d. Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of Rs.10 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.

e. Employee stock options

Terms attached to stock options granted to employees of the Company and subsidiaries are described in note 45 regarding share-based payments,

f. Information regarding shares in the last five years

No shares were issued for consideration other than cash during the period of five years immediately preceding the year ended March 31, 2024, Further the group has not undertaken any buy back ot shares during the period of five years immediately preceding the yearended March 31, 2024,

Nature and purpose of other reserves Securities premium

Securities premium is used to record the premium on issue of shares. The same is utilised in accordance with the provisions of the Companies Act, 2013.

Share options outstanding account

The Company has established equity-settled share-based payment plans for certain categories of employees of the group Refpr note 4S for further details of these plans.

General Reserve

The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.

Retained earnings

Retained earnings includes re-measurement loss/(gain) on defined benefit plans, net of taxes that will not be reclassified to statement of profit and loss. Retained earnings is a free reserve available to the company.

(d) The long term borrowing facilities are repayable with a range of interest for foreign currency loans in USD at SOFR with spread ranging from 260 bps to 343 bps (March 31, 2023 :154 bps to 350 bps), foreign currency loan in EURO at ESTR 170 bps, For Rupee loans MCLR, T-bill or MIBOR with various spreads ranging from 50 bps to 204 bps (March 31, 2023 : 65 bps to 359 bps), for Rupee loans LTLR with spread of 1205 bps (March 31, 2023 : 780 bps to 1105 bps) and vehicle loan ranging from 7.20% to 9,35% (March 31, 2023 : 7 20% p a. to 9,39% p,a)_r

1. Borrowings from banks are secured by hypothecation of inventories, book debts and receivables (refer note 47). Certain short term borrowings are secured by pledge of 14.57% of shares of Avet Lifescience Private Limited and Corporate guarantee from Avet Lifescience Private Limited.

3. The Cash credit facilities / bank overdraft facilities are repayable on demand and working capital loans are repayable within a year, with a range of interest for foreign currency loans in USD at SOFR 60 bps to SOFR 65 bps and for Rupee loans 7.80% p.a. to 9.55% p.a (March 31, 2023 : foreign currency loans in USD SOFR 70 bps to SOFR 110 bps; foreign currency loans in EURO at EURIBOR 100 bps and for Rupee loans 7.60% p.a, to 9 30% p.a )

(a) All trade payables are current.

(b) The Company's exposure to currency and liquidity risks related to trade payables is disclosed in note 39*

(c) There are no micro and small enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at year end Refer note 50, for information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006.

(a) During the year ended March 31, 2023, share issue expenses were written off in respect of the Company's Proposed Initial Public Offer filed in 2021 (Refer note 57).

(b) During the year, the Company assessed the expected cash flows and the future plans of all its subsidiary Companies and accordingly, recorded provision for impairment of Rs. 1.90 million for investment in Emcure Nigeria Limited ("Nigeria") (March 31, 2023 Rs. Nil). The company also impaired outstanding balance given to Nigeria along with accrued interest amounting to Rs. 91.25 million (March 31, 2023 Rs. Nil).

* The effect of conversion of potential equity share for the year ended March 31, 2024 and the year ended March 31, 2023 is excluded, since the impact on earnings per share is anti dilutive.

Note 38 : Capital management

The Company's objectives when managing capital are to;

- Safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholder's and benefits for other stakeholder's, and

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

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

Generally consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. The Company's strategy is to maintain a gearing ratio less than 1.50x.

The Company is exposed to a variety of financial risks which results from the Company's operating and investing activities. The Company's risk management is carried out by central treasury department under guidance of the board of directors and the core management team of the Company, and it focuses on actively ensuring the minimal impact of Company's financial position The Company does not have any direct significant exposure on commodities.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and other financial assets Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business, The Company establishes an allowance for doubtful debts and impairment that lepiesents its estimate of expected losses in respect of trade and other receivables

Other financial assets that are potentially subject to credit risk consists of cash equivalents, inter corporate loans and deposits.

