will consider all available options to assist the subsidiary.

40 Credit facilities and term loan facility from Kotak Mahindra Bank availed by the Company and / or its subsidiary, Niche Generics Limited (United Kingdom), are secured by first and exclusive mortgage charge on immovable property being industrial land and building known as Unichem Laboratories Limited on plot bearing CTS No. 510 of Village Oshiwara and CTS No.1 of Village Majas, Prabhat Estate, Off. S. V. Road, Patel Engineering Road, Jogeshwari (West), Mumbai 400 102 and first and exclusive hypothecation charge on movable property, plant and equipment and mortgage charge on immovable properties being Industrial land and building at Goa. During the financial year ended 31st March 2023, the Company has created the mortgage charge on immovable properties at Goa towards credit facilities and term loan facility availed from Kotak Mahindra Bank.

Further, credit facilities from Citibank, N.A. availed by the Company, are secured by way of first and exclusive charge on pledge against investments in mutual funds to the extent of '' 124.79 Lakhs (P.Y. '' 3,762.79 Lakhs). Additionally, credit facilities availed by the Company from Bank of India, Axis Bank and HDFC Bank are secured against hypothecation of stock and debtors.

Additionally, all credit facilities have been registered with Registrar of Companies (ROC) within the prescribed due date.

41 As per Ind AS 108 ''Operating Segment'', segment information has been provided under the Notes to Consolidated Financial Statements.

42 42.1 In respect of its investment in wholly owned subsidiary "Unichem Farmaceutica Do Brasil Ltda", Brazil, full impairment

loss was recognised in earlier years against total investment amount of '' 7,086.72 lakhs (P.Y. '' 7,086.72 lakhs). Impairment loss has been continued after an internal assessment based on circumstances prevailing as at the balance sheet date such as past performance, results, assets, expected cash flows, projections, status of product approvals and nature of the market and regulatory conditions.

42.2 During the year ended 31st March, 2023, the Company on the basis of abundant precaution has made full provision towards impairment of long-term investment in its wholly owned subsidiary "Unichem Laboratories Ltd, Ireland" amounting to '' 2,104.84 lakhs (PY. '' Nil) which is grouped under exceptional item in Statement of Profit and Loss. The management has made this provision after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results, accumulated losses, negative networth and expected cash flows.

Note: Since the Company has spent in excess of the amount which was required to be spent for FY 2022-23, the Company is entitled to carry forward the amount spent of '' 28.00 Lakhs (PY '' 63.22 Lakhs) to subsequent three financial years respectively which can be set off against CSR obligations of these years. However, for accounting purpose, cumulative excess amount spent of '' 419.67 Lakhs (PY '' 391.67 Lakhs) is not considered as prepaid expenses.

45 HEDGE ACCOUNTING

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: actuarial risk, investment risk, liquidity risk, market risk and legislative risk.

Actuarial Risk:

It is the risk that arises if benefits cost more than expected due to various reasons such as adverse salary growth experience, variability in mortalitiy rates and withdrawal rates.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Liquidity risk:

A strain on the cash flows might occur on resignation / retirement of employees with high salaries and long duration or at a higher level hierarchy who accumulate significant benefits.

Market risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets.This risk might be significant in case of discount rate assumptions as this assumption may vary depending on the yields on the corporate / government bonds and hence, the valuation of liability might be exposed to fluctuations in the yields as at the valuation date.

Legislative risk:

Risk that arises due to change in legislation / regulation that can result in the risk of increase in the plan liabilties or reduction in the plan assets which will directly have an affect on the defined benefit obligation.

Asset-liability matching strategies

The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

Notes related to (a) to (e)

1. Number of options pending to be exercised by Mr. Dilip Kunkolienkar as on 31st March, 2023 are 2,46,176 (P.Y. 2,46,176). However, the options were surrendered subsequent to the year ended 31st March, 2023. Also refer note 18.2.

2. Key Managerial Personnel and their Relatives who are under the employment of the Company are entitled to post employment benefits and other long-term employee benefits recognised as per Ind AS 19 ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Further, it also does not include actual payments of gratuity and leave encashment. Also, re-imbursement of expenses to KMP and their relatives are not included above.

3. Related party contracts / arrangements have been entered in ordinary course of business and are approved by the board of directors / shareholders as applicable.

b) The Company has taken flats / office premises, vehicles and other machinery on cancellable operating leases. There are no restrictions imposed by lease arrangements. For such lease arrangement with lease terms of 12 months or less, the Company has applied the ‘short-term lease’ recognition exemptions. There are no sub-leases. The deposit amount are refundable on completion / cancellation of lease term.The aggregate lease rentals charged as lease rent to the statement of profit and loss in current year is '' 132.15 Lakhs (PY. '' 109.30 Lakhs) and is grouped under note 35 (rent and establishment & administrative expenses).

ii ) Fair value hierarchy

The financial instruments are categorized into three levels based on the inputs used to arrive at fair value measurements as described below:

Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities;

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

Level 3 : Valuation techniques for which lowest level input that is significant to the fair value measurement is directly or indirectly unobservable;

The following tables categorise the financial assets and liabilities held at fair value by the valuation methodology applied in determining their fair value.

Determination of fair values:

The following are the basis of assumptions used to estimate the fair value of financial assets and liabilities that are measured at fair value on recurring basis.

Investment in mutual funds & bonds:

The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.

Equity investments :

a) Equity investments traded in an active market determined by reference to their quoted market prices.

b) Investments which are designated through other comprehensive income are fair valued and the changes in fair value is recognised in other comprehensive income. There are no gains / losses from such investments.

Derivative instruments:

For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

55 FINANCIAL RISK MANAGEMENT

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

Market risk:

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

Foreign currency exchange rate risk:

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

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short-term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD & EURO. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto a maximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

The following table sets forth information relating to foreign currency exposure from USD, EURO and other currencies (which are not material) form non-derivative financial instruments:

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 and where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and there are no financial instruments with floating interest rates.

Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled revenues. The Company does not have significant concentration of credit risk related to trade receivables. In the current year, there is no single external party customer which contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March, 2023. In previous year, there was no single external party customer which contributed to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March, 2022.

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter parties and does not have any significant concentration of exposures to specific industry sectors.

None of the financial instruments of the Company result in material concentration of credit risk. Geographic concentration of credit risk relating to trade receivable (other than subsidiaries) is predominantly there in USA i.e. above 10% and less than 10% in other countries. Refer note 12 for movement in expected credit loss allowance.

Liquidity risk:

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

Capital Management:

Equity share capital and other equity (other than ESOP Reserve and Other Comprehensive Income) are considered for the purpose of Company’s capital management (refer Statement of Changes in Equity of standalone financial statement). There are no externally imposed capital requirements on the Company. The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is predominantly equity financed. Further, the Company’s current assets has always been higher than the liabilities. Also, current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short-term mutual funds being far in excess of borrowings / debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2023 and 31st March, 2022.

57 As on 31st March, 2023, the Company has not been declared wilful defaulter by any bank / financial institution or other lender.

58 The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence, no disclosure is required.

59 The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017.

60 The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of Ultimate Beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities (“Funding Parties”) with the understanding that such entity shall whether, 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 guarantee, security or the like on behalf of the Ultimate Beneficiaries.

61 No proceedings have been initiated or are pending against the Company as on 31st March, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

62 The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 and hence, no disclosure is required.

63 The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

64 There is no transaction that 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.

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Mar 31, 2022

Optrix Laboratories Private Limited has merged with Optimus Drugs Private Limited on receiving approval for the Scheme of Amalgamation by Hon''ble National Company Law Tribunal (NCLT) on 22nd September, 2021. Hence, number of equity shares held by the Company in ''Optrix Laboratories Private Limited'' have been merged with equity holding in ''Optimus Drugs Private Limited''.

Subsequent to the financial year ended 31st March, 2022, the Company has entered into binding Share Purchase Agreement (‘SPA’) dated 10th May, 2022 with Sekhmet Pharmaventures Private Limited (‘Purchaser’) and Optimus Drugs Private Limited (‘Optimus’) to sell its entire shareholding in Optimus to the Purchaser (‘Transaction’). As per the SPA, the Company will sell 19.97% equity shares on a fully diluted basis in the first tranche and remaining 0.02% equity shares in the second tranche. For the first tranche, total consideration is '' 27,098.99 lakhs and for the second tranche for a price to be determined as per the said SPA after satisfaction of necessary conditions precedent. Fair value gain of '' 7,646.40 lakhs is recognised in Other Comprehensive Income in the current quarter and year ended 31st March, 2022 based on independent valuation report and carrying value of such investment as at balance sheet date is '' 22,595.23 lakhs. The additional fair value gain will be recognised in the subsequent period as per SPA. The Transaction is expected to complete in the subsequent period after satisfaction of necessary condition precedents as mutually agreed between the parties under the SPA.

