h. Provisions, contingent Liabilities & contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
Contingent assets are disclosed in the Financial Statements by way of notes to accounts only in case of
inflow of economic benefits is probable.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts for possible
obligations which will be confirmed only by future events not wholly within the controls of the Company or
present obligations arising from past events where it is not probable that an outflow of resources will be
required to settle the obligation or reliable estimate of the amounts of the obligation cannot be made.
i. Retirement and other employee benefits
i) Gratuity: Gratuity liability is a defined benefit obligation and is provided for on the basis of an
actuarial valuation made at the end of each financial year under the projected unit credit method.
Actuarial gains/losses comprise experience adjustments and the effect of changes in actuarial
assumptions and are recognized immediately in the other comprehensive Income as Income on
the basis of valuation by an independent Actuary. The liability is unfunded.
ii) Provident Fund: A retirement benefit in the form of provident fund scheme is a defined contribution
and the contribution is charged to the statement of profit and loss of the year when the contribution
to the respective fund is due. There are no other obligations other than the contribution payable
to the respective fund.
iii) Compensated Absences: Liability in respect of compensated absence is determined and charged
to the statement of profit and loss on the basis of valuation by an independent actuary.
j. Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the company commits to purchase or sell the asset.
For purposes of subsequent measurements, 'debt instrument' is measured at the amortised cost if both the
following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses
arising from impairment are recognised in the profit or loss. This category generally applies to trade and
other receivables.
Equity investments
All equity investments in subsidiaries are measured at cost less diminution other than temporary. All equity
investments in scope of Ind AS 109 are measured at fair value.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within
equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of similar financial assets) is
primarily derecognised i.e. removed from the Company's balance sheet when:
Ý the Company has transferred its rights to receive cash flows from the asset ; and either
Ý the Company has transferred substantially all the risks and rewards of the asset, or
Ý the Company has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
On derecognition of a financials asset in its entirety, the difference between the assets carrying amount and
the sum of the consideration received and receivable and the cumulative gain or loss will be recognised as
profit or loss on disposal.
Impairment of financial assets
In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
Ý Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance
Ý Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115
The company follows 'simplified approach' for recognition of impairment loss allowance on:
Ý Trade receivables or contract revenue receivables; and
Ý The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right
from its initial recognition.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets that are debt instruments, and are
measured at amortised cost.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has
not increased significantly, 12 months ECL is used to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected
life of a financial instrument. The 12-months ECL is a portion of the lifetime ECL which results from default
events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at
the original EIR. When estimating the cash flows, an entity is required to consider:
Ý All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected
life of the financial instrument cannot be estimated reliably, then the entity is required to use the
remaining contractual term of the financial instrument.
Ý Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on
portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over
the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting
date, the historical observed default rates are updated and changes in the forward-looking estimates are
analysed. On that basis, the Company estimates the following provision matrix based on the assumptions
which are derived based on the expected outcomes.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense
in the statement of profit and loss (P&L). This amount is reflected under the head 'other expenses' in the
P&L. The balance sheet presentation for various financial instruments is described below:
Ý ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the
balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria,
the Company does not reduce impairment allowance from the gross carrying amount.
Ý For assessing increase in credit risk and impairment loss, the Company combines financial instruments
on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is
designed to enable significant increases in credit risk to be identified on a timely basis.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction cost
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Ý Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risks are recognized in
OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the
cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the
statement of profit and loss. The Company has not designated any financial liability as at fair value through
profit or loss.
Ý Financial liabilities at amortised cost
After initial recognition financial liabilities if any are subsequently measured at amortised cost using the
EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
statement of profit and loss.
Ý Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Ý Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is presented in Balance Sheet when, and
only when, the Company has a legal right to offset the recognized amounts and intends either to settle
on a net basis or to realize the assets and settle the liability simultaneously.
k. Cash and cash equivalents:
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of
the Company's cash management.
Cash flows are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the
effects of transactions of no cash nature and any deferrals or accruals of past or future cash receipts or
payments. Cash flow for the year is classified by operating, investing and financing activities.