Further, the Company also recognises loss allowance by using a provision matrix based on historical credit loss experience wherein fixed provision rates are defined for each financial asset which is past due / not due. The Company depending on the diversity of its asset base, uses appropriate groupings if the historical credit loss experience shows significant different loss pactcrns for different customer segments / financial assets.

Also, the Company limits its exposure to credit risk from receivables by establishing a maximum payment period for customers.

The Company considers the recoverability from financial assets on regular intervals so that such financial assets are received within the due dates.

The Company has exposure to credit risk which is limited to carrying amount of financial assets recognised at the date of Balance sheet.

Trade receivables

Trade receivables are usually due within 7-180 days. Generally, and by practice significant domestic customers enjoy a credit period of approximately 7-45 days and for export customers, the credit period ranges from 30 to 180 days. The receivables are not interest bearing, which is the normal industry practice. All trade receivables are subject to credit risk exposure except for receivables from related parties. However, the Company does not identify specific concentration of credit risk with regard to trade receivables, as the amounts recognized represent a large number of receivables from various customers. Further, majority of the receivables pertains to receivables from Subsidiaries, wherein the concentration of credit risk is considered to be low. Certain receivables are also backed by letter of credit from the banks, resulting into negligible credit risk in recovery of such receivables.

The Company uses a provision matrix (simplified approach) to measure the expected credit loss of trade receivables and other financial assets measured at amortised cost.

Cash and cash equivalents and deposits with banks:

With respect to the cash and cash equivalents and deposits with banks, the concentration of credit risk is negligible as these are kept with the reputed banks with very high credit worthiness.

Liquidity risk

Liquidity risk management implies maintaining sufficient cash and availability of funds through adequate amount of committed credit facility to meet the commitments arising out of financial liabilities. Due to the dynamic nature of the underlying business. Company maintains flexibility in funding by maintaining availability under committed credit lines. In addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet future requirements, monitoring balance sheet liquidity ratios against debt covenants and maintaining debt financing plans and ensuiirig compliance with regulatory requirements.

The Company manages its liquidity needs by carefully monitoring scheduled debt payments as well as cash requirement for day-to-day business. Liquidity needs are monitored regularly as well as on the basis of a 30-day cash flow projection. Long-term liquidity needs for a period from 180 to 360 days period are identified and reviewed at regular intervals.

The Company maintains cash and marketable securities to meet its liquidity requirements. Funding in regards to long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities.

Financing arrangements

The Company has access to undrawn borrowing facilities including overdraft facility at the end of the reporting period

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice subject to the continuance of satisfactory credit ratings.

/Wo tun ties of financial liabilities

The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for:

- all non-derivative financial liabilities, and

- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows of financial liabilities.

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Company's income or the value of it's holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as '1BOR reform') During the year ended 31 March 2023, the Company undertook amendments to its financial instruments with contractual terms indexed to IBORs such that they incorporate new benchmark rates, e g., transition from LIBOR to SOFR. As at 31 March 2022, some of the Company's IBOR exposure was indexed to US dollar LIBOR. The alternative reference rate for US dollar LIBOR is the Secured Overnight Financing Rate (SOFR), The Company finished the process of implementing appropriate fallback clauses for all US dollar LIBOR indexed exposures in year ended 31 March 2023, These clauses would automatically switch the insti umenl fiom USD LIBOR to SOFR as per Lhe next interest reset dates

Foreign currency risk

The Company operates in international markets and a significant portion of its business is transacted in different currencies and consequently the group is exposed to foreign exchange risk through its sales and services and imported purchase to/from various countries.

The Company's foreign currency exposure is mainly in USD, EURO, CAD and GBP, The Company's financial liabilities in foreign currency mainly constitutes of bank loans which are repayable over the period of 5 years and trade payables. With sufficient export receivables, the Company has positive net currency asset base as compared to liabilities. Further, the Company receives foreign currency against its exports receivables on regular basis against which the Company pays its loan and import commitments. The Company has significant amount receivable in foreign currency from it's subsidiaries which are generally collected on time, To mitigate the risk arising on account of foreign exchange fluctuation, management closely monitors the cash inflows based on review of expected future movement in foreign currencies,

The Company's main interest rate risk arises from borrowings with variable rates, which exposes the Company to interest rate risk. During March 31, 2024 and March 31, 2023, the Company's borrowings at variable rate were mainly denominated in INR and USD.