Based on above, the carrying value of the investments as at 31st March, 2022 is grouped under current investments which was earlier grouped under non-current investments as on 31st March, 2021.

Rights, preferences and restrictions attached to Equity Shares

The Company has one class of equity shares having a par value of '' 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

During the year ended 31st March, 2018, the Company had concluded the buyback of 20,600,000 equity shares aggregating 22.65% of the paid-up equity share capital of the Company at a price of '' 430 per equity share. The Company had funded the buyback from its securities premium account, general reserve and retained earnings. Further, capital redemption reserve of '' 412.00 lakhs representing the nominal value of the shares bought back had been created as an appropriation from retained earnings. Transaction costs related to buyback were adjusted against retained earnings (net of tax).

In respect of the year ended 31st March, 2022, the Board of Directors at its meeting held on 27th May, 2022 recommended a dividend of '' 4 /- per share to be paid on its fully paid up equity shares having a face value of '' 2/- . This equity dividend is subject to the approval of shareholders at the ensuing Annual General Meeting and has not been included as a liability in these standalone financial statements. The total estimated equity dividend to be paid is '' 2,816.23 lakhs.

During the year, the Company has paid final dividend of '' 4 per equity share declared for the year ended 31st March, 2021 post approval of the shareholders at the AGM held on 31st July, 2021.

(a) March 2022 - Deferred tax assets is recognised on the amount of tax loss, unabsorbed tax depreciation and other temporary differences to the extent of deferred tax liability. Further, deferred tax assets is not recognised on the amount unused tax losses of '' 8,585.25 lakhs (P.Y. Nil)

(b) March 2021 - As at year end, deferred tax liability exceeds the deferred tax assets (including assets in respect of brought forward losses and depreciation) in accordance with the new tax regime. Also MAT credit is not available under the new tax regime. Further, deferred tax liability on fair value gain on equity instruments is net of deferred tax asset on brought forward long term capital loss of '' 734.76 Lakhs

B Other liabilities which are remote in nature

(i) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as debts. The matters are frivolous and are disputed under various forums. However, in the opinion of the management, these claims are not tenable.

(ii) In the earlier period, one party had filed the legal case on the Company for breach of trust and claimed certain compensation / damages. During the current year, this matter is settled in favour of the Company and amount received by the Company on settlement is included in note 29.2.

(iii) The Company is involved in certain intellectual property claims / legal proceedings filed against it by the innovators which are considered to be normal to its business. These proceedings are pending before different authorities / courts . The outcome from these claims are uncertain due to a number of factors involved in legal trial. Often, these issues are subject to uncertainties and therefore the probability of a loss, if any, being sustained and an estimate of the amount of any loss is difficult to ascertain. Although there can be no assurance regarding the outcome of any of the intellectual property claims / legal proceedings referred to in this note, the Company does not expect such liabilities to be significant.

(iv) The Company has filed rectification letters in respect of certain income-tax refunds which have been withheld by the department. The Company is of the view that once the rectification letters are processed by the department, the refunds will be received by the Company.

In respect of matters stated in B (i) to (iv), the possibility of any liability devolving on the Company is remote and hence, no disclosure as contingent liability is considered necessary.

38 On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd (“Niche”) contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits, have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited.

In this regard, the statutory auditors of Niche have given qualified audit opinion on the financial statement of Niche for the year ended 31 st March 2022. They have stated that previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, however following the hearing in October 2021, and their review of the available documentation, their opinion is that it is more likely than not that Niche will be liable for the fine of Euro 13.96 million (equivalent to '' 11,818.62 lakhs) and hence they believe that this should be provided for in the financial statements of Niche. As per the board of Directors of Niche, there remains an inherent uncertainty as to the outcome of the appeal and therefore the Directors are of the opinion that no provision should be made at this point of time. The management has obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and continued to disclose the matter under contingent liability.

As at Balance Sheet date, the Company has aggregate financial exposure of '' 12,267.33 lakhs in Niche comprising of investment, trade receivable and corporate guarantee given to bank for loan availed by Niche. Considering the impact of on-going litigation as elaborated in the above para and accumulated losses in Niche as at Balance Sheet date, the statutory auditor of the Company are of the view that the Company would need to provide for impairment on the exposure involved of '' 12,267.33 lakhs. However, the Company is of the view that such provision for impairment on exposure would be required only in the event of unfavourable outcome of the appeal which itself is uncertain. On the above matter, the auditors of the Company have given qualified opinion in their audit report on standalone financial statement for the year ended 31st March, 2022.

Further, as per the management the future business outlook and projections of the subsidiary are sufficient so as not to warrant any impairment on the investments in subsidiary (Niche) unless the outcome of EU matter is not in favour of the subsidiary.

39 (a) Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital account '' 13,394.57 lakhs (PY

'' 12,361.67 lakhs) and on other revenue accounts '' 21,147.99 lakhs (PY '' 19,064.57 lakhs) are not provided for.

(b) The Company''s intention is to continue to provide financial support to its subsidiaries [Niche Generics Ltd, Unichem Laboratories Ltd (Ireland) and Unichem Farmaceutica Do Brasil Ltda]. Further, pending outcome of the appeal in respect of European Commission matter (refer note 38), the Company will consider all available options to assist the subsidiary.

40 Credit facilities and term loan facility from Kotak Mahindra Bank availed by the Company and / or its subsidiary, Niche Generics Limited (United Kingdom), are secured by first and exclusive mortgage charge on immovable property being industrial land and building known as Unichem Laboratories Limited on plot bearing CTS No. 510 of village Oshiwara and CTS No.1 of village Majas, Prabhat Estate, Off. S. V Road, Patel Engineering Road, Jogeshwari (West), Mumbai 400 102 and first and exclusive hypothecation charge on movable property, plant and equipment and mortgage charge on immovable properties being Industrial land and building at Goa. Subsequent to the financial year ended 31st March, 2022, the Company has created the mortgage charge on immovable properties at Goa towards credit facilities and term loan facility availed from Kotak Bank.

Further credit facilities from Citibank, N.A. availed by the Company, are secured by way of first and exclusive charge on pledge against investments in mutual funds to the extent of '' 3,762.79 lakhs (PY '' 3,636.95 lakhs). Additionally, credit facilities availed by the Company from Bank of India, Axis Bank and HDFC Bank are secured against hypothecation of stock and debtors.

Additionally, all credit facilities have been registered with Registrar of Companies (ROC) within the prescribed due date except minor delay in case of registration of modification of charge on credit facility availed from Bank of India on account of procedural reasons.

41 As per Ind AS 108 - "Operating Segment", segment information has been provided under the Notes to Consolidated Financial Statements.

42 The Company has reviewed its investments in wholly owned subsidiaries. In respect of its investment in Unichem Farmaceutica Do Brasil Ltda, Brazil, full impairment loss was recognised in earlier years against total investment amount of '' 7,086.72 lakhs (P.Y. '' 7,086.72 lakhs). Impairment loss has been continued after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results, assets, expected cash flows, projections, status of product approvals, nature of the market and regulatory conditions.

Note: Since the Company has spent in excess of the amount which was required to be spent for FY 2021-22, the Company is entitled to carry forward the amount spent of '' 63.22 lakhs (P.Y '' 328.45 lakhs) to subsequent three financial years respectively which can be set off against CSR obligations of these years. However, for accounting purpose, cumulative excess amount spent of '' 391.67 lakhs is not considered as prepaid expenses.

45 HEDGE ACCOUNTING

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk. Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk:

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk:

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

1 Number of options pending to be exercised by Mr. Dilip Kunkolienkar as on 31st March, 2022 are 2,46,176 (P.Y. 2,46,176).

2 Key Managerial Personnel and their Relatives who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Further, it also does not include actual payments of gratuity and leave encashment. Also, reimbursement of expenses to KMP and their relatives are not included above.

3 Related party contracts / arrangements have been entered in ordinary course of business and are approved by the board of directors/ shareholders as applicable.

b) The Company has taken flats / office premises, vehicles and other machinery on cancellable operating leases. There are no restrictions imposed by lease arrangements. For such lease arrangement with lease terms of 12 months or less, the Company has applied the ‘short-term lease’ recognition exemptions. There are no sub-leases. The deposit amount are refundable on completion / cancellation of lease term.The aggregate lease rentals charged as lease rent to the statement of profit and loss in current year is '' 109.30 lakhs (P.Y. '' 140.36 lakhs) and is grouped under note 35 (rent and establishment & administrative expenses).

Determination of fair values:

The following are the basis of assumptions used to estimate the fair value of financial assets and liabilities that are measured at fair value on recurring basis.

Investment in mutual funds & bonds:

The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.

Equity investments :

a) Equity investments traded in an active market determined by reference to their quoted market prices.

b) Investments which are designated through other comphrensive income are fair valued and the changes in fair value is recognised in other comprehensive income. There are no gains / losses from such investments.

