Shasun Pharmaceuticals Limited ('SPL' / 'the Company') was incorporated in 1976 having its registered office in Chennai, India. The Company is primarily engaged in manufacturing of Active Pharmaceutical Ingredients (APIs), their intermediates and finished dosage. The Company is also into product development, trading of branded formulations and provides contract research and manufacturing services.

2. Terms / rights attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company's residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

During the year ended March 31, 2015, the amount of proposed dividend recognized as distribution to equity shareholders was Nil (Previous year Re. 1/- per share).

3. Security details and terms of repayment for loans:

i. External commercial borrowing from DBS, Singapore amounting to Rs. 62.50 (Previous year: Rs. 119.84) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

ii. External commercial borrowing from DBS, Singapore amounting to Rs. 390.62 (Previous year Rs. 524.30) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The borrowing carries interest ranging from 3.58% p.a to 3.60% p.a and is repayable in 8 semi-annual instalments of USD 1.25 million after an initial moratorium period of 18 months.

iii. External commercial borrowing from ICICI Bank Ltd, Singapore amounting to Rs. 140.63 (Previous year: Rs. 224.70) is secured by way of paripassu first charge on on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The borrowing carries interest ranging from 3.22% p.a to 3.25% p.a and is repayable in 16 equal quarterly instalments of USD 0.38 million after an initial moratorium period of 15 months.

iv. Foreign currency term loan (with swing option of converting into foreign currency loan) from Axis Bank Ltd amounting to Rs. 244.34 (Previous year Rs. Nil) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The loan carries interest ranging from 4.84% p.a to 4.90% p.a (if availed in USD), 13.00% p.a to 13.25% p.a (if availed in INR) and is repayable in 16 equal quarterly instalments of USD 0.24 million.

v. Foreign currency term loan (with swing option of converting into foreign currency loan) from State Bank of India amounting to Rs. 242.30 (Previous year Rs. 290.36) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

vi. Foreign currency term loan (with swing option of converting into foreign currency) loan from State Bank of Mysore amounting to Rs. 282.16 (Previous year Rs. 295.11) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The borrowing carries interest ranging from 5.83% p.a to 5.86% p.a (if availed in USD), 14.10% p.a to 14.75% p.a (if availed in INR) and is repayable in 60 equal monthly instalments of USD 0.08 million after an initial moratorium period of 12 months.

vii. Foreign currency term loan (with swing option of converting into foreign currency loan) from State Bank of Travancore amounting to Rs. 453.46 (Previous year Rs.482.84) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot unit) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The borrowing carries interest ranging from 6.33% p.a to 6.39% p.a (if availed in USD), 14.00% p.a to 16.25% p.a (if availed in INR) and is repayable in 60 equal monthly instalments of USD 0.13 million after an initial moratorium period of 12 months.

viii. Rupee term loan from Export Import Bank of India (Exim Bank) amounting to Rs. 400.00 (Previous year Rs. 225) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC, Unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

The borrowing carries interest ranging from 13.50% p.a to 13.65% p.a and is repayable in 20 equal quarterly instalments of Rs. 20.00 million after an initial moratorium period of 24 months.

ix. Rupee term loan from Export Import Bank of India (Exim Bank) amounting to Rs. 69.40 (Previous year Rs. 69.40) is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

Paripassu Second Charge on the entire Current Assets.

x. Standby line of credit availed by SVADS Holding SA, Switzerland (wholly owned subsidiary) amounting to GBP 2.00 million (Previous year GBP 2.00 million) from Axis Bank Ltd, Dubai with support of Axis Bank Ltd is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other assets in Dispensary, located at Pondicherry

Paripassu Second Charge on the entire Current Assets of the Company present and future.

xi. Standby line of credit availed by SVADS Holding SA, Switzerland (wholly owned subsidiary) amounting to GBP 3.33 million (Previous year Nil) from Axis Bank Ltd, Dubai with support of Axis Bank Ltd is secured by way of paripassu first charge on the following:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other assets in Dispensary, located at Pondicherry