Interest rate risk exposure

The Company's interest rate risk arises from borrowings. Borrowings obtained at variable rates expose the Company to interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk.

As a part of Company's interest risk management policy, treasury department closely tracks the base interest rate movements on regular basis. Based on regular review, management assesses the need to enter into interest rate swaps, contracts to hedge foreign currency risk. Management reviews the future movement in base rate against different factors such as overall micro and macro economic factors, liquidity in the system, expected spending cycle Further on regular basis management assess the possibility of entering into new facilities which would reduce the future finance cost which helps management to mitigate the risk related to interest rate movement.

All the borrowing except vehicle loan are at floating rate. Refer note no. 17.

Sensitivity

The Company's policy is to minimize interest rate cash flow risk exposures on borrowing. The Company has exposure to foreign currency as well as local currency. The local currency loans are mainly linked to bank base rate/ marginal cost of funds based lending (MCLR) whereas foreign currency loans are majorly linked with USD libor

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments.

The bank deposits are placed on fixed rate of interest of approximately 4.75% p.a. to 8.25% p.a (March 31, 2023: 4.00% p.a. to 8,25%). As the Interest rates do not vary unless such deposits are withdrawn and renewed, interest rate risk is considered to be low.

* The Company has not disclosed the fair value for financial instruments such as trade receivables, cash and cash equivalents, term deposits with banks, other financial assets and financial liabilities because their carrying amounts are a reasonable approximation of fair value, due to their short-term nature. Fair value of long-term financial assets and financial liabilities carried at amortized cost is not materially different from the carrying amount

There are no transfers between any levels during the year

Other notes:

1) A Search and Seizure Operation ('the Operation') was conducted by the Income Tax Department under section 132 of the Income-tax Act, 1961 during December 2020, Company has received orders u/s, 153A on 29th November, 2023 and has filed appeals with before CIT(A) against the said orders. Considering the disallowances, management is of the view that the matters involved are normal tax matters, and accordingly the operation will not have any significant impact on the Company's financial position and performance for the period ended March 31, 2024,

2) The Company is in receipt of various demand notices from the Indian Goods and Services Tax authorities. Excise Duty and Sales Tax demands for input tax credit disallowances and demand for additional Entry Tax arising from dispute on applicable rate are in appeals and pending decisions. The Company has responded to such demand notices and believes that the chances of any liability arising from such notices are less than probable. Accordingly, no provision is made in the financial statements as of March 31, 2024,

3) Pending resolution of the respective proceedings, it is not possible for the Company to estimate the timing of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgment/decisions pending with various forums/authorities.

4) The Company is also contesting other civil claims against the Company which it has not acknowledged as debts and the management believes that its position will likely be upheld in the appellate process. At this stage in the proceedings, it is not possible to estimate the likelihood or extent of the liability, if any.

B. Other legal matters

AstraZeneca Vs Emcure CS (COMM}~407/2020 (Dapagliflozin Tablet)

On Sep 29, 2020, AstraZeneca filed a patent infringement suit for asserting two patents (IN205147 and IN235625) related to Dapagliflozin, against Emcure and sought injunctive relief. Emcure made a statement in Court that "Emcure will not be manufacturing and/or launching its product as it has lost commercial interest in Dapagliflozin''. In view of this statement, Delhi High Court passed an Order closing the captioned application. On November 15, 2021, Emcure filed an application to withdraw its earlier statement and sought permission for launching Dapagliflozin due to revival of business interest. On this basis, the Delhi High Court vide its order dated Feb 22, 2022 has modified its earlier order of Oct 22, 2020, thereby allowing Emcure to manufacture and / or launch the said product subject to the undertaking provided in the Order. Both IN '147 and IN '625 patents expired on October 02, 2020 and Mav 15, 2023 lespeaivulv.