Derivative instruments: For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

55 FINANCIAL RISK MANAGEMENT

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

Market risk:

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

Foreign currency exchange rate risk:

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

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD & EURO. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto a maximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

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 and where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and there are no financial instruments with floating interest rates.

Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled revenues. The Company does not have significant concentration of credit risk related to trade receivables. In the current year, there is no single external party customer which contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31 st March, 2022. In previous year, there was no single external party customer which contributed to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March, 2021 .(refer note 38)

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

None of the financial instruments of the company result in material concentration of credit risk. Geographic concentration of credit risk relating to trade receivable (other than subsidiaries) is predominantly there in USA i.e. above 10% and less than 10% in other countries. Refer note 12 for movement in expected credit loss allowance.

Liquidity risk:

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

Capital Management

Equity share capital and other equity (other than ESOP Reserve and Other comprehensive income) are considered for the purpose of Company’s capital management (refer Statement of Changes in Equity of standalone financial statement). There are no externally imposed capital requirements on the Company. The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is predominantly equity financed. Further, the company’s current assets has always been higher than the liabilities. Also current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of borrowings / debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2022 and 31st March, 2021.

As on 31st March, 2022, the Company has not been declared wilful defaulter by any bank/ financial institution or other lender.

The Company is not engaged in the business of trading or investing in crypto currency or virtual currency and hence no disclosure is required.

The Company has complied with number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of layers) Rules, 2017.

The Company has not advanced any funds or loaned or invested by the Company to or in any other person(s) or entities, including foreign entities (“Intermediaries”), with the understanding that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.

The Company has not received any funds from any person(s) or entities including foreign entities (“Funding Parties”) with the understanding that such entity shall whether, 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 guarantee, security or the like on behalf of the Ultimate beneficiaries.

No proceedings have been initiated or are pending against the Company as on 31st March, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

The Company does not have any transaction with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 and hence, no disclosure is required.

The Company has not entered into any scheme of arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

There is no transaction that 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.

---

Mar 31, 2019

1. On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd (“Niche”) contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits, has filed an appeal against the decision of General Court before the Court of Justice of the EU and outcome of the appeal is awaited. Considering the above, in view of the management, no provision for the aforesaid fine is considered necessary. Based on above, fine imposed by the EU of Euro 13.96 million (equivalent to Rs,10,890.20 lakhs) is disclosed under contingent liability in current year.

2. (a) Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital account Rs,10,180.71 lakhs (P.Y.

Rs,3,167.75 lakhs) and on other revenue accounts Rs,17,941.32 lakhs (P.Y. Rs,13,104.27 lakhs) are not provided for.

(b) The CompanyRs,s intention is to continue to provide financial support to its subsidiaries [Niche Generics Ltd & Unichem Laboratories Ltd ( Ireland)) and Unichem Farmaceutica Do Brasil Ltda]. Further, pending outcome of the appeal in respect of European Commission matter (refer note 35), the Company will consider all available options to assist the subsidiary.

3. (a) Loan from Biotechnology Industry Research Assistance Council (BIRAC) was fully repaid during the year and was secured against

hypothecation of movable properties including any and all equipment , apparatus machineries , machineries spares , tools and other accessories , goods and / or other moveable property , present and future , situated at Bio -technology R&D Centre , Goa.

(b) Credit facilities from Citibank, N.A. availed by the Company and its subsidiaries [Unichem Laboratories Limited(Ireland), Unichem Pharmaceuticals (USA) Inc. (USA), Niche Generics Limited(United Kingdom)] are secured by way of a pledge against investments in mutual funds to the extent of Rs,32,217.32 lakhs. (P.Y. Rs,33,084.66 lakhs). Out of Rs,32,217.32 lakhs, the Company is in process of completing pledge formalities in respect of mutual funds of Rs,26,949.12 lakhs (P.Y. Rs, Nil).

4. As per Ind AS 108- "Operating Segment", segment information has been provided under the Notes to Consolidated Financial Statements.

5. The Company has reviewed its investments in wholly owned subsidiaries. In respect of its investment in Unichem Farmaceutica Do Brasil Ltda , Brazil , Impairment loss recognized for this investment for the year Rs,302.83 Lakhs ( P.Y. Rs,511.71 Lakhs). This has resulted in the aggregate Impairment loss to Rs,7,086.72 Lakhs ( P.Y Rs,6,783.89 Lakhs) on a total investment of Rs,7,086.72 Lakhs ( P.Y. Rs,6,783.89 Lakhs ). Impairment loss for the current year is charged to statement of profit and loss after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results ,assets, expected cash flows, projections, status of product approvals , nature of the market and regulatory conditions.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The discounting rate is based on material yield on government bonds having currency and terms consistent with the currency and terms of post-employment benefit obligations. The overall expected rate of return on assets is based on the LIC structure of interest rates on gratuity funds.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk. Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk:

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Asset-liability matching strategies

The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

6. RELATED PARTY DISCLOSURES

Disclosure of related parties / related party transactions pursuant to Ind AS 24 "Related Party Disclosure".

(a) List of related parties

(i) Subsidiaries of the Company (Wholly Owned) : (ii) Enterprises under significant influence of

key management personnel as defined in (iii)

(disclosed to the extent of transactions)

Niche Generics Limited. (United Kingdom) Uni - Distributors Pvt. Ltd.

Unichem SA Pty. LTD. (South Africa) Elemage Wellness LLP

Unichem Farmaceutica Do Brasil Ltda (Brazil) Adiwasi Unnati Mandal

Unichem Pharmaceuticals (USA) Inc. (USA) Uni Trust

Unichem Laboratories Ltd (Ireland) Also Refer note (f)

(iii) Key management personnel and their relatives: (iv) Independent Directors:

(disclosed to the extent of transactions)

Dr. Prakash A. Mody Dr. (Mrs.) B. Kinnera Murthy

(Chairman & Managing Director - CMD Promoter) Mr. Anand Y Mahajan

Mrs. Anita Mody (Spouse of CMD) Mr. Prafull Anubhai

Ms. Supriya Mody (Daughter of CMD) Mr. Prafull D Sheth

Ms. Suparna Mody (Daughter of CMD) Mr. Ramdas M Gandhi (upto 09.05.2018)

Mr. Dilip J. Kunkolienkar (Director - Technical)

(w.e.f 01.04.2018)

(v) Post-employment benefit plans: (vi) Key management personnel and their:

relatives as per Companies Act, 2013.

Unichem Laboratories Ltd-Employees Gratuity Fund Mr. Rakesh Parikh -

Unichem Laboratories Ltd-Employees (Chief Finance & Compliance Officer)(upto 31.08.2018)

Superannuation Fund Rakesh Parikh - HUF (upto 31.08.2018)

Mrs. Neema Thakore - (Head - Legal & Company Secretary) Mr. Sandip R.Ghume (Dy. Chief Financial Officer)

(w.e.f 31.10.2018)

Determination of fair values: The following are the basis of assumptions used to estimate the fair value of financial assets and liabilities that are measured at fair value on recurring basis.

Investment in mutual funds : The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.

Equity investments : a) Equity investments traded in an active market determined by reference to their quoted market prices.

b)During the year the Company has made investments in equity shares of unlisted companies aggregating to ''12,000.62 lakhs. The Company has elected to categorize these investment as fair value through other comprehensive income. Based on the overall evaluation carried out by the Company of the investee company and considering no significant variation in their financial performance, cost of these investment is considered as an appropriate estimate of fair value as at Balance Sheet date. During the year there are no gains / losses from such investments.

Derivative instruments : For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

7.FINANCIAL RISK MANAGEMENT

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

Market risk:

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

Foreign currency exchange rate risk:

The Company’s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries and foreign currencytransactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity,where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than thefunctional currency of the Company. Since a major part of the Company’s revenue is in foreign currency and major part of thecosts are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently,the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue andcash-flow in order to improve the predictability of the financial performance.The major foreign currency exposures for theCompany are denominated in USD & EURO. Additionally, there are transactions which are entered into in other currencies and arenot significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto amaximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.The following tablesets forth information relating to foreign currency exposure from USD, EUR and other currencies (which are not material) formnon-derivative financial instruments: _

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 and where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk:

The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and there are no financial instruments with floating interest rates.

Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled revenues. The Company does not have significant concentration of credit risk related to trade receivables. In the current year there is a single third party customer which contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31st March 2019. In previous year, no single third party customer contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries).

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.

None of the financial instruments of the company result in material concentration of credit risk. Geographic concentration of credit risk relating to trade receivable (other than subsidiaries) is predominantly there in USA i.e. above 10% and less than 10% in other countries. Refer note no. 11 for movement in expected credit loss allowance.