4. Paripassu Second Charge on the entire Current Assets of the Company present and future.

i. Total working Capital facilities comprising cash credit, overdrafts, packing credit and other loans from banks under consortium arrangement from bankers aggregating to Rs. 4,944.50 (Fund based Rs. 2,700, Non-fund based Rs. 2,000, standby line of credit amounting to Rs. 244.50) is secured by way of first paripassu charge on the entire current assets of the Company and paripassu second charge on the following fixed assets of the Company:

(a) Land, building, plant and machinery in formulation unit, located at Pondicherry

(b) Land, building, Plant and machinery in MPP unit, located at Cuddalore

(c) Land, building, plant and machinery in API unit (API, Biotech, Pilot units) located at Pondicherry

(d) Land, building, plant and machinery in SRC unit located at Vandalur

(e) Land located in Kumarapettai, Cuddalore

(f) Land, building and other fixed assets in Dispensary, located at Pondicherry

(g) Other fixed assets in the above properties (existing and proposed)

ii. Credit Facility from State Bank of Travancore amounting to Nil (Previous year Rs. 100) was secured by way of:

(a) Subservient charge on Current Assets

iii. Credit Facility from Easy Access Financial Services amounting to Nil (Previous year Rs. 110) was secured by way of:

(a) Vacant Land located in Oulgaret District, Pondicherry

(b) Guest House located in Thungalam Village, Visakhapatnam

Loans and advances to related parties: In view of certain customer arrangements and working capital facilities arranged, the management believes that the loan granted to SVADS Holding SA ('SVADS') as at March 31,2015 of Rs 217.59 (Previous year Rs. 211.96) would be recovered and that there is no diminution other than temporary in the value of the investment in SVADS. Accordingly, the investment in SVADS has been carried at cost. The maximum amount outstanding on the above loan at any time during the year was Rs. 219.47 (Previous year Rs. 211.96)

In addition to the above, the Company has incurred expenses on behalf of its subsidiaries and step down subsidiaries amounting to Rs. 65.27 (Previous year Rs.27.84) and the management believes that it would be recovered.

5. Commitments and Contingent liabilities (to the extent not provided for)

Particulars                                   As at           As at
                                              March 31,       March 31,
                                              2015            2014

Excise and customs duty                        1.72           67.61

Counter guarantees given by the               58.23           58.89
company to the bankers for bank
guarantee 

Obligations in respect of letter of 386.87 654.44 credit outstanding

Corporate guarantee given to the 600.99 647.60 bankers in respect of loan taken by Shasun Pharma Solutions Limited, UK (wholly owned subsidiary)

Out of the above corporate guarantee 511.71 518.64 utilized in connection with loans availed by SPSL, UK

Other claims against the Company not            -             20.37
acknowledged as debts 

Estimated amount of contracts 243.34 494.89 remaining to be executed on capital account and not provided for (net of advances)

Commitments relating to further               42.97          41.19
investment in joint venture 

The Company had entered into 3 operating lease arrangements in respect of Office space, Pondy guest house and Cuddalore guest house during the previous year with a lease term of 2, 3 and 4 years respectively, which are subject to renewal at mutual consent thereafter. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expense recognized during the year amounts to Rs. 15.79 (Previous year: Rs.12.67). The schedule for future minimum lease payments in respect of non-cancellable operating leases is set out below:

7. Related party disclosures

Details of related parties including summary of transactions entered into by the Company during the year ended March 31,2015 are summarized below:

Name of related parties and description of relationship:

Wholly owned subsidiaries:

Shasun USA Inc., USA

Shasun Life Sciences Private Limited, India

SVADS Holding SA, Switzerland

Wholly owned step down subsidiaries:

Shasun Pharma Solutions Limited, UK (100% subsidiary of SVADS Holding SA)

Shasun Pharma Solutions Inc., USA (100% subsidiary of SVADS Holding SA)