Bristol Myers Squibb (BMS) Vs Emcure CS(COMM)-684/2019

In Dec 2019, BMS sued Emcure in Delhi High Court for infringement of Indian Patent No.247381, expiring on Sep 17, 2022, On Dec 12, 2019, the court granted an ad-interim injunction in favour of BMS and against Emcure, The court directed parties to maintain status quo for launch of its product till the disposal of the application. Thereafter, Emcure filed an appeal division bench of Delhi High Court, which is FAO(OS)(COMM) 377/2019. However, the appeal was disposed off in October 2022 due to the expiry of the suit patent. The right of parties to agitate their respective rights and contentions in respect of the Application for injunction including right to claim restitution, has been kept open to be pursued before the learned Single Judge, The matter is still pending before the Delhi High Court. The Company does not expect any Court decision at least in next few years. There was no launch at risk due to injunction order till patent expiry, Emcure has launched the product only after patent expiry along with several other Generics. Hence the company does not foresee any material adverse effect from the outcome of the case.

Boehrlnger Ingelheim (Bl) Vs Emcure & Others - (Linagliptin)

On June 2, 2022, Shimla Court granted injunction in favour of Boehringer Ingelheim and against Emcure/MSN/Optimus & Eris and directed parties to restrain jointly and severally from infringing Bl Patent, i.e, IN'301, Emcure has filed appeal against the said Injunction order In Himachal Pradesh High Court. The patent IN’301 expired on August 18, 2023 and the said appeal was dismissed as infructuous on March 12, 2024

C. Drug Pricing Matters **

On December 2, 2015, the Company's erstwhile subsidiary Heritage Pharmaceuticals Inc (Heritage) learned that the United States Department of Justice, Antitrust Division ("DOJ") initiated an investigation into Heritage and its employees regarding alfeged violations of U.S. antitrust laws, which prohibit contracting or conspiring to restrain, trade or commerce. In support of that investigation, the DOJ executed relevant search warrants at Heritage's premises and at the residence of one of Heritage's national accounts managers In addition, the DOJ served grand jury subpoenas on Heritage, and several current and former employees, which sought a variety of materials and data relevant to Heritage's generic drug business. Heritage has fully cooperated with the DOJ and responded to its subpoenas.

On May 7, 2018, Heritage received a civil investigative demand from the United States Department of Justice, Civil Division ("DOJ Civil") seeking documents and information in connection with a simultaneous investigation under the False Claims Act.

On May 31, 2019, Heritage announced that it entered into a deferred prosecution agreement ("DPA") with the DOJ relating to a one-count Information for a conspiracy involving glyburide, In conjunction with the DPA, Heritage agreed to pay a USD 225,000 fine. In addition, Heritage also announced that it separately agreed to a settlement with DOJ Civil to resolve potential civil liability underthe False Claims Act in connection with the same antitrust conduct, Under the terms of the settlement with DOJ Civil, Heritage agreed to pay USD 7.1 million. These resolutions fully resolve Heritage's potential exposure in connection with the DOJ's ongoing investigation into the generics pharmaceutical industry.

In addition to the above, on May 30, 2019, Emcure Pharmaceuticals Limited ("Emcure") (erstwhile Holding company of Heritage) also entered into a cooperation and non-prosecution agreement ("NPA") with HOI undpr which the Emcure, and its current officers, directors, and employoet receivod non-prococution protection in oxchangofor its agreement to provide cooperation into the DOJ's investigation. This resolutions fully resolve Emcure's potential exposure in connection with the DOJ's ongoing investigation into the generics pharmaceutical industry.

D. Attorneys General Litigation * *

On December 21, 2015, the Company's erstwhile subsidiary Heritage Pharmaceuticals Inc ("Heritage") received a subpoena and interrogatories from the Connecticut Office of the Attorney General seeking information relating to the marketing, pricing and sale of certain of Heritage's generic products (including generic doxycycline) and communications with competitors about such products. On December 14, 2016, attorneys general of twenty states filed a complaint in the United States District Court for the District of Connecticut against several generic pharmaceutical drug manufacturers and individuals, including Heritage, alleging anticompetitive conduct with respect to, among other things, doxycycline hyalite DR. On June 18, 2018, attorneys general of forty-five states, the District of Columbia and the Commonwealth of Puerto Rico filed an amended consolidated complaint against various drug manufacturers, including Heritage, Emcure and Emcure's Chief Executive Officer, Satish Mehta based on the same alleged conduct. The consolidated complaint (the "State AG Complaint") was subsequently amended to add certain attorneys general alleging violations of federal and state antitrust laws, as well as violations of various states' consumer protection laws.