Liquidity risk:

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

*Excluding amortized cost adjustment.

Capital Management

Equity share capital and other equity (other than ESOP Reserve and Other comprehensive income) are considered for the purpose of Company’s capital management (refer Statement of Changes in Equity of standalone financial statement). There are no externally imposed capital requirements on the Company. The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.The Company is predominantly equity financed. Further, the company’s current assets has always been higher than the liabilities. Also current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of borrowings / debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2019 and 31st March, 2018.

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Mar 31, 2018

1. Company Overview

Unichem Laboratories Limited (“the Company”) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. Its shares are listed and traded on Bombay Stock Exchange and National Stock Exchange in India. The registered office of the Company is located at “Unichem Bhavan”, Prabhat Estate, off S V Road, Jogeshwari (west), Mumbai 400 102.

The Company is engaged in manufacturing of pharmaceutical products.

The financial statements of the Company for the year ended 31st March 2018 were approved and adopted by board of directors of the Company in their meeting dated 29th May, 2018.

Rights, preferences and restrictions attached to Equity Shares.

The Company has one class of equity shares having a par value of Rs.2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

* Consequent upon buyback during the year, there is reduction in individual shareholding as compared to 31st March 2017. However, on promoter group basis, there is no dilution in shareholding as on 31st March 2018 as compared to 31st March 2017.

As per the records of the Company, including its register of shareholders / members & other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

2.1 During the quarter ended 31st March, 2018, the Company has concluded the buyback of 20,600,000 equity shares aggregating 22.65% of the paid-up equity share capital of the Company at a price of Rs.430 per equity share. The Company has funded the buyback from its securities premium account, general reserve and retained earnings. Further, capital redemption reserve of Rs.412.00 lakhs representing the nominal value of the shares bought back has been created as an appropriation from retained earnings. Transaction costs related to buyback are adjusted against retained earnings(net of tax).

2.2 In respect of the year ended 31 st March,2018, the Board of Directors at its meeting held on 29th May, 2018 recommended a dividend of Rs.5/- per share to be paid on its fully paid up equity shares having a face value of Rs.2/- . This equity dividend is subject to the approval of shareholders at the ensuing Annual General Meeting and has not been included as a liability in these standalone financial statements. The total estimated equity dividend (including tax on dividend ) to be paid is Rs.4239.75 Lakhs.

The Company has taken term loan from BIRAC carrying interest at the rate of 2% per annum, repayment in 10 equal half yearly instalments commencing from 14th Oct, 2016. (Refer note No. 37 (b))

Using prevailing market rates for an equivalent loan of 10 %, the fair value of the loan at initial recognition is estimated at Rs.37.66 Lakhs. The difference of Rs.13.77 Lakhs between gross proceeds and the fair value of the loan is the benefit derived from the below market interest loan and is recognised as deferred revenue (Note - 24). Interest expenses of Rs.4.34 Lakhs was recognised of the year ended 31st March 2018 (PY. Rs.4.19 Lakhs) (Note 31).

* MAT credit for earlier year is recognised to the extent of utilisation in current year.

** Excess provision for income tax (net) of earlier years is on account of reworking the provision for tax in respect of earlier years on the basis of acceptance of the Company’s view in computation of tax liability under u/s 115JB (MAT) of the Income tax Act, 1961 as per assessment order passed by the tax authority.

3.1 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act,2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

4.1 It includes Rs.51.45 lakhs ( P.Y. Nil ) of grants relating to property, plant and equipment imported under the EPCG scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities.

The Company has made provision towards expected returns from market which are primarily in the nature of expired or near expiry products and other claims. Cash outflow is expected within 12 months from balance sheet date. The Company does not expect any reimbursement in regards to the provision made.

* includes Rs.120.58 lakhs (P.Y Rs.109.19 Lakhs ) paid under protest/deposit pending adjudication under Income tax Act, 1961 and Central Excise Act 1944.

(v) Claims made by the ex-employees whose services have been terminated in earlier years are not acknowledged as debts, the exact liability, whereof is not ascertainable. The matters are disputed under various forums. However in the opinion of the management, these claims are not tenable.

5 On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of € 13.97 million (equivalent to Rs.11,267.85 lakhs), jointly and severally on the Company and its subsidiary Niche Generics Ltd (“Niche”) contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when The Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both The Company & Niche have submitted appeal in September 2014 to the EU General Court seeking appropriate relief in the matter. The outcome of the appeal is likely to follow some months after (early 2018 at the earliest), as advised by lawyers of the Niche. The appeal process before EU Courts is very slow and as this is a very complex matter, it is possible that the case may take even longer to be concluded.

6 Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital account Rs.3,167.75 lakhs (P.Y. Rs.5,334.17 lakhs) and on other revenue accounts Rs.13,104.27 lakhs (P.Y. Rs.14,574.59 lakhs) are not provided for.

7 (a) Cash credit Rs. Nil (P. Y. Rs.55.14 Lakhs) in Joint consortium from Bank of India and Bank of Baroda are secured against hypothecation of Stocks and Book debts both present and future situated at various locations of the Company

(b) Loan from Biotechnology Industry Research Assistance Council (BIRAC) is secured against hypothecation of movable properties including any and all equipments, apparatus machineries , machineries spares , tools and other accessories , goods and / or other moveable property, present and future , situated at Bio -technology R&D Centre , Goa.

(c) Credit facilities from Citibank, N.A. availed by the Company and its subsidiaries [Unichem Laboratories Limited(Ireland), Unichem Pharmaceuticals (USA) Inc. (USA), Niche Generics Limited(United Kingdom)] are secured against investments in mutual funds to the extent of Rs.33,084.66 Lakhs.In the previous year credit facilities to subsidiaries were secured by :

(i) first exclusive charge on the movable fixed assets (including plant and machinery, office equipment, furniture & fixtures, etc. and excluding current assets, stores & spares) situated at Pithampur, Madhya Pradesh and Baddi, Himachal Pradesh and

(ii) first exclusive charge on immovable property situated at Pithampur, Madhya Pradesh and Baddi, Himachal Pradesh.

8 As per Ind AS 108- “Operating Segment”, segment information has been provided under the Notes to Consolidated Financial Statements.

9 The Company has reviewed its investments in wholly owned subsidiaries. In respect of its investment in Unichem Farmaceutica Do Brasil Ltda, Brazil, Impairment loss recognised for this investment for the year Rs.511.71 Lakhs (P.Y. Rs.2,690.78 Lakhs). This has resulted in the aggregate Impairment loss to Rs.6,783.89 Lakhs (P.Y. Rs.6,272.19 Lakhs) on a total investment of Rs.6,783.89 Lakhs (P.Y. Rs.6,272.19 Lakhs). Impairment loss for the current year is charged to statement of profit and loss after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results ,assets, expected cash flows, projections, status of product approvals , nature of the market and regulatory conditions.

10 CORPORATE SOCIAL RESPONSIBILITY

a) Gross amount required to be spent by the company during the year: Rs.272.99 Lakhs (PY Rs.279.32 Lakhs)

b) Amount spent during the year on:

11 HEDGE ACCOUNTING

The Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company’s manages currency risk as per trends and experiences. The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to export receivables. The Company does not enter into any derivative instruments fortrading or speculative purposes.

12 EMPLOYEE BENEFITS

The Company has a defined benefit gratuity plan. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Other long term benefits comprises of leave entitlements to the employees. This benefit is partly funded by the Company.

The estimates of future salary increases considered In actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand In the employment market. The discounting rate Is based on material yield on government bonds having currency and terms consistent with the currency and terms of post-employment benefit obligations. The overall expected rate of return on assets is based on the LIC structure of interest rates on gratuity funds.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

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

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk : The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

Expected contribution and weighted average duration for defined benefit obligation

Asset-liability matching strategies

The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

13 RELATED PARTY DISCLOSURES

Disclosure of related parties / related party transactions pursuant to Ind AS 24 “Related Party Disclosure”.

(a) List of related parties

(i) Subsidiaries of the Company (Wholly Owned) :

Niche Generics Limited. (United Kingdom)

Unichem SA Pty. LTD. (South Africa)

Unichem Farmaceutica Do Brasil Ltda (Brazil) Unichem Pharmaceuticals (USA) Inc. (USA)

Unichem Laboratories Ltd (Ireland)

(iii) Key management personnel and their relatives: (disclosed to the extent of transactions)

Dr. Prakash A. Mody

(Chairman & Managing Director - CMD, Promoter) Mrs. Anita Mody (Spouse of CMD)

Ms. Supriya Mody (Daughter of CMD)

Ms. Suparna Mody (Daughter of CMD)

(v) Post-employment benefit plans:

Unichem Laboratories Ltd-Employees Gratuity Fund Unichem Laboratories Ltd-Employees Superannuation Fund

(ii) Enterprises under significant influence of key management personnel as defined in (iii)

(disclosed to the extent of transactions)

Uni - Distributors Pvt. Ltd.