Stabilis Pharma Inc., USA (100% subsidiary of SVAdS Holding SA)

Joint venture:

Shasun NBI LLC, USA

Shasun NBI Nanotech India Private Limited, India (subsidiary of Shasun NBI LLC, USA) (till December 11, 2014)

Associate:

Chemsynth Laboratories Pvt Ltd, India Alivira Animal Health Limited (till March 30, 2015)

Key management personnel and their relatives:

Dr. S Devendra                      Wholetime Director

S Abhaya Kumar                      Managing Director

S Vimal Kumar                       Wholetime Director

M Mohan                             Wholetime Director
                                   (till August 6, 2014)

Dr. Arun Chandra Karmakar           Wholetime Director 
                                   (from August 6, 2014)

S Hariharan                         Chief Financial Officer

S Murali Krishna                    Company Secretary

A Deepak                            Son of S Abhaya Kumar

A Mayur                             Son of S Abhaya Kumar

D Jitesh                            Son of Dr. S Devendra

D Chaitanya                         Son of Dr. S Devendra

V Jatin                             Son of S Vimal Kumar

V Nitin                             Son of S Vimal Kumar

Shasun Leasing and Finance Pvt Ltd Lifecell International Pvt Ltd Devendra Estate Private Limited Shasun Foundation Trust Sundarbhai Shankarlal Charitable trust Nutra Specialities Pvt Ltd

8. Employee Stock Option Plan

During the year, the Board of Directors and members of Shasun Pharmaceuticals Limited ('the Company') approved the Employee Stock Option Plan 2012 ('Plan III') effective April 1, 2012 under which certain employees and directors are eligible to receive options of the Company. Unless otherwise determined by the ESOP Committee, all Shares acquired under the Plan will rank pari passu with other Shares of the Company for the time being in issue, save as regards any right attached to any such Shares by reference to a record date prior to the date of allotment.

The vesting period of the option will be spread over a period of 60 months and the exercise price per option is at Rs 85.60. The Scheme would be administered and supervised by the members of the Board Compensation Governance Committee ('the Committee') of the Company.

The Company has identified "Pharmaceuticals" as its single reportable business segment. Pharmaceuticals segment comprises manufacture of Active Pharmaceuticals Ingredients (API), Intermediates and Formulations.

b) Secondary Segment Information (by geographical segment)

In accordance with AS-17 "Segment Reporting", segment information for geographical segment has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

9. Micro and small enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006, ('MSMED') which came into force from October 2, 2006, certain disclosures are required to be made relating to Micro and Small enterprises. Following are the disclosures in relation to Micro and Small Enterprises to whom the Company owes any sum together with interest outstanding for more than thirty days as at March 31, 2015. The undertakings covered under MSMED and the computation of interest due was determined by the Company on the basis of information available with the Company and have been relied upon by the auditors.

10. Transfer pricing

The Company has international transactions and domestic transactions with related parties. For the financial year ended March 31, 2014, the Company has obtained the Accountant's Report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with the tax authorities. For the financial year ended March 31, 2015, management confirms that it maintains documents as prescribed by the Income-tax Act, 1961 to prove that these international transactions and domestic transactions are at arm's length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

11. During the year, pursuant to the shareholders' approval at the extra ordinary general meeting held on May 21,2014 the Company has made preferential allotment of 3,500,000 equity shares of Rs. 2/- each at a premium of Rs 108/- per share aggregating to Rs. 385 and 7,100,000 convertible warrants of Rs. 2/- each at a premium of Rs 108/- per warrant to M/s Sequent Scientific Limited, Mumbai ('Sequent') after obtaining the approval of stock exchanges. The terms of conversion require that the warrant be converted into one equity share of Rs. 2/- within 18 months from the date of allotment to Sequent. The Company has received Rs. 385 towards allotment of 3,500,000 equity shares and Rs. 195.25 (25% upfront issue price) towards allotment of 7,100,000 convertible warrants during the year. Amount received towards warrant pending allotment has been disclosed as "Money received against share warrants". The Company has declared and paid final dividend for the financial year 2013-14 @ Re. 1 per share to holders of above equity shares, and related dividend distribution taxes.