# Considered as Subsidiaries only for the limited purpose of Companies Act basis voting rights and not as per Ind AS 110
on Consolidated Financial Statements
* The Company's overseas subsidiaries namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech
Inc (Zenotech-USA) were defunct and reported as cancelled/revoked respectively based on the Registration Cancellation
certificate dated 8th June, 2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from
concerned authorities. The Company received winding up order for Zenotech Laboratories Nigeria Limited during FY:
2019-20. However, related filings with RBI is pending.
(b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of INR 10 per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed
by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
(c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates
Out of equity shares issued by the Company, shares held by its holding company, ultimate holding company and their
subsidiaries/ associates are as below:
Securities premium
Securities premium is used to record the premium received on issue of equity shares and preference shares classified as
equity (if any). The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with
the provisions of the Companies Act, 2013.
Retained earnings
The reserve is the profit/(loss) that the Company has earned/incurred till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders. 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.
Provision for indirect taxation :
Directorate General of Foreign Trade (DGFT) had issued 17 EPCG licenses during the period 2003 to 2009 for which
fulfilment of Export Obligation was pending. On 06.05.2016, Directorate of Revenue Intelligence (DRI) issued a show
cause notice to the Company for non-fulfilment of export obligation for the said licenses. On 14.07.2015, RA-Hyderabad
issued orders on 5 EPCG licenses imposing penalties along with Principal and interest.
The case was adjudicated by the Principal Commissioner of Customs vide OR.No. 48/2016-Adjn.Cus.(Commr.) dated
27.03.2017 directing the Company to pay the duty foregone along with applicable interest and redemption fines on 14
licenses.
Out of the 5 licenses, the Company filed export redemption requests for 3 EPCG licenses to RA-Hyderabad on 28.03.2018
and remitted Customs duties amounting to Rs. 297 lakhs in compliance to the order. Meanwhile, the Company filed an
appeal before CESTAT on 06.07.2017 challenging the order on interest, penalties and fines, which is pending for hearing
as on date.
In FY 2023-24, DGFT announced Amnesty Scheme for one time settlement of EPCG dues were default in fulfilment of
export obligations. Accordingly, the Company applied in September'23 for 14 licenses.
The Company remitted balance duty amount of Rs. 57.28 lakhs & interest due Rs. 146.78 lakhs on March 29, 2024
and submitted the Customs certificates confirming the payments towards duty & interest. The Company received Export
Obligation discharge certificate (EODC) for 13 licenses so far. Pending 1 license (93-1678) is related to Order dated July
14, 2015, which is appealed for closure with DGFT.
The Company received final orders from DGFT on 20.03.2026 on its review appeal filed on February 15, 2025 for closure
of orders issued by RA-Hyderabad for 5 licenses . Pending EODC, the Company will carry provision amounting to Rs.
417.13 lakhs as on March 31, 2026.
Note 27 : Earnings per share
Basic EPS amounts are calculated by dividing the profits for the year attributable to equity share holders of the Company
by weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity share holders of the Company by the
weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares
that would be issued on conversion of all the dilutive potential equity shares into equity shares.
The following reflects the profit and share data used in the basic and diluted EPS computation
a. During the FY 2023-24, the Company has registered under Amnesty Scheme for one time settlement of default in
export obligation by “Advance authorization and EPCG scheme” as notified by DGFT and request has been filed for
Export Obligation Discharge Certificate (EODC). Out of 14 EPCG licenses approved under the scheme, 12 licenses
were already settled as of March 31,2025. During the year, the Company received EODC in respect of 1 license and
settled the liability in respect thereof. Accordingly, the Company has reversed the excess provision of Rs. 4.97 lakhs
pursuant to crystallization of the liability and the same has been reported as Exceptional item in statement of profit
and loss.
b. On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial
Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions
Code, 2020, ('Labour Codes') which consolidate twenty-nine existing Labour laws into a unified framework governing
employee benefit during employment and post-employment. The Labour Codes, amongst other things, introduces
changes, including a uniform definition of wages and enhanced benefits relating to leave.
