15.1 Rights, preferences and restriction attached to equity shares :

The Company has only one class of equity shares having par value of ^ 10 per share. Each holder of equity share is entitled to one vote per share.

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

During the year, Company has allotted 24,00,000 Equity shares to IPCA Laboratories Ltd at a price of Rs. 139.50 (including premium), hence equity capital and securities premium shall stand increased.

16.1 Nature of Reserves:

Capital Reserves

The Capital reserve is created from the of forfeiture of equity warrants and receipts of subsidy for setting up the factories in backward areas for performing research on critical medicines for the betterment of the society.

Securities Premium

Securities Premium account comprises of the premium on issue of shares. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.

General Reserves

The General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss.

16.2 During the year ended 31st March 2023, the Company has issued 50,00,000 Warrants convertible into Equity Shares to Ipca Laboratories Ltd at a price of Rs. 139.50 per warrant, against which the Company has received 25% of the amount and shown under other equity, which will be converted within a period of 18 months from the date of allotment of warrants. During the year, Company has allotted 24,00,000 Equity shares to Ipca Laboratories Ltd, hence reduction in Money received against Share Warrants.

Details of terms of repayment and security provided for in respect of the Long-Term Borrowings as follows :

17.1 a) Term Loan of Rs. 922.62 lakhs from Yes Bank Ltd. Repayble in 18 quarterly instalments starting from

30th April 2024. Interest @ EBLR 2.10% p.a.

b) Above Term Loan From Yes Bank LTD is secured by i) first charged by way of Hypothication on Plant Machineries ii) Second charge by way of Hypothication on Inventory & Book debts. iii) Negetive lien on Fixed Assets of the Company at 4801/B & 4802/A GIDC Ankleshwar, Gujarat.

17.2 108570 10% Cumulative Redeemable Preference Shares of Rs.100 each fully paid up were issued on 30th September 2005 redeemable at the option of the company but not later than 20 years from the date of allotment.

17.3 Interst on Loan and Advances from related parties ranges between 10.50% p.a. to 10.65% p.a. (simple interest).

Details of terms of repayment in respect of Short - Term Borrowings:

21.1 a) Interest on Loans repayable on demand ranges from 5.40% p.a. to 9.25% p.a. ( simple Interest ).

b) Above Loan from Yes Bank Ltd is secured by i) second charged by way of Hypothication on Plant

Machineries ii) Exclusive charge by way of Hypothication on Inventory & Book debts. iii) Negetive lien on Fixed Assets of the Company at 4801/B & 4802/A GIDC Ankleshwar, Gujarat.

21.2 Interest on Loans from related parties ranges from 10.50% p.a. to 10.65% p.a. ( simple Interest ).

36. Contingent Liabilities are not provided for in respect of following:

(i) Demands were raised against the Company aggregating to ^ 680.62 Lakhs (as at 31st March 2023 ^ 680.62 Lakhs) plus interest thereon under the Drug Price Control Order 1979 by the Government of India and the same was contested by the Company. In the earlier years, the Company had received recovery notices for recovery of ^ 2,094.41 Lakhs (as at 31st March 2023 ^ 2,094.41 Lakhs) to be deposited into “Drug Price Equalisation Account”. .

The Company has challenged the said notices in the writ petitions before the Hon’ble High Court of Gujarat. The Hon’ble High Court has admitted the writ petitions subject to the Company depositing certain amounts against the said demands. Accordingly, the Company has deposited ^ 1,032.45 Lakhs (as at 31st March 2023 ^ 1,032.45 Lakhs).

The Company expects favourable outcome in the said writ petitions and hence, the amounts paid have been treated as advances which are considered by the Company as good and recoverable.

(ii) (a) The Company has received an Order from the Gujarat Sales Tax Commissioner (Appeals) Baroda,

dated 24th January, 2011 in respect of Company’s appeal against the demand for Gujarat Sales Tax of ^ 1,324.08 Lakhs for the financial year 2002-2003 for non-submission of proof of export. The Commissioner of Sales Tax (Appeals) based on the facts as submitted, has revised the demand to ^ 85.44 Lakhs (as at 31st March 2023 ^ 85.44 Lakhs) against which Company has made payment of ^ 45.81 Lakhs (as at 31st March 2023 ^ 45.81 Lakhs) under protest. The Company has further contested this demand before the Sales Tax Tribunal. The matter is sub-judice and the payments of ^ 45.81 Lakhs (as at 31st March 2023 ^ 45.81 Lakhs) are considered by the Company as good and recoverable.