Uni Trust

Adiwasi Unnati Mandal

(iv) Independent Directors:

Dr. (Mrs.) B. Kinnera Murthy Mr. Anand Y. Mahajan Mr. Prafull Anubhai Mr. Prafull D Sheth Mr. Ramdas M Gandhi

(vi) Key management personnel and their: relatives as per Companies Act, 2013.

Mr. Rakesh Parikh - (Chief Finance & Compliance Officer) Rakesh Parikh - HUF

Mrs. Neema Thakore - (Head - Legal & Company Secretary)

1 Number of option pending to be exercised by Mr. Rakesh Parikh as on 31st March,2018 are 27,500 (Previous year 42,600).

2 Key Managerial Personnel and their Relatives who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Further re-imbursement of expenses to KMP and their relatives are not included above

3 Director’s remuneration for the year 2017-2018 is as per limits prescribed under Section 197 read with Schedule V of the Companies Act, 2013.

4 All related party contracts / arrangements have been entered in ordinary course of business and are approved by the board of directors/ shareholders.

f) In view of the Management, equity Investment in Synchron Research Services Pvt Ltd will not result the investee company becoming a related party since there is no control / influence over operations:

14 OPERATING LEASE (LESSEE)

a) The Company has obtained certain equipments under non-cancellable lease agreements for the period of 36 months which are subject to renewal at mutual consent.

The expenses charged to the statement of profit & loss in current year are Rs.9.66 Lakhs (P.Y. Rs.21.17 Lakhs)

b) The Company has taken flats / office premises and vehicles on cancellable operating leases. There are no restrictions imposed by lease arrangements. There are no sub-leases. The deposit amount are refundable on completion / cancellation of lease term. The aggregate lease rentals payable, are charged as lease rent (Refer Note No.32) in the statement of profit and loss.

15 DISCONTINUED OPERATION

a) During the year, based on the approval obtained from the Shareholders, the Company has transferred its business of manufacture, sale, marketing and distribution of domestic formulations in India and Nepal (“Identified Business”) by way of slump sale on going concern basis to Torrent Pharmaceuticals Limited (“Torrent”). Identified Business includes portfolio of several brands in India and Nepal, manufacturing facility at Sikkim and employees performing work in relation to said business.

b) Financial performance and cashflow information

Determination of fair values:

The following are the basis of assumptions used to estimate the fair value of financial assets and liabilities that are measured at fair value on recurring basis:

Investment in mutual funds:

The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.

Equity investments :

Equity investments traded in an active market determined by reference to their quoted market prices. Other equity investments where quoted prices are not available, fair values are determined by reference to the expected discounted cash flows from the underlying net assets or current market value of net assets.

Derivative instruments :

For forward contracts and cross currency interest rate swaps, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of respective counterparties.

16 FINANCIAL RISK MANAGEMENT

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

Market risk:

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

Foreign currency exchange rate risk:

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

Since a major part of the Company’s revenue is in foreign currency and major part of the costs are in Indian Rupees, any movement in currency rates would have impact on the Company’s performance. Consequently, the overall objective of the foreign currency risk management is to minimize the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.

The major foreign currency exposures for the Company are denominated in USD & EURO. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges all trade receivables upto a maximum of 6 months forward based on historical trends. Hedge effectiveness is assessed on a regular basis.

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 and where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments or borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk.

The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate and there are no financial instruments with floating interest rates.

Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to concentrations of credit risk materially consists of trade receivables, investments and derivative financial instruments.

All trade receivables are subject to credit risk exposure. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through established policies, controls relating to credit approvals and procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables (other than from subsidiaries) and unbilled revenues. The Company does not have significant concentration of credit risk related to trade receivables. No single third party customer contributes to more than 10% of outstanding accounts receivable (excluding outstanding from subsidiaries) as of 31 st March 2018 and 31 st March 2017.

The Company limits its exposure to credit risk by generally investing in liquid securities having and only with counterparties that have a good credit rating. The company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors.Refer note no. 11 for movement in expected credit loss allowance.

Liquidity risk:

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

Capital Management

Equity share capital and other equity (other than ESOP Reserve and Other comprehensive income) are considered for the purpose of Company’s capital management. There are no externally imposed capital requirements on the Company. The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company’s objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

The Company is predominantly equity financed. Further, the company’s current assets has always been higher than the liabilities. Also current assets includes cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of borrowings/ debt.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 st March, 2018 and 31st March, 2017.

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Mar 31, 2017

* Transfer includes depreciation related to new projects under capitalization allocated to Capital Work in-Progress.

** Buildings include three Flats and a Garage amounting to Rs.147.19 lacs (Previous year Rs.147.19 lacs ) where the co-operative society is yet to be formed.

During the year ended 31st March 2017, Rs.497 lacs (31st March 2016 Rs.426 lacs) was recognized as an expenses for inventories carried at net realizable value.

Trade Receivables are secured to the extent of Advances of Rs.2014.59 lacs (Previous Year Rs.1930.77 lacs) received from Consignment Agents.& Others.

Rights, preferences and restrictions attached to Equity Shares.

The Company has one class of equity shares having a par value of Rs.2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

As per the records of the company, including its register of shareholders / members & other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(For Shares reserved for issue under ESOS, refer note 51)

In respect of the year ended March 31, 2017, the Board of Directors at its meeting held on May 30, 2017 recommended a dividend of Rs.3/- per share to be paid on its fully paid up equity shares having a face value of Rs.2/- . This equity dividend is subject to the approval of shareholders at the ensuing Annual General Meeting and has not been included as a liability in these standalone financial statements. The total estimated equity dividend (including tax on dividend ) to be paid is Rs.3,281.30 lacs.

The Company has taken term loan from BIRAC carrying interest at the rate of 2% per annum, repayment in 10 equal half yearly installments commencing from one year from the date of completion (14th oct, 2016). (Refer note No. 39 (b))

Using prevailing market rates for an equivalent loan of 10 %, the fair value of the loan at initial recognition is estimated at Rs.37.66 lacs. The difference of Rs.13.77 lacs between gross proceeds and the fair value of the loan is the benefit derived from the below market interest loan and is recognized as deferred revenue ( Note - 25). Interest expenses of Rs.1.55 lacs was recognized of the year ended 31st March 2016 and Rs. 4.19 lacs was recognized in 2016-17(Note 32).

The deferred revenue arise as a result of the benefit received from an below market interest government loan received on 1st Jan, 2015 and 5th March, 2016. The revenue was offset against finance cost incurred in FY 2015-16 and FY 2016-17.

* includes Rs.109.19 lacs (Previous Years ending - 31.03.2016 Rs.116.69 lacs and 31.03.2015 Rs.91.97 lacs) paid under protest/deposit pending adjudication under Income tax Act ,1961 and Central Excise Act, 1944.

(iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.

1. On 9th July, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche have submitted appeal in September 2014 to the EU General Court seeking appropriate relief in the matter.

2. Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital & other account not provided for Rs.19,908.77 lacs (Previous year ending as on 31.03.2016 is Rs.18,253.29 lacs and ending as on 31.03.2015 Rs.13,747.56 lacs).

3 (a) Cash credit, Rs.55.14 lacs ( Previous Year Rs.790.15 lacs) in Joint consortium from Bank of India and Bank of

Baroda are secured against hypothecation of Stocks and Book debts both present and future situated at various locations of the Company

(b) Loan from Biotechnology Industry Research Assistance Council (BIRAC) is secured against hypothecation of movable properties including any and all equipments, apparatus machineries, machineries spares, tools and other accessories, goods and / or other moveable propertiey, present and & future, situated at Bio -technology R&D Centre, Goa.

(c) Credit facilities to overseas subsidiaries is agreed to be secured in favour of Citibank NA by:

(i) first exclusive charge on the movable fixed assets (including plant and machinery, office equipment, furniture & fixtures, etc. and excluding current assets, stores & spares) situated at Pithampur, Madhya Pradesh and Baddi, Himachal Pradesh and

(ii) first exclusive charge on immovable property situated at Pithampur, Madhya Pradesh and Baddi, Himachal Pradesh The process of creating the said charges are under process.

4 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. The Company has reviewed its investments in wholly owned subsidiaries. In respect of its investment in Unichem Pharmaceutical Do Brazil Ltd , Brazil , Impairment loss recognized for this investment for the year Rs.2,690.78 lacs compared to Rs.2,277.63 lacs made for the previous year ending as on 31.03.2016 and Rs.434.55 lacs as on 31.03.2015. This has resulted in the aggregate Impairment loss to Rs.6,272.19 lacs (previous year ending as on 31.03.2016 Rs.3,581.41 lacs and as on 31.03.2015 Rs.1,303.77 lacs) on a total investment of Rs.6,272.19 lacs (previous year ending as on 31.03.2016 Rs.5,695.88 lacs and as on 31.03.2015 Rs.5,116.27 lacs). Impairment loss for the current year charged to profit and loss after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results, assets, expected cash flows, projections, status of product approvals, nature of the market and regulatory conditions.