12. During the previous year, there has been a plant shutdown in Pondicherry unit for a period of 13 days from June 15, 2013 to June 27, 2013, due to labour unrest.

13 During the year, the Company has incurred Rs. 6.55 towards Corporate Social Responsibility related activities and such expenditure has been classified under Other Expenses.

14. Disclosures relating to the Company's share of the assets, liabilities, income and expenses in the joint venture, based on the audited financial statements have been given in the consolidated financial statements of the Company and hence, no separate disclosures have been made in these standalone financial statements.

15. During the previous year, the Company entered into a slump sale agreement, pursuant to which, certain assets and liabilities were transferred to Alivira Animal Health Limited for a net consideration of Rs. 900. The consideration has been discharged by the other party, pursuant to a joint venture agreement, partly in cash amounting to Rs. 270 received by the company during the year and the balance of Rs. 630 by way of issuance of 7,400,000 equity shares of Alivira Animal Health Limited. These shares were allotted on April 11, 2014.

16. Exceptional Items, net

i) Gain on sale of long-term investment: During the current year, the Company has disposed off its investment in Alivira Animal Health Limited ('an associate') having carrying value of Rs. 630 (Previous year Nil) to M/s Sequent Scientific Limited ('Sequent') for a consideration of Rs. 750. The profit on sale of such investment amounting to Rs. 120 has been disclosed in the Statement of Profit and Loss for the year ended March 31, 2015 as an 'Exceptional Item'. As at balance sheet date, the balance due from Sequent amounts to Rs. 650.

ii) Provision for diminution in value of investment: During the current year, the Company has recorded diminution other than temporary in the value of investment amounting to Rs. 63.88 (Previous year Nil) against its investment in Shasun NBI LLC ('a Joint Venture') on account of its negative net worth and its future business plans.

iii) Provision towards impairment of certain fixed assets: During the current year, the Company carried out an impairment review based on the business plans and future projections of its cash generating units. Based on such review, the Company has recorded an impairment charge of Rs. 41.55 (Previous year Nil) against its Biotech division, being the excess of carrying value of fixed assets over its recoverable amount (value in use).

17. During the year, borrowing costs in connection with the borrowing of funds utilized towards qualifying assets amounting to Rs. 15.24 (Previous year: Rs. 59.56) have been capitalized and included in capital work-in-progress.

18. Effective April 1, 2013, based on the recognition and measurement principles set out in the Accounting Standard (AS-30) on Financial Instruments: Recognition and Measurement, the changes in the derivative fair values relating to forward contracts that are designated as effective cash flow hedges, has been recognized directly in shareholders' funds until the hedged transactions occur. As at Balance sheet date there are no outstanding forward contracts.

19. With effect from April 1, 2014, pursuant to the requirement of Companies Act, 2013 ( 'the Act'), the Company has revised the useful life of its fixed assets, as specified in Schedule II of the Act, based on technical evaluation. As a result of this change, the depreciation charge is lower by Rs. 73.90 for the year ended March 31, 2015. In respect of assets whose useful life is already exhausted as on April 1, 2014, depreciation impact on such assets has been adjusted in the Reserves and Surplus in accordance with the requirements of Schedule II of the Act.

20. The Board of Directors ('The Board') approved the scheme of amalgamation of the Company with Strides Arcolab Limited ('the scheme') on September 29, 2014.The Company has filed the scheme with the Hon'ble High Court of Madras ('the Court') and has also conducted the court convened meeting of shareholders on March 12, 2015 at Chennai. Pending statutory approvals, no effect of the above scheme has been given in the financial statements.

21. Comparative figures

Prior year figures have been reclassified/regrouped wherever necessary to conform to the current year's classification.