(b) There are disputed Sales Tax demands from state of Maharashtra in respect of prior years amounting to ^ 412.41 Lakhs (as at 31st March 2022 ^ 412.41 Lakhs) against which the Company has made payment of ^ 20.78 Lakhs (as at 31st March 2023 ^ 20.78 Lakhs) under protest. The Company has further contested these demands before the Sales Tax Commissioner / Tribunal. The matters are sub-judice and the payments of ^ 20.78 Lakhs for the Maharashtra state demand (as at 31st March 2023 ^ 20.78 Lakhs) are considered by the Company as good and recoverable.

(iii) The Company has received orders from Income Tax Department raising demands aggregating to ^ 313.90 Lakhs (as at 31st March 2023 ^ 463.91 Lakhs) relating to prior years against which the Company has paid ^ 15.44 Lakhs (as at 31st March 2023 ^ 15.44 Lakhs). The matter is sub-judice and the payment of ^ 15.44 Lakhs (as at 31st March 2023 ^ 15.44 Lakhs) is considered by the Company as good and recoverable.

(iv) Employees (Including Ex-Employees) Claims relating to ex-gratia and other benefits aggregating to ^ 433.66 Lakhs (as at 31st March 2023 ^ 433.66 Lakhs) as the matter is sub-judice.

(v) Arrears of dividend on 10% Cumulative Redeemable Preference Shares aggregates to ^ 200.86 Lakhs (as at 31st March 2023 ^ 190.00 Lakhs).

(vi) The Company has received order from Income Tax Department raising demand aggregating to ^ 100.76 Lakhs (as at 31st March 2023 ^ 100.76 Lakhs) relating to prior years against which the Company has paid ^ 20.00 Lakhs (as at 31st March 2023 ^ 20.00 Lakhs). The matter is sub-judice and the payment of ^ 20.00 Lakhs (as at 31st March 2023 ^ 20.00 Lakhs) is considered by the Company as good and recoverable.

(vii) A legal cases is ongoing against the Company at the Metropolitan Magistrate Court in Mazgaon. The case involves a cheque bounce complaint filed under Section 138 of the Negotiable Instruments Act (NI Act).

The complainant requested interim compensation (partial payment) from the court under Section 143-A of the NI Act. This section empowers the Ld. Court to award temporary compensation while the main case continues. The Ld. Court approved the complainant’s request and ordered the Company to pay 20% of the cheque amount being the subject matter of the Complaint as interim compensation. The Company has complied the order dated 04/01/2022 making the payment for an aggregating amount of ^124.26 Lakhs (as of 31st March 2024). The main Complaint is pending and sub-judice. Lyka labs Limited is seriously contesting the matters. Despite the interim payment, the Company believes this amount is recoverable.

A Suit (commercial summary suit) has been filed against the Company in the Mumbai City Civil Court. The Ld. Court ordered the Company to deposit ^22 Lakhs (as of 31st March 2024) to be allowed to defend the case. In compliance of the order and to defend their case the Company has made the required deposit of ^ 22 Lakhs (as of 31st March 2024). The matter is pending and sub-judice. The company considers this amount is recoverable on disposal of the Suit.

37 Fixed Deposits:

During the year, the Holding Company has repaid deposits that were claimed aggregating to ^ 31.12 Lakhs and transferred to IEPF ^ 3.11 lakhs. The balance of unclaimed deposits ^ Nil (as at 31st March 2023 ^ 34.23 Lakhs).

38 Debentures:

Debenture of ^ 13.00 Lakhs (as at 31st March 2021 ^ 13.00 Lakhs) is outstanding due to cheques returned undelivered / Unclaimed.

39 Capital Expenditure:

(i) Tangible Project Capital Work-in-Progress ^ 2,197.17 Lakhs as at 31st March 2024, (as at 31st March 2023 ^ 1,510.37 Lakhs) includes allocable indirect expenditure in respect of modernization/ expansion of Ankleshwar unit aggregating to ^ 700.04 Lakhs (as at 31st March 2023 ^ 114.83 Lakhs) which is pending allocation to Fixed Assets on completion of the project.

(ii) The Company has incurred direct expenditure and allocable indirect expenditure up to 31st March 2024 in respect of “new product development and applied research” aggregating to ^ 108.09 Lakhs (as at 31st March 2023 ^ 112.28 Lakhs) which is carried forward under “Capital Work in Progress - Intangibles”, to be recognized as “Self-Generated Intangible Assets” upon successful development of respective products or to be charged to Statement of Profit and Loss in the year in which development is abandoned.