6. Exceptional Items

Enactment of the payment of Bonus ( Amendment ) Act , 2015 having come into force effective 1st day of April 2014, the Company has made additional provision for Bonus pertaining for the period from 1st April 2014 to 31st March 2015 and has disclosed the same as an Exceptional item of Rs. 353 lacs before tax and accordingly the Profit and EPS after tax but before exceptional items would be as follows.

7. The company uses forward contracts to hedge its risk associated with foreign currency fluctuations relating to firm commitments and forecasted transactions. The company does not enter into forward exchange contracts which are intended for speculative purpose.

The following are the outstanding forward contracts :

8. Employee Benefits

Defined benefit plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The service cost and the net interest cost would be charged to the Profit & Loss account. Actuarial gains and losses arise due to difference in the actual experience and the assumed parameters and also due to changes in the assumptions used for valuation. The Company recognizes these remeasurements in the Other Comprehensive Income (OCI).

The Company has a defined benefit obligation for Leave encashment which is partly funded. Generally the leave encashment is paid to employees in case of resignation, retirement under VRS or retirement except in some case the same is paid annually .

* As per actuary certificate

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The discounting rate is based on material yield on government bonds having currency and terms consistent with the currency and terms of post-employment benefit obligations. The overall expected rate of return on assets is based on the LIC structure of interest rates on gratuity funds.

The following tables summaries the funded status and amounts recognized in the balance sheet for gratuity & leave encashment benefits.

3 In view of the Management , equity Investment in Synchron Research services Pvt Ltd will not result the investee company becoming a related party since there is no control over operations.

b) The total of future minimum sublease payment expected to be received under non - cancellable subleases at the end of reporting period is NIL

c) Lease payment s recognized as an expense in the period

d) A general description of lessee’s significant leasing arrangements including terms of use is as per the terms of arrangement is entered by the company

ii) The estimated fair value of each stock option granted in all the ESOS was calculated by Black & Scholes option pricing model. The following assumptions were used for calculation of fair value of grants :

Note:

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.

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Mar 31, 2016

1. On 9th July, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche have submitted appeal in September 2014 to the EU General Court seeking appropriate relief in the matter.

2. Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital & other account not provided for Rs. 18,253.29 lacs (Previous year Rs. 13,747.56 lacs).

3. (a) Cash credit, Rs. 790.15 lacs (Previous Year Rs. NIL) from Bank of India and Bank of Baroda are secured against hypothecation of Inventories, Book debts and an equitable mortgage of immovable properties located at Jogeshwari, Roha, Ghaziabad on a second, subject and subservient pari passu charge basis (First charge holder being fully satisfied and paid.)

In addition the cash credit facilities are also secured by an equitable mortgage of the Company''s immovable properties situated at Goa and Baddi on a second, subject and subservient basis. (First charge holder being fully satisfied and paid)

(b) Loan from Biotechnology Industry Research Assistance Council is secured against hypothecation of movable properties including any and all equipment , apparatus machineries , machineries spares, tools and other accessories , goods and / or other moveable property, present & future, situated at Biotechnology R&D Centre, Goa.

4. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. The company has reviewed the investments in wholly owned subsidiaries. In respect of its investment in Unichem Farmaceutica Do Brazil Ltda, Brazil, the provision for diminution of this investment forthe year has been increased to Rs. 2,277.63 compared to Rs. 434.55 lacs made for the previous year. This has resulted in the aggregate provision for diminution to Rs. 3,581.41 lacs (previous year: 1,303.77lacs)onatotalinvestmentof Rs.5,695.88lacs (previous year Rs. 5,116.27 lacs). This provision for diminution for the current year is increased after an internal assessment based on circumstances prevailing as at the balance sheet date, such as past performance, results, assets, expected cashflows, projections, status of product approvals, nature of the market and regulatory conditions. The said increase in diminution and the total diminution is considered adequate as at the balance sheet date.

6. Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company has a defined benefit obligation for Leave encashment which is partly funded . Generally the leave encashment is paid to employees in case of resignation , retirement under VRS or retirement except in some case the same is paid annually.

The following tables summarise the funded status and amounts recognised in the balance sheet for gratuity & leave encashment benefits.

7. Operating lease:

Premises and certain vehicles are obtained on operating lease and are renewable and non-cancellable. There are no restrictions imposed by lease arrangements. The lease term is based on individual agreements. There are no sub-leases.

The aggregate lease rentals payable, are charged as rent ( Refer Note no. 27 & 28 ) in the Statement of Profit & Loss.

8. Information pursuant to the provisions of Schedule III to the Companies Act, 2013 as certified by management.

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Mar 31, 2015

Rights, preferences and restrictions attached to Equity Shares.

The Company has one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

As per the records of the Company, including its register of shareholders / members & other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

( For Shares reserved for issue under ESOS, refer note 43)

2 Contingent Liabilities : (Rs. in lacs) 2014-15 2013-14

(i) Claims not acknowledged as debts* 1,832.22 1,568.58

(ii) In respect of the Guarantees given to Bank on behalf of :

-Subsidiaries 2,352.75 2,509.50

(iii) Other money for which the company is Contingently liable 224.84 374.44

Total 4,409.81 4,452.52

* includes Rs. 91.97 lacs (Previous Year Rs. 179.32 lacs) paid under protest/deposit pending adjudication under Income tax Act, 1961 and Central Excise Act 1944.

(iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.

3 On 9th July, 2014, the European Commission decided to impose an unjustified fine of € 13.97 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd contending that they had acted in breach of EU competition law as Niche Generics Ltd had, in early 2005 (when the Company was only a part owner and financial investor in Niche) had agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company & Niche have submitted appeal in September 2014 to the EU General Court seeking appropriate relief in the matter.

4 Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital & other account not provided forRs.13,747.56 lacs (Previous year Rs.11,735.38 lacs).

5 (a) Cash credit, Rs. NIL lacs (Previous Year Rs. 62.58 lacs) from Bank of India and Bank of Baroda are secured against hypothecation of Inventories, Book debts and an equitable mortgage of immovable properties located at Jogeshwari, Roha, Ghaziabad on a second, subject and subservient pari passu charge basis ( First charge holder being fully satisfied and paid.) In addition the cash credit facilities are also secured by an equitable mortgage of the Company''s immovable properties situated at Goa and Baddi on a second , subject and subservient basis. (First charge holder being fully satisfied and paid) (b)Loan from Biotechnology Industry Research Assistance Council is secured against hypothecation of movable properties including any and all equipment, apparatus machineries, machineries spares, tools and other accessories, goods and / or other moveable property , present & future, situated at Bio technology R&D Centre, Goa.

6 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7 On internal assessment of long term strategic investments made by the company in its wholly owned subsidiaries, considering their performance, future expectations, cash flow generated and % the synergies in the operations from the said subsidiaries over the period of investments, the management has determined an amount of Rs. 434.55 lacs as diminution for the year (previous Year Rs 176.20 lacs) taking the accumulated provision to Rs. 1,303.77 lacs ( previous year : Rs. 869.22 lacs) on total investment made of Rs. 11,327.58 lacs (Investments before diminution & excluding preference shares held in subsidiaries ) and same is considered adequate by the management as at the balance sheet date.

8 Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The Company has a defined benefit obligation for Leave encashment which is partly funded. Generally the leave encashment is paid to employees in case of resignation, retirement under VRS or retirement except in some case the same is paid annually.

* As per Actuary Certificate

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market. The discounting rate is based on material yield on government bonds having currency and terms consistent with the currency and terms of post-employment benefit obligations. The overall expected rate of return on assets is based on the LIC structure of interest rates on gratuity funds.

9 Operating lease:

Premises and certain vehicles are obtained on operating lease and are renewable and non-cancellable. There are no restrictions imposed by lease arrangements. The lease term is based on individual agreements. There are no sub-leases. The aggregate lease rentals payable, are charged as rent ( Refer Note no. 27 & 28 ) in the Statement of Profit & Loss.