The consolidated State AG Complaint alleges that Heritage engaged in anticompetitive conduct with respect to fifteen different drugs: acetazolamide; doxycycline monohydrate, doxycycline hyalite DR, fosinopril HCTZ, glipizide metformin, glyburide, glyburide metformin, leflunomide, meprobamate, nimodipine, nystatin, paromomycin, theophylline, verapamil, and zoledronic acid. The consolidated State AG Complaint also includes claims asserted by attorneys general of thirty-seven states and the Commonwealth of Puerto Rico against Heritage, Emcure, and certain individuals, including Emcure's Chief Executive Officer, Satish Mehta, with respect to doxycycline hyclate DR. The allegations in the State AG Complaint are similar to those in the previously filed civil complaints (discussed below).

The consolidated State AG Complaint was transferred and consolidated into the ongoing multidistrict litigation captioned In re Generic Pharmaceuticals Pricing Antitrust Litigation, Case No. 16 MD 2724, which is currently pending in the United States District Court, Eastern District of Pennsylvania (the "Antitrust MDL").

On February 28, 2023, the Court in the Antitrust MDL denied almost all dispositive motions filed by the companies - and some of their former executives - to dismiss the price-fixing allegations

Emcure, Heritage and Satish Ramanlal Mehta have also reached a settlement agreement in principle with the Plaintiff States (the "States Settlement Agreement") which is being considered for approval by the Plaintiff States. The finality of the States Settlement Agreement is subject to approval by each individual Plaintiff State, To date, each individual Plaintiff State has now formally approved the States Settlement Agreement, with the limited exception of one remaining state, where approval still remains pending i,e. Louisiana.

E. Civil Litigation **

Beginning in 2016, Heritage, along with other manufacturers, has been named as a defendant in lawsuits generally alleging anticompetitive conduct with respect to generic drugs. The lawsuits have been filed by putative classes of direct purchases (the "Direct Purchaser Plantiffs"), 2 putative classes of indirect purchasers (the "Endpayer Plantiffs" and the "Indirect Reseller Plantiffs") and by individual opt out plantiff purchasers. They allege harm under federal and state antitrust laws, state consumer protection laws and unjust enrichment claims. Some of the lawsuits also name Emcure and Emcure’s Chief Executive Officer, Satish Mehta, as defendants and include allegations against them with respect to doxycycline hyclate DR. The lawsuits have been consolidated in the Antitrust MDL (referenced above).

A number of other lawsuits have been separately filed against Heritage, and various other manufacturers, by individual plaintiffs who have elected to opt-out of the putative classes. These complaints also generally allege anticompetitive conduct with respect to generic drugs which allegedly caused harm under federal and state antitrust laws, state consumer protection laws and unjust eniidihieiiL claims. These lawsuits have also been consolidated In the pending Antitrust MDL (referenced above).

Emcure, Heritage and Satish Ramanlal Mehta have entered into settlement agreements including (i) a settlement agreement dated October 31, 2023 for the settlement of all claims filed against Emcure and Heritage by all of the Direct Purchaser Plaintiffs in the Civil Cases (the "DPP Settlement Agreement"), and (ii) a settlement agreement dated November 28, 2023 for the settlement of all claims filed against Emcure and Heritage by all of the End-Payer Plaintiffs in the Civil Cases (the "EPP Settlement Agreement"). Settlements have yet to be negotiated with the Indirect Reseller Plaintiffs and the individual opt-out plaintiff purchasers in the Civil Cases, which comprise individual plaintiff purchasers that are not part of the classes of Direct Purchaser Plaintiffs and the End-Payer Plaintiffs Both the DPP Settlement Agreement and the EPP Settlement Agreement must be approved by the Court following the filing of motions seeking such approval by the Direct Purchaser Plaintiffs and the End-Payer Plaintiffs, respectively. On January 23, 2024, the Direct Purchaser Plaintiffs filed a motion for approval of the DPP Settlement Agreement, and on February 13, 2024, the Court granted preliminary approval to the DPP Settlement Agreement. The Court also scheduled a Final Approval Hearing for the DPP Settlement Agreement for September 23, 2024. We are currently waiting for the End-Payer Plaintiffs to file a similar motion for approval of the EPP Settlement Agreement as the next step.