The Company has assessed the financial implications of these changes which has resulted in increase in gratuity and
leave encashment liability arising out of past service cost by Rs. 24.48 lakhs. Considering the impact arising out of
an enactment of the new legislation is an event of non-recurring nature, the Company has presented this incremental
amount as “Exceptional Item” in the Statement of Profit and Loss for the year ended March 31, 2026.
Note 1 - *During the FY 2012-13, the Company received legal notices from the Assistant Commissioner of Labour,
Vikarabad circle, Hyderabad pursuant to applications filed by 19 ex-employees of the Company for non-payment
of gratuity amounting to approximately ? 18.60. The Company had responded to the said notice and the matter
is still pending for hearing
Note 2 - During the A.Y 2020-21 service tax dispute was settled under sabka vishwas scheme which was claimed as an
expense u/s.43B. However the settled amount has been disallowed u/s 143(1)(a) and demand intimation was
issued for ? 204.79. The company has filed an appeal with CIT(A) challenging the disallowance made. However
the appeal was rejected by CIT(A) and hence amount of ? 204.79 already adjusted by CPC has been regularised
by the Company by charging to P&L.
Under Section 143(3), a disallowance of ?171.17 was made, resulting in tax sought to be avoided of ?52.89. The
company lost its appeal in CIT(A), and a penalty of 100% under Section 271(1)(c) was imposed by the National
Faceless Assessment Centre. The company's appeal against the penalty order, was rejected by CIT(A) and
hence the amount of ? 52.89 already adjusted by CPC has been regularised by the Company by charging to
P&L.
Note 3 - During the year 2015-16, the Joint Director General of Foreign Trade (JDGFT) issued orders on 5
EPCG licenses imposing penalties amounting to ? 960 for non-fulfilment of export obligations. The
Company filed appeal before DGFT, New Delhi and DGFT passed an interim stay order on 04.03.2016
directing RA-Hyderabad not to take any punitive action against the Company. However, final disposal
of the matter was pending with DGFT and hence the Company filed review appeal before DGFT on
15.02.2025. DGFT vide its final order dated 29.08.2025 & 20.03.2026 set aside the order passed by the
JDGFT on 14.07.2025 and declared the recovery orders issued pursuant to the said order as infructous.
? 86.40 pertain to redemption fines and penalties imposed by the Principal Commissioner of Customs in the
adjudication order OR.No.48/2016-Adjn.Cus.(Comr) dated 27.03.2017. The Company's appeal before CESTAT
challenging the order is pending for hearing as on the date of balance sheet. (Refer Note No. 21 - “Provision for
Indirect Taxation”).
Legal cases filed by/against the Company
a) . During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under
Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement.
The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay
individually or jointly the outstanding dues to TDB. During the earlier years, 600,000 equity shares of the
Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security.
During the year ended March 31, 2018, Company has repaid all the amount due to TDB ( excluding
Interest) based on the settlement agreement by the DRC (Dispute Resolution Committee). The Interest
liability will depend upon the liability payable less the shares sold in the open market by TDB (Pledged
shares)
b) . The Company has filed certain legal cases before the appropriate forum against the erstwhile promoter
and managing director with regard to loss of vehicles, missing records including intellectual property,
unauthorised use of the name & Logo of the Company and certain missing DNA clones.
c) . Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories
Limited (now Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to
acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, erstwhile
promoter and one or two other shareholders filed a petition in the Hon'ble High Court of Madras. The
Company has been named as Respondent in the said case. An interim injunction in connection with the offer
was given by the Hon'ble High Court of Madras and subsequently it was quashed by the Hon'ble Supreme
Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders
(excluding Ranbaxy) including erstwhile promoter of the Company filed a petition with Securities Appellate
Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning
down erstwhile promoters' complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has
filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8,
2010 has ruled in favour of DS and allowed the open offer to be made at the price of Rs 113.62 per share.