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Mar 31, 2013

1. Scheme of Amalgamation

The Hon''ble High Court of Mumbai, on July 12, 2012 sanctioned the scheme of amalgamation under Section 391 to 394 of the Companies Act,1956 of five Investment Companies (the primary assets of which comprise of equity shares in the Company) namely AVM Capital Services Private Limited (ACSPL), Chevy Capital Services Private Limited (CCSPL) , PM Capital Services Private Limited (PCSPL), Pranit Trading Private Limited (PTPL), Viramrut Trading Private Limited (VTPL), (collectively herein after referred to as ''Transferor Companies'') with the Company. The Scheme was earlier approved by the shareholders in the court-convened meeting held on November 3, 2011. The Company filed the Court Order with the Registrar of Companies on 6th August, 2012 to make the scheme effective in terms of said order dated 12th July 2012. ULL has given effect for the said Scheme in its books of accounts with effect from the appointed date i.e. 1st April 2011. In accordance with the Scheme, the Company has accounted for the Amalgamation based on the "Pooling of Interest" method as under:

(i) all assets and liabilities appearing in the books of accounts of Transferor Companies have been transferred to & vested in and have been recorded by the Company at their respective book values

(ii) the investments in equity share capital of the Company as it appeared in the books of account of the Transferor Companies is cancelled

(iii) the excess of net assets value of the Transferor Companies as reduced by the face value of shares issued by the Company, adjusted for cancellation of equity share capital as mentioned above and net of all expenses in relation to the Scheme, amounting to Rs. 1.62 lacs has been credited to Surplus in the Profit and Loss Account

(iv) all inter-company transactions have been eliminated on incorporation of the accounts of Transferor Companies in the books of Company

(v) in consideration of the above, the Company issued and allotted equity shares, credited as fully paid up, to the extent indicated below, to all the members of the Transferor Companies in the following proportion:

(a) 46,72,552 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares of Rs. 100 each held in ACSPL

(b) 78,43,811 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares of Rs. 100 each held in CCSPL

(c) 46,70,186 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares of Rs. 100 each held in PCSPL

(d) 1,09,36,087 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares of Rs. 100 each held in PTPL

(e) 17,13,547 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares of Rs. 100 each held in VTPL

Accordingly, 2,82,93,991 fully paid up equity shares of Rs. 2 each of the Company were issued to the shareholders of the Transferor Companies, which is equivalent to the shares cancelled, vide (ii) above; these shares, aggregating to Rs. 565.88 lacs, pending allotment were shown as "Share Capital pending allotment" under Share Capital, thus resulting in no change in the total issued & paid up Share Capital of the Company. The new equity shares issued as above rank pari-passu with the existing equity shares of the Company. As per the scheme of amalgamation, the said shares were issued & allotted to the shareholders of the transferor companies as per register of members of the transferor companies as on the effective date i.e. 6 th August, 2012.

2 During the previous year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also re-classified the previous year figures in accordance with the figures of the current year.

3 Contingent Liabilities :

(Rs. in lacs)

2012-13 2011-12

(i) Claims not acknowledged as debts*. 1,790.99 1,416.00

(ii) In respect of the Guarantees given to Bank on behalf of :

- Subsidiaries 2,102.10 2,397.15

(iii) Other money for which the company is Contingently liable 495.91 518.93

Total 4,389.00 4,332.08

* includes Rs. 96.44 lacs (Previous Year Rs. 88.20 lacs) paid under protest/deposit pending adjudication under Income tax Act,1961 and Central Excise Act 1944.

(iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.

4 Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital & other account not provided for Rs. 9,124.58 lacs (Previous year Rs. 11,647.05 lacs).

5 Cash credit, Rs. 572.05 lacs (Previous Year Rs. 949.14 lacs) from Bank of India and Bank of Baroda are secured against hypothecation of Inventories, Book debts and mortgage of immovable properties located at Jogeshwari, Roha, Ghaziabad on first pari passu charge & on immovable properties at Goa and Baddi Unit I on a second and subservient charge.

Short Term unsecured borrowings Rs. Nil (Previous Year Rs. 1,538.15 lacs) represent Packing / Buyers credit in Foreign currency availed from various banks against export receivables. Maximum tenor of such borrowings is 6 months from the date of availment.

6 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7 On internal assessment of long term investments made by the Company in its subsidiaries during the year, the management has determined an amount of Rs. 159.81 lacs (previous year Rs. 142.55 lacs) for diminution, which has been provided in the accounts.

8 Shareholders of the Company approved the sale of company''s unit at SEZ, Indore, Madhya Pradesh through a postal ballot. The results of the said ballot were announced on 29.03.2013. Majority of fixed assets in this unit are included under the head " Capital work in progress" (Refer Note no. 13)

The sale will be completed after receipt of certain necessary approvals.

9 The Company uses forward contracts to hedge its risk associated with foreign currency fluctuations relating to firm commitments and forecasted transactions. The Company does not enter into forward exchange contracts which are intended for speculative purpose.

10 Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company has a defined benefit obligation for Leave encashment which is partly funded. Generally the leave encashment is paid to employees in case of resignation, retirement under VRS or retirement except in some case the same is paid annually.

The following tables summarise the funded status and amounts recognised in the balance sheet for gratuity & leave encashment benefits.

11 Operating lease:

Premises and certain vehicles are obtained on operating lease and are renewable/cancellable at mutual consent. There are no restrictions imposed by lease arrangements. The lease term is based on individual agreements. There are no sub-leases. The aggregate lease rentals payable, are charged as rent (Refer Note no. 28 ) in the Statement of Profit & Loss.

12 The amount of Dividends proposed to be distributed to Equity shareholders for the FY. 2012-2013 includes dividend on shares allotted to employees as per ESOP Scheme of the company, after the Balance sheet but before record date, on which dividend is declared in Board Meeting. The total 13,750 nos. of shares are allotted after balance sheet date on which dividend of Rs. 4.50/- per share is declared and will be paid after approval of same in ensuing Annual General Meeting. Accordingly provision has been made for dividend distribution tax (DDT) on such dividend in F.Y. 2012-2013 Audited accounts.

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Mar 31, 2012

1. Scheme of Amalgamation

The Hon'ble High Court of Mumbai, on July 12, 2012 sanctioned the scheme of amalgamation under Section 391 to 394 of the Companies Act,1956 of five Investment Companies (the primary assets of which comprise of equity shares in the Company) namely, AVM Capital Service Private Limited (ACSPL), Chevy Capital Service Private Limited (CCSPL), PM Capital Service Private Limited (PCSPL), Pranit Trading Private Limited (PTPL), Viramrut Trading Private Limited (VTPL), (collectively herein after referred to as ‘Transferor Companies') with the Company. The Scheme was earlier approved by the shareholders in the court-convened meeting held on November 3, 2011. The Company has filed the Court Order with the Registrar of Companies on 6th August, 2012 to make the scheme effective in terms of said order dated 12th July 2012. ULL has given effect for the said Scheme in its books of accounts with effect from the appointed date i.e. 1st April 2011. In accordance with the Scheme, the Company has accounted for the Amalgamation based on the "Pooling of Interest" method as under: (i) all assets and liabilities appearing in the books of accounts of Transferor Companies have been transferred to & vested in and have been recorded by the Company at their respective book values.

(ii) the investments in equity share capital of the Company as it appears in the books of account of the Transferor Companies have been cancelled.

(iii) the excess of net assets value of the Transferor Companies as reduced by the face value of shares issued by the Company, adjusted for cancellation of equity share capital as mentioned above and net of all expenses in relation to the Scheme, amounting to Rs. 1.62 lacs has been credited to Surplus in the Profit and Loss Account.

(iv) all inter-company transactions have been eliminated on incorporation of the accounts of Transferor Companies in the books of Company.

(v) in consideration of the above, the Company shall issue and allot equity shares, credited as fully paid up, to the extent indicated below, to all the members of the Transferor Companies in the following proportion:

(a) 46,72,552 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares ofRs. 100 each held in ACSPL

(b) 78,43,811 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares ofRs. 100 each held in CCSPL

(c) 46,70,186 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares ofRs. 100 each held in PCSPL

(d) 1,09,36,087 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares ofRs. 100 each held in PTPL

(e) 17,13,547 fully paid up equity shares of Rs. 2 each of the Company for every 1,000 paid up equity shares ofRs. 100 each held in VTPL

Accordingly, 2,82,93,991 fully paid up equity shares of Rs. 2 each of the Company will be issued to the shareholders of the Transferor Companies, which is equivalent to the shares cancelled, vide (ii) above; these shares, aggregating to Rs. 565.88 lacs, pending allotment have been shown as "Share Capital pending allotment" under Share Capital, thus resulting in no change in the total issued & paid up Share Capital of the Company. The new equity shares to be issued as above shall rank pari-passu with the existing equity shares of the Company. As per the scheme of amalgamation, the said shares will be issued & allotted to the shareholders of the transferor companies as per register of members of the transferor companies as on the effective date i.e. 6th August, 2012.

Rights, preferences and restrictions attached to Equity Shares.

The company has one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2 During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also re-classified the previous year figures in accordance with the figures of the current year.