** Company (the Company) has entered into an indemnity agreement with Avet Lifesciences Limited ("Avet Life"), whereby from the effective date of the scheme of arrangement, Avet Life has agreed to indemnify, defend and hold harmless the Company and directors, officers, employees, agent, representatives and shareholders of the Company (the "Indemnified Parties"), as applicable, from and against any and all the losses suffered oi incurred by the Indemnified Pailies, which arises uulof, ur lesulls fiurn oi In connection with any claim and any loss suffered by the Indemnified Parties on account of breach by Avet Life or its subsidiaries and affiliates of any covenants, undertakings and/or obligations of the Indemnification Deed, and in relation to losses arising out of certain identified claims including claims and obligations of the Company under pending litigations in the U.S. Pursuant to the Indemnification Deed, Avet Life will assume all losses or liability, and the payment obligation (if any), that would be owed by the Company in either the State AG Complaint or the Civil Cases under a negotiated settlement agreement, or an adverse verdict rendered by a jury against our Company or our officers, directors and employees. As a result of such indemnity agreement, our Company would be liable for any potential settlement obligation, or adverse jury verdict for the amount directed specifically against it, only in the event that Avet Life is unable to fully satisfy such an obligation or verdict.

J. General

From time to time, the Company is subject to various disputes, governmental and/or regulatory inquiries or investigations, and litigations, some of which result in losses, damages, fines and charges against the Company. While the Company intends to vigorously defend its position in the claims asserted against it, the ultimate resolution of a matter is often complex, time consuming, and difficult to predict. Therefore, except as described below, the Company does not currently have a reasonable basis to estimate the loss, or range of loss, that is reasonably possible with respect to matters disclosed in this note.

The Company records a provision in its standalone financial statements to the extent that it concludes that a contingent liability is probable and the amount can be estimated and has noted those contingencies below The Company's assessments involve complex judgments about future events and often rely heavily on estimates and assumptions. The Company also incurs significant legal fees and related expenses in the course of defending its positions even if the facts and circumstances of a particular litigation do not give rise to a provision in the standalone financial statements.

B) Other commitments

i) Export Oriented Unit compliance

The Company has set up 100% Export Oriented Unit (EOU) as per the permission granted by the Office of the Development Commissioner of SEEPZ, Special Economic 7one, KASF7, kandla, Ministry of commerce, Government of India. The authorities have, inter alia, laid down the following conditions, failure to comply the same will lead to cancellation / revocation of the permission:

i. The entire (100%) production shall be exported except the sales in domestic tariff area admissible as per entitlement.

ii. The EOU of the Company shall be a positive net foreign exchange earner during the block period of5years from the date of commencement of production failure to achieve the same the company will be liable for penal action*

As at the year end, the Company is in compliance with the condition laid down by the authorities and does not expect any non-compliance in future.

ii) Long-term contracts

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses, At the year end, the Company did not have any long-term contracts for which there were any material foreseeable losses (March 31 2023 : Nil)

iii) Derivative contracts

The Company has not entered into any derivative contracts during the year and has no derivative contract outstanding as at the year end.(March 31 2023 : Nil)

(3) Also refer note no. 47 for the details of the collateral security and note no. 42(c) for the details of financial guarantee given by the Company against the loans obtained by the subsidiaries,

(4) All related party transactions entered during the year and outstanding balances were in ordinary course of the business and are on an arm's length basis* Outstanding balances are unsecured and to be settled in cash.