In June 2012, erstwhile promoter has filed a writ petition before Honourable Andhra Pradesh High Court
against Foreign Investment Promotion Board and DS challenging acquisition of 20% shares of the Company
by DS through an open offer.
d) . In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary
course of business including litigation before various tax authorities. The Company's Management does
not reasonably expect that these legal actions, when ultimately concluded and determined, will have a
material and adverse effect on the Company's results of operations or financial conditions. The Company
has accrued appropriate provision wherever required.
(ii) Contingent assets: Nil
b) Defined benefit plans:
Leave Obligation
The actuarial valuation has been carried out using the Projected Unit Credit Method. Under this method, the Defined
Benefit Obligation is calculated taking into account pattern of availment of leave whilst in service and qualifying salary
on the date of availment of leave. In respect of encashment of leave, the Defined Benefit Obligation is calculated
taking into account all types of decrement and qualifying salary projected up to the assumed date of encashment.
Gratuity (Unfunded)
The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees of
the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation
or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with
the Company.
Liabilities with regard to these defined benefit plans are determined by actuarial valuation, performed by an external
actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the
Company to actuarial risks, such as longevity risk, interest rate risk and market risk.
The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and
losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income
and are not reclassified to profit or loss in subsequent periods.
Note 32 (b) : Fair Value Hierarchy
As no financial instrument has been re-measured at fair value on recurring basis as at each financial period end, fair value
hierarchy disclosure is not applicable
Note 33: Financial Risk Management Objectives And Policies
The Company's principal financial liabilities comprise of trade payables and other financial liabilities. The main purpose of
these financial liabilities is to finance the Company's operations. The Company's principal financial assets include security
deposits, trade and other receivables, cash and cash equivalents that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the
management of these risks. All derivative activities for risk management purposes are carried out by specialist teams
that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for
speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these
risks, which are summarised below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity
price risk and commodity risk. Financial instruments affected by market risk include foreign currency payables
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company is not exposed to the interest risk as there are no outstanding borrowings.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the
Company's operating activities (when revenue or expense is denominated in a foreign currency).
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate, with all other
variables held constant. The impact on the Company's profit before tax is due to changes in the fair value of monetary
assets and liabilities.
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.
Trade receivables
Customer credit risk is managed subject to the Company's established policy, procedures and control relating to customer
credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with
this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date. The maximum exposure to credit risk at the reporting date is
the carrying value of trade receivables disclosed in note 8. The Company does not hold collateral as security.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liability when
due.
Note 34 : Operating lease
Operating leases, in which the Company is the lessor, relate to equipment owned by the Company with lease terms up to
7 years. The agreement can be terminated any time by Lessor/ Lessee by giving 60 days prior written notice. All operating
lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does
not have an option to purchase the property at the expiry of the lease period.
Note 35 : Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders. The primary objective of the Company's capital management is
to maximise the shareholder value and to ensure the Company's ability to continue as a going concern.The Company
manages its capital structure and makes adjustments for compliance with the requirements of the financial covenants. To
maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to
shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity
and debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
As the company does not have any debt as on balance sheet date, the gearing ratio is not applicable
Note 36 : Segment Information
The Company is engaged in contract manufacturing of Pharmaceuticals products. Based on similarity of activities/products,
risk and reward structure, organisation structure and internal reporting systems, the company has structured its operations
into single operating segment i.e. Pharmaceuticals.
Customer dependency
Entire portion of the operating revenue earned by the Company is from single customer i.e., Sun Pharma Group. In the
current year, revenue earned from Sun Pharmaceutical Industries Limited is 100% (PY:100%) of the total revenue for the
year.
Note 37 : Interests in other entities
a) Subsidiaries
The Company's subsidiaries as at 31 March 2026 are set out below. Unless otherwise stated, they have share capital
consisting solely of equity shares that are held directly by the Company, and the proportion of ownership interests
held equals the voting rights held by the company. The country of incorporation or registration is also their principal
place of business
Notes:
The managerial personnel are covered by the Company's gratuity policy and Mediclaim insurance policy taken and
are eligible for leave encashment along with other employees of the Company. The proportionate premium paid
towards these policies and provision made for leave encashment/ gratuity pertaining to the managerial personnel has
not been included in the aforementioned disclosures as these are not determined on an individual basis.