3 Contingent Liabilities :

(Rs. in lacs)

2011-12 2010-11

(i) Claims not acknowledged as debts*. 1,416.00 684.03

(ii) In respect of the Guarantees given to Bank on behalf of :

- Subsidiaries 2,397.15 2,535.60

- Others 223.76 218.06

(iii) Letters of Credit 676.82 518.44

Total 4,713.73 3,956.13

* includes Rs. 88.20 lacs (Previous Year Rs. 88.20 lacs) paid under protest/deposit pending adjudication under Income tax Act ,1961.

(iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.

4 Estimated amount of Contracts remaining to be executed (Net of Advances) on Capital & other account not provided forRs. 11,647.05 lacs (Previous yearRs.8,208.84 lacs).

5 Cash credit and Packing credit ofRs. 949.14 lacs (Previous yearRs. 847.27 lacs) from Bank of India and Bank of Baroda are secured against hypothecation of Inventories, Book debts and mortgage of immovable properties located at Jogeshwari, Roha, Ghaziabad on first pari passu charge & on immovable properties at Goa and Baddi Unit I on a second and subservient charge.

Short Term unsecured borrowings represent Packing / Buyers credit in Foreign currency availed from various banks against Export receivables and Import Letter of Credit. Maximum tenor of such borrowings is 6 months from the date of availment.

6 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7 On internal assessment of long term investments made by the company in its subsidiaries during the year, the management has determined an amount of Rs. 142.55 lacs (previous Year Rs. 125.66 lacs) for diminution, which has been provided in the accounts.

8 The company uses forward contracts to hedge its risk associated with foreign currency fluctuations relating to firm commitments and forecasted transactions. The company does not enter into forward exchange contracts which are intended for speculative purpose.

9 Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company has a defined benefit unfunded obligation for Leave encashment. Generally the leave encashment is paid to employees in case of retirement ,resignation or retirement under VRS except in some case the same is paid annually.

The following tables summarise the funded status and amounts recognised in the balance sheet for gratuity & leave encashment benefits.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The discounting rate is based on material yield on government bonds having currency and terms consistent with the currency and terms of post-employment benefit obligations. The overall expected rate of return on assets is based on the LIC structure of interest rates on gratuity funds.

10 Related Party Disclosures

As per AS-18 issued by the Institute of Chartered Accountants of India, the Company's related parties are as under:

1 Relationships

(i) Subsidiaries of the Company:

Niche Generics Limited

Unichem SA Pty Ltd.

Unichem Farmaceutica Do

Brasil Ltda

Unichem Pharmaceuticals

(USA) Inc

Unichem Laboratories Limited,

Ireland

(ii) Enterprises under significant influence of key management personnel:

Chevy Capital Services Pvt Ltd* PM Capital Services Pvt Ltd.* AVM Capital Services Pvt Ltd* Pranit Trading Pvt. Ltd* Viramrut Trading Pvt Ltd* Uni Distributors Pvt Ltd

(iii) Key Management personnel and their relatives:

Dr. Prakash A. Mody

(Chairman and Managing Director)

Mrs. Anita Mody

Ms. Supriya Mody

Ms. Suparna Mody

Ms Shwetambari Mody

* Scheme of amalgamation becoming effective from 01.04.2011(appointed date) consequent upon sanction from Hon'ble High Court of Mumbai, shares in the name of said companies will get cancelled and new shares will be issued to the shareholders of respective companies. (Refer Note no. 2) However considering the fact that Dividend was paid before effective date , the transactions are reflected hereunder in spite of cancellation of the shares on 01.04.2011.

11 Operating lease:

Premises and certain vehicles are obtained on operating lease and are renewable/cancellable at mutual consent. There are no restrictions imposed by lease arrangements. The lease term is based on individual agreements. There are no sub-leases. The aggregate lease rentals payable, are charged as rent (Refer Note No.28) in the Statement of Profit & Loss.

12 The amount of Dividends proposed to be distributed to Equity shareholders for the F.Y. 2011-2012 includes dividend on shares alloted to employees as per ESOP Scheme of the company ,after the Balance sheet but before record date, on which dividend is declared in Board Meeting. The total 126,625 nos. of shares are alloted after balance sheet date on which dividend of Rs. 3/- per share is declared and will be paid after approval of same in ensuing Annual General Meeting of Shareholders. Accordingly provision has been made for dividend distribution tax (DDT) on such dividend in F.Y. 2011-2012 Audited accounts.

13 Interim Dividend for the previous year included an amount of Rs. 2,524.82 lacs @ Rs. 7/- per share (face value of Rs. 5/- per share) declared on 10th May, 2010 and paid on 21st May, 2010. Accordingly said amount along with Dividend Distribution Tax of Rs. 419.34 lacs was shown under "Short term Provisions" in previous year.

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Mar 31, 2010

1 Previous years figures have been regrouped, recast and restated wherever necessary.

2 Contingent Liabilities : (Rs. in lacs)

Current Year Previous Year

(i) Claims not acknowledged as debts*. 582.05 599.78

(ii) In respect of the Guarantees given to Bank on behalf of :

- Subsidiaries 1,214.20 1,352.60

- Others 169.67 185.33

(iii) Letters of Credit 140.75 441.70

Total 2,106.67 2,579.41

* includes Rs. 91.27 lacs (Previous Year Rs. 91.27 lacs) paid under protest/deposit pending adjudication. (iv) Claims made by the employees whose services have been terminated are not acknowledged as debts, the exact liability, whereof is not ascertainable.

2 Estimated amount of Commitments (Net of Advances) on Capital Account, not provided for Rs. 2,075.84 lacs (Previous year Rs. 1,225.96 lacs)

3 (i) External commercial borrowings (ECB) of Rs. Nil (Previous year? Nil) from Co-operative Centrale Raiffeisen

Boerenleenbank B.A., Singapore was secured by first pari-passu charge on Companys immovable properties at Goa and at Baddi Unit I. Company has filled necessary forms with ROC for satisfaction of charges. However related title deeds are pending collection. (ii) Cash credit, Packing credit and Demand loans of? 248.08 lacs (Previous year? 674.78 lacs) from Bank of India and Bank of Baroda are secured against hypothecation of Inventories, Book debts and mortgage of immovable properties located at Jogeshwari, Roha, Ghaziabad on first pari passu charge and on immovable properties at Baddi Unit I and Goa on a second and subservient charge.

4 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5 On internal assessment of long term investments made by the Company in its subsidiaries during the year, the management has determined an amount of? 72.00 lacs (Previous Year? 193.00 lacs) for diminution, which has been provided in the accounts.

6 Addition to Fixed Assets and Capital Work in Progress other than Land includes Rs. 202.82 lacs (Previous year Rs. 382.07 lacs) being expenditure of capital nature on Research & Developments.

7 Establishment & Administrative expenses include political contribution Rs. Nil (Previous Year Rs. 60.00 lacs to Nationalist Congress Party).

8 Debtors are secured to the extent of Initial Advance of Rs. 2,048.35 lacs (Previous Year Rs. 1,878.41 lacs) received from Distributors and Consignment Agents

9 The Company uses forward contracts to hedge its risk associated with foreign currency fluctuations relating to firm commitments and forecasted transactions. The Company does not enter into forward exchange contracts which are intended for speculative purposes.

10 Employee Benefits

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company has a defined benefit unfunded obligation for leave encashment . Generally the leave encashment is paid to employees in case of retirement , resignation or retirement under except in some case the same is paid annually .

The following tables summarise the components of net benefit expense recognised in the Profit and Loss Account and the funded status and amounts recognised in the Balance Sheet for gratuity benefits.

11 Operating lease:

Premises and certain vehicles are obtained on operating lease and are renewable/cancellable at mutual consent. There are no restrictions imposed by lease arrangements. The lease term is based on individual agreements. There are no sub- leases. The aggregate lease rentals payable, are charged as rent (Refer Schedule 15) in the Profit & Loss Account.

12 The deferred tax liability for the current year amounting to Rs. 232.00 lacs (Previous year Rs. 10.00 lacs) & Excess / short provision for taxation of previous years accounted during the current year Rs. 32.63 lacs (Previous year Rs. 13.81 lacs) is shown in the Profit and Loss Account under Provision for Taxation.

13 Interim Dividend includes an amount of Rs. 2,524.82 lacs @ Rs. 7/- per share (face value of Rs. 5/- per share ) declared on 10th May, 2010 and paid on 21st May, 2010. Accordingly said amount along with Dividend Distribution Tax of Rs. 419.34 lacs is shown under Schedule-12 as provisions.

Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 as certified by management.

14 Statement of Installed Capacities (as Certified by the Management) and Actual Production during the year.

a) Production Includes the Companys Products manufactured by others on Loan License basis, but does not include products manufactured by the Company on behalf of others*.

b) The capacity mentioned above is annual capacity based on maximum utilisation of plant and machinery based on existing product mix. Installed capacity may vary due to change in product mix.

c) Installed capacity as certified by management being a technical matter is relied upon by the auditors.