During the year, the Company has capitalized ^ 3.75 Lakhs (as at 31st March 2023 ^ 46.78 Lakhs) as “Self-Generated Intangible Assets” upon successful development of respective products.

40 During the year, inventories include slow / non-moving raw-material and packing materials procured during the earlier years amounting to ^ 48.39 Lakhs (as at 31st March 2023 ^ 88.84 Lakhs), which are valued at lower of net realisable value or cost whichever is lower. The Company is evaluating to utilize / realize the same.

41 Employment and Retirement Benefits

(i) The actuarial valuation of the present value of the defined benefit obligation in respect of Gratuity has been carried out as at 31st March, 2024. The following tables set out the amounts recognized in the financial statements as at 31st March, 2024 for the defined benefit plans.

43. Segment Disclosures

(a) Segment information for primary segment reporting (by business segments):

Based on guiding principles given in the Indian Accounting standard on ‘Operating Segments’ (IndAS-108), the primary segment of the Company is business segment, which comprises of pharmaceutical products/ pharma related services. As the Company operates in a single primary business segment, no segmental information thereof is given.

(b) Segment information for secondary segment reporting (by geographical segments)

The Board of Directors evaluates the Group’s performance and allocates resources based on an analysis of various performance indicators by reportable segments.

(b) Fair value hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows:

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.

The following table provides the fair value measurement hierarchy of the Company’s financials assets and liabilities that are measured at fair value or where fair value disclosure is required:

(c) Valuation technique to determine fair value

The following methods and assumptions were used to estimate the fair values of financial instruments :

(i) The management assesses that fair value of cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

(ii) The fair values of the equity investment which are quoted, are derived from quoted market prices in active markets. The Investments measured at fair value and falling under fair value hierarchy Level 3 are valued on the basis of valuation reports provided by external valuers with the exception of certain investments, where cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair values within that range. The carrying value of those investments are individually immaterial.

The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the un-predictability of these elements and seek to minimise the potential adverse effects on its financial performance. The Company’s senior management which is supported by a Treasury Management Group (‘TMG’) manages these risks with a six monthly rolling basis due to which a natural hedge exist. TMG advises on financial risks and the appropriate financial risk governance framework for the Company and provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

All hedging activities are carried out by specialist teams that have the appropriate skills, experience and supervision. The Company’s policy is not to trade in derivatives for speculative purposes.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises of risks relating to interest rate risk and other price risks such as equity price risk and commodity price risk. Financial instruments affected by market risks mainly include borrowings, deposits and investments.

Foreign currency risk management

Foreign exchange risk arises on future commercial transactions and on all recognised monetary assets and liabilities, which are denominated in a currency other than the functional currency of the Company. The Company’s management has set policy wherein exposure is identified, benchmark is set and monitored closely, and accordingly suitable hedges are undertaken. Policy also includes mandatory initial hedging requirements for exposure above a threshold.

The Company’s foreign currency exposure arises mainly from foreign exchange imports, exports and other income/expenses in foreign currency, primarily with respect to USD.

As at the end of the reporting period, the carrying amounts of the company’s foreign currency denominated monetary assets and liabilities in respect of the primary foreign currency i.e. USD and derivative to hedge the exposure, are as follows:

The company’s exposure to foreign currency changes for all other currencies is not material.

The Company has entered into various derivatives transactions, which are not intended for trading or sepculative purpose but to hedge the exports receivables included in above and future receivables.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations and investments in debt instruments including debt mutual fund.

(e) Credit risk

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

Trade Receivable

Customer credit risk is managed by SCM team subject to the company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and followed up.

Financial instruments and cash deposits

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

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of bank deposits and cash credit facilities. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

(f) Excessive risk concentration

Concentrations arise when a number of counter parties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry. Company believes that there is no such excessive risk concentration.

48. Capital Management

The Company’s objective when managing capital is to ensure the going concern operation and to maintain an efficient capital structure to reduce the cost of capital, support the corporate strategy and meet shareholders expectations. The policy of the company is to borrow through banks supported by committed borrowing facility to meet anticipated funding requirements. The capital structure is governed by policies approved by the Board of Directors.

51 Other Statutory Information

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

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

(iii) Company has created various charges in favour of Banks, Financial Institutions and Others for securing loan to the Company. The Company is in process of satisfaction of Charges and filing with the Registrar of Companies, Ahamadabad in respect of which dues are settled.

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

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

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

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

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

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

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

(vii) The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

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

(ix) The Company has not been declared as a Wilful Defaulter by any bank or financial institution or government or any government authority.

53. The Company has regrouped / reclassified the previous years figures in order to confirm to the figures of the current year.