(5) On October 9, 2023, the Board of the Company approved proposal for acquisition of Canadian entities i.e. (i) JFL Inc., Gestion Nirdac Inc., Gestion Stephane Turcotte fnc_v Gpstinn Rpflan Inr, Gestion Fleoraph Inr (rn||prtivp|y 'Mantra Holdcos') (ii) Mantra Pharma Inc ('Mantra') (Hi) Mantra Distribution Inc (Subsidiary of Mantra Pharma Inr ) and (iv) Myriad Pharma Inc. ('Myriad') for a consideration of CAD 57.64 million and issue of Preference shares which will be valued based on EBITDA of acquired group in .subsequent years Pursuant to said transaction, on Nnvpmhpr Ofi, 7073, Mantra Pharma Inr heramp siihsirliary of Marran Pharmarputirals Inr , a stpp down subsidiary of the Company.

Note 44: Assets and liabilities relating to employee benefits a) Defined contribution plans

The Company has certain defined contribution plans Contributions are made as per local regulations The contributions are made to registered provident fund/pension fund/other fund administered by the government- The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

b) Post-employment obligations Gratuity

The Company has a defined benefit gratuity plan for employees governed by the Payment of Gratuity Act, 1972, Employees who are in continuous service for a period of 5 years are eligible for gratuity The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service The gratuity plan is a funded plan and the company makes contributions to fund managed by Life Insurance Corporation of India, Contributions are made as per the demands bv LIC of India.

f) Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed

i) Asset volatility : The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield,

this will create a deficit, All assets are maintained with fund managed by LIC of India

ii) Changes in bond yields: A decrease in bond yields will increase plan liabilities.

iii) Future salary escalation and inflation risk ! Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities

especially unexpected salary increases provided at management's discretion may lead to uncertainties in estimating this increasing risk,

Risk which arises If there Is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements Hence company is encouraged to adopt asset-liability management

The Company's assets are maintained in a trust fund managed by public sector insurance company via, LIC of India, LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years.

g) Defined benefit liability and employer contributions

The Company has agreed that it will aim to eliminate the deficit in gratuity plan over the years. Funding levels are assessed by LIC on annual basis and the Company makes contribution as per the instructions received from LIC, The Company compares the expected contribution to the plan as provided by actuary with the instruction from LIC and assesses whether any additional contribution may be required. The Company considers the future expected contribution will not be significantly increased as compared to actual contribution.

The eligible employees, including directors, are determined by the Remuneration Committee from time to time. These options will vest over period of 3 to S years from the grant date and are subject to the condition of continued service of the employees.

Once vested the option can be exercised within 5 years from dale of Initial Public Offer (IPO). The exercise price of the options is equal to fair market value of the shares as determined by an independent valuer as at grant dales If IPO does not take place or shares are not listed within 2 years from the date of grant, Remuneration committee at its sole discretion, subject to prior approval of the Company's shareholders' can settle the vested options in cash or allow exercise of option before listing at a price arrived at by an independent valuer. Post approval of shareholders, 300,000 options have exercised and 210,000 ootions have been settled in cash durine the year ended March 31,2024.

Options granted under this scheme carry no dividend or voting rights, When exercised, one option is convertible into one equity share

No options have expired or exercised during the periods covered in the above table

Weighted average remaining contractual life of options as at year end is 6,29 Years (March 31, 2023 : 6.46 Years)

Fair value of equity settled share based payment arrangements:

No employee stock options were granted during the year ended March 31,2024.

2,80,000 employee stock options were granted during the year ended March 31, 2023, The fair value as at grant date is determined using the Black Scholes Merton Model which takes into account the exercise price, term of option, share price at grant date, expected price volatility of underlying share, expected dividend yield and risk free interest rate for the term of option.

Volatility Is a measure of the movement In the prices of the Underlying assets Since the Company is an unlisted Company, volatility of similar listed entities has been considered, txpected volatility has been based on an evaluation of the historical volatility of the similar listed entities (peers) share price, particularly over the historical period commensurate with the expected term. The expected term of the instrument has been based on historical experience and general option holder behaviour.