Note 39 : Legal cases
a) Update on the events and circumstances relating to on-going differences with Late Dr. Jayaram Chigurupati,
the erstwhile Promoter and Managing Director of the Company.
Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited
(taken over by Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme
herein after referred to as the “current promoters”) there were disagreements on various accounts between Late Dr.
Jayaram Chigurupati and Ranbaxy Laboratories Limited/Daiichi Sankyo Company Limited resulting in various legal
cases being filed by both the parties before various forums. The Management was denied access to the factory and
other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai,
for taking over the physical possession of the factory premises from Late Dr. Jayaram Chigurupati, the erstwhile
Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession
of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate
Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the
factory premises, further assessment by the Management revealed that, among others, certain books and records,
supplementary documents and statutory registers till the period 12 November 2011 were missing and which are still
not in the possession of the Company. The Honourable Company Law Board vide order dated 8 October 2012 further
directed the erstwhile Promoter and Managing Director of the Company to return all the documents and provide
written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honourable
High Court of Andhra Pradesh has also passed a similar order. The Company has not yet received any of these
documents/ information.
The Management, therefore, based on the available limited records, statutory returns filed, supplementary documents,
invoices, external corroborative evidence and after considering the various non compliances under the Companies
Act, 1956, listing agreement and Foreign Exchange Management Act, etc. post 12 November 2011, reconstructed
financial statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing
and compounding such non compliances with the various authorities concerned.
Since matters relating to several financial and non-financial irregularities are sub-judice and various legal proceedings
are on-going, any further adjustments / disclosures to the financial statements, if required, would be made in
the financial statements of the Company as and when the outcome of the above uncertainties is known and the
consequential adjustments / disclosures are identifiable/ determinable.
Accordingly, based on the steps taken by the Company and evidence available so far, any financial impact on the
results of the Company is likely to be significantly low.
b) Investment in subsidiaries:
Upon obtaining control of the Company, the Management observed that no books of account and records were
available regarding its overseas subsidiaries. The management has not received any response from the erstwhile
Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents
/ certificates related to Forex transactions with these subsidiaries including certain loans and investment made in
the same. Provision has not been made for potential and financial consequences arising out of such on-going
evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not
determinable. Meanwhile, the Company received the winding up order for its defunct subsidiary in Nigeria in FY:
2019-20 and the Company is in the process of filing related reports with RBI. The Company's overseas subsidiaries
namely Zenotech Farmaceutica Do Brasil Ltda (Zenotech-Brazil) and Zenotech Inc (Zenotech-USA) were defunct
and reported as cancelled/revoked respectively based on the Registration Cancellation certificate dated 8th June,
2022 and Long Form Standing certificate dated 15th June, 2022 respectively, received from concerned authorities.
Note 44 : Other Statutory Information
a) . No proceeding have been initiated or pending against the Company under the Benami Transactions (Prohibitions)
Act, 1988 (45 of 1988) and the Rules made thereunder.
b) . The Company has not traded or invested in crypto currency or virtual currency during the financial year.
c) . The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMPs, either
severally or jointly with any other person.
d) . The Company does not have any 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).
e) . The Company has not been sanctioned working capital limits from banks or financial institutions during any point of
time of the year on the basis of security of current assets.
f) . The Company has not been declared wilful defaulter by any bank or financial institution or government or any other
government authorities.
g) . 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:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
h) . 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:
i) 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
ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
i) . The Company does not have any transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
j) . The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
k) . 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
l) . No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the
Companies Act, 2013.
m) . 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.
Note 45 : Audit trail
The Company has used accounting software during the year which has the audit trail feature of recording audit trail (edit
log) facility being enabled throughout the year. Post publication of ICAI implementation guide in February 2024, direct
database level changes were also included in audit trial scope, but the company uses such a software that it has no
database but only objects and collections, hence, no changes is possible at that level.
Note 46 : Previous year comparatives
Previous year's figures have been regrouped/reclassified, where necessary, to correspond with the current year's
classification/disclosure.
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