A) There is no significant change in the contract liabilities.

B) The Company satisfies its performance obligations pertaining to the sale of goods at point in time when the control of goods is actually transferred to the customers. No significant judgment is involved in evaluating when a customer obtains control of promised goods. The contract with customers are generally fixed price contract {except for contracts with subsidiaries, wherein llieie is variable consideration) subject to refund due to returns and do not contain any financing component. The payment is generally due within 7-180 days. The Company is obliged for returns/refunds due to expiry & saleable returns. There are no other significant obligations attached in the contract with customer.

C) There is no significant judgement involved in ascertaining the timing of satisfaction of performance obligation and in evaluating when a customer obtains control of promised goods. Transaction price ascertained for the performance obligation of the Company is agreed in the contract with the customer. Further, the variable consideration is an estimate amount arrived by using expected value method.

E) Major customer

There is no customer having sales of more than 10% of Company's total revenue for the year ended Mai ch 31, 2024 and March 31, 2023.

Receivable from Avet Lifesciences Private Limited of Rs. 1,741.41 million is more than 10% of the Company's total receivable for the year ended March 31, 2024.

Receivable from Avet Lifesciences Private Limited of Rs. 1,628.71 million and from Emcure Pharma Peru S.A.C. of Rs. 1,600.32 million is more than 10% of the Company's total receivable for the year ended March 31, 2023.

The measurement of each segment's revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the Company's consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements

The Company has received eligibility under Production Linked Incentive scheme of the Government of India, The Company has recognized income of Rs. 153,56 million as on March 31, 2024 (March 31, 2023 : Rs, 71 70 million) under the said scheme. Balance receivable under this scheme of Rs 155,00 million as on March 31, 2024 {March 31, 2023: Rs, 34 05 million) is disclosed under ’other current financial assets¹ There are no unfulfilled conditions or other contingencies attached to this grant.

Note 54 : Additional regulatory information required by Schedule III

i No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority iiL The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

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

v The Company has not entered into any scheme of arrangement which has an accounting impact on current financial year

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

(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

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

(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

viii. There is no income surrendered or disclosed as income dutitig the current or pievious year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account

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

x. The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

xi. The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note 2A to the financial statements, are held in the name of the company.

xii. There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

xiii. The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020, The Code has been published in the Gazette of India However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code.

Note 57 : Initial Public Offering ("IPO")

During the year ended March 31, 2022, the Company had filed Draft Red Herring Prospectus ('DRHP') with the Securities and Exchange Board of India ("SEBI"), and an application for In-principle approval from BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") in connection with proposed Initial Public Offering ("IPO") of its equity shares. The Company in connection with proposed Initial Public Offering ("IPO") of its Equity Shares, received observation letter dated December 08, 2021 from the Securities and Exchange Board of India ("SEBI"), which was valid until December 07, 2022 and has since then lapsed. Accordingly the In-principle approvals received from BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") on August 30, 2021 & September 08, 2021, respectively are no longer valid

During the year ended March 31, 2024, the Company has filed Draft Red Herring Prospectus ('DRHP 2023') with the Securities and Exchange Board of India ("SEBI"), and an application for In-principle approval from BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") in connection with proposed Initial Public Offering ("IPO”) of its equity shares. The Company has received In-principle approval from BSE & NSE on March 28, 2024. The Company has responded to initial observations received from SEBI and awaits final observation letter.

Note 58 : HDT Matter

Emcure Pharmaceuticals, Ltd. ("Emcure") was sued by HDT in the United States District Court (US Court) on March 21, 2022 alleging misappropriation of its trade secrets. Emeu re defended the proceedings and on December 4, 2023, the US Court dismissed HDT's claims without prejudice

Note 59 : Events occurring after the March 31, 2024

There are no significant events subsequent to year ended March 31, 2024.

Note 60 : Authorisation of Standalone Financial statements

The standalone financial statements were approved by the Board of Directors on May 27, 2024.

The notes referred to above form an integral part of the standalone financial statements.