1. General information

Alembic Pharmaceuticals Limited (CIN L24230GJ2010PLC061123)
is in the business of development, manufacturing, and marketing
of Pharmaceuticals products i.e. Formulations and Active
Pharmaceutical Ingredients. The Company is the public limited
Company domiciled in India and is incorporated under the
provision of the Companies Act applicable in India. Its shares
are listed on the two recognised Stock Exchanges in India.
The registered office of the Company is located at Alembic Road,
Vadodara - 390 003, India.

The financial statements are approved by the Company's board of
directors on 6^th May, 2025.

1.01 Statement of compliance

These financial statements are separate financial statements
of the Company (also called standalone financial statements).
The Company has prepared financial statements for the year
ended March 31,2025 in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 as amended from time
to time together with the comparative period data as at and
for the year ended March 31,2024.

1.02 Basis of preparation of financial statements

The financial statements of the Company have been
prepared in accordance with Indian Accounting Standards
(Ind AS) as prescribed under Section 133 of the Act to be read
with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 as amended from time to time. The Company's
Financial Statements for the year ended 31^st March, 2025
comprises of the Balance Sheet, Statement of Profit and Loss,
Statement of Cash Flows, Statement of Changes in Equity
and the Notes to Financial Statements. All amounts disclosed
in the financial statements and notes have been rounded off
to the nearest crores as per the requirement of Schedule III,
unless otherwise stated.

The Company has consistently applied accounting policies
to all periods presented in these financial statements.

1.03 Basis of Measurement

The financial statements have been prepared on a historical
cost convention on the accrual basis, except for certain
financial instruments that are measured at fair value, viz,
foreign currency contracts, employee benefit plan assets
and investments.

All assets and liabilities have been classified as current or
non-current as set out in the Schedule III (Division II) to the
Companies Act, 2013.

Functional and Presentation Currency

The financial statements are presented in Indian rupees,
which is the functional currency of the Company.

Operating cycle

Based on the nature of products / activities of the Company
and the normal time between acquisition of assets and
their realisation in cash or cash equivalents, the Company
has determined its operating cycle as 12 months for the
purpose of classification of its assets and liabilities as current
and non-current.

Fair value measurement

Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date under current
market conditions. The Company categorizes assets and
liabilities measured at fair value into one of three levels
depending on the ability to observe inputs employed in their
measurement which are described as follows:

(a) Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities.

(b) Level 2 inputs are inputs that are observable, either
directly or indirectly, other than quoted prices included
within level 1, for the asset or liability.

(c) Level 3 inputs are unobservable inputs for the
asset or liability reflecting significant modifications
to observable related market data or Company's
assumptions about pricing by market participants.

For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.

1.04 Significant Accounting Judgments, Estimates and
Assumptions

The preparation of financial statements requires the
management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying

disclosures, and the disclosure of contingent liabilities.
Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Any change in these estimates and
assumptions will generally be reflected in the financial
statements in current period or prospectively, unless they
are required to be treated retrospectively under relevant
accounting standards.

In particular, information about significant areas of estimates
and judgments in applying accounting policies that have
the most significant effect on the amounts recognised in
the financial statements includes financial instruments,
useful lives of property, plant and equipment and intangible
assets, valuation of inventories, measurement of defined
benefit obligations and actuarial assumptions, provisions
and other accruals, sales returns, chargebacks, allowances
and discounts, recoverability/recognition of tax assets/
liabilities,uncertain tax position, assessment of functional
currency, contingencies and fair valuation of investments.

2. Material Accounting Policy Information

2.01 Property, Plant and Equipment (PPE) & Investment
Property

Property, Plant and Equipment is stated at cost, net of
accumulated depreciation and accumulated impairment
losses, if any. Property that is held for long-term rental yields
or for capital appreciation or both and that is not occupied by
the Company is classified as investment property, measured
at cost. Cost comprises of the purchase price net of eligible
input tax credit, and any attributable cost of bringing the
assets to its working condition for its intended use, including
the cost of replacing parts and borrowing costs for long-term
construction projects if the recognition criteria are met.

The cost and related accumulated depreciation are
eliminated from the financial statements upon sale or
retirement of the asset and the resultant gains or losses are
recognized in the statement of profit and loss. Assets to be
disposed off are reported at the lower of the carrying value
or the net realisable value less cost to sell. Freehold land is
carried at historical cost and not depreciated.

The company has adopted, "Cost Model" for accounting of
its Property Plant and Equipment and Investment Property.

On transition to Ind AS, the Company has elected to
continue with the carrying amount of all its Property, Plant
& equipment and Investment Property recognised as at

1^st April 2016 measured as per the previous GAAP and use
that carrying value as the deemed cost of the property, plant
and equipment.

2.02 Capital Work-in-Progress

Projects under construction wherein assets are not ready
for use in the manner as intended by the management are
shown as Capital Work-In-Progress. It includes expenditure
directly attributable for setting up of plants yet to commence
commercial operation.

Directly attributable expenditure comprises of
revenue expenses incurred in connection with project
implementation during the period upto ready for use in the
manner as intended by the management and are treated as
part of the project costs and capitalized. Such expenses are
capitalized only if the project to which they relate, involve
substantial expansion of capacity or upgradation.

2.03 Impairment of Assets
Non- Financial Assets

At each balance sheet date, the Company reviews the
carrying values of its property, plant and equipment
and intangible assets to determine whether there is any
indication that the carrying value of those assets may not be
recoverable through continuing use. If any such indication
exists, the recoverable amount of the asset is reviewed in
order to determine the extent of impairment loss (if any).
Where the asset does not generate cash flows that are
independent from other assets, the Company estimates the
recoverable amount of the cash generating unit to which the
asset belongs.

Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have
not been adjusted. An impairment loss is recognised in the
statement of profit and loss as and when the carrying value
of an asset exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the carrying
value of the asset (or cash generating unit) is increased to
the revised estimate of its recoverable amount so that the
increased carrying value does not exceed the carrying value
that would have been determined had no impairment loss
been recognised for the asset (or cash generating unit) in

prior years. A reversal of an impairment loss is recognised in
the statement of profit and loss immediately.

Financial Assets

At each balance sheet date, the Company assesses whether
a financial asset is to be impaired. Ind AS 109 requires the
Company to apply expected credit loss model for recognition
and measurement of impairment loss. In determining the
allowances for doubtful trade receivables, the Company has
used a practical expedient by computing the expected credit
loss allowance for trade receivables based on a provision
matrix. The provision matrix takes into account historical
credit loss experience and is adjusted for forward looking
information. The impairment loss is based on the ageing of
the receivables that are due and allowance rates used in the
provision matrix. For all other financial assets, expected credit
losses are measured at an amount equal to the 12-months
expected credit losses or at an amount equal to the life time
expected credit losses if the credit risk on the financial asset
has increased significantly since initial recognition.

2.04 Borrowing Cost

Borrowing costs attributable to the acquisition and/or
construction of an qualifying asset, i.e., that necessarily
takes a substantial period of time to get ready for use in
the manner as intended by management, are capitalised as
part of the cost of the asset. All other borrowing costs are
expensed in the period in which they are incurred.

2.05 Inventories

Inventories consist of Raw Materials, Stores and Spares,
Packing Materials, Work-in-Progress, Goods in Transit and
Finished Goods and are measured at the lower of cost and
net realisable value.

Cost includes expenditures incurred in acquiring the
inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and
condition. Cost of purchase is determined on a moving
average basis. In the case of Finished Goods and Work-in¬
Progress, cost includes an appropriate share of overheads
based on normal operating capacity.

Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.

2.06 Financial Instruments

The Company recognises financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument.

a. Financial Assets

(i) Initial recognition and measurement

The Company recognizes financial assets when
it becomes a party to the contractual provisions
of the instrument. All financial assets are
recognized at fair value on initial recognition,
except for trade receivables which are initially
measured at transaction price. Transaction costs
that are directly attributable to the acquisition of
financial assets, that are not at fair value through
profit or loss, are added to the fair value on initial
recognition. Regular way trade of financial assets
are accounted for at trade date.

(ii) Subsequent measurement

For the purpose of subsequent measurement,
financial assets are classified in four categories:

- Financial assets at amortised cost

A financial asset is subsequently measured at
amortised cost, if it is held within a business model
whose objective is to hold the asset in order to
collect contractual cash flows and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding. After initial measurement, debt
instruments are subsequently measured at
amortised cost using the effective interest rate
method, less impairment, if any.

- Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured at fair
value through other comprehensive income if it
is held within a business model whose objective
is achieved by both collecting contractual
cash flows and selling financial assets and the
contractual terms of the financial asset give
rise on specified dates to cash flows that are

solely payments of principal and interest on the
principal amount outstanding.

The Company has made an irrevocable election
for its investments which are classified as equity
instruments to present the subsequent changes
in fair value in other comprehensive income
based on its business model.

- Financial assets at fair value through profit
or loss

Financial assets which are not classified
in any of the above categories are
subsequently fair valued through profit
or loss.

(iii) De-recognition

The company derecognizes a financial asset
when the contractual rights to the cash flows
from the financial asset expire or it transfers
the financial asset and the transfer qualifies for
de-recognition under Ind AS 109.

Cash and cash equivalents

Cash and cash equivalent 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.

Trade receivables

Trade receivables are carried at original
invoice amount less any expected credit loss.
Provisions are made where there is evidence
of a risk of non-payment, taking into account
ageing, previous experience and general
economic conditions. When a trade receivable is
determined to be uncollectable it is written off,
firstly against any provision available and then to
the Statement of Profit and Loss.

Investments in subsidiaries, associates and
joint ventures

The Company has elected to recognise its
investments in subsidiaries, associates and
joint ventures at cost in the separate financial

statements in accordance with the option
available in Ind AS 27, 'Separate Financial
Statements'.

b. Financial Liabilities

(i) Initial recognition and measurement

The Company's financial liabilities include trade
and other payables, loans and borrowings
including bank overdrafts, financial guarantee
contracts and derivative financial instruments.

All financial liabilities are recognised initially at
fairvalue and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.

(ii) Subsequent measurement

The subsequent measurement of financial
liabilities depends on their classification as
follows:

- Financial liabilities at fair value through
profit and loss

Financial liabilities at fair value through profit and
loss include financial liabilities held for trading.
The Company has not designated any financial
liabilities upon initial recognition at fair value
through profit and loss.

- Financial liabilities measured at amortised
cost

After initial recognition, interest bearing loans
and borrowings are subsequently measured
at amortised cost using the effective interest
rate method except for those designated in an
effective hedging relationship.

(iii) De-recognition

A financial liability (or a part of a financial liability)
is derecognized from the Company's balance
sheet when the obligation specified in the
contract is discharged or cancelled or expires.

c. Derivative Financial Instruments

The company holds derivative financial instruments
such as foreign exchange forward and option contracts
to mitigate the risk of changes in exchange rates on
foreign currency exposures. The counter party for
these contracts is generally a bank and these are not

designated as hedges under Ind AS 109, Financial
Instruments.

Any derivative that is either not designated a hedge,
or is so designated but is ineffective as per Ind AS 109,
is categorized as a financial asset or financial liability,
at fair value through profit or loss. Derivatives not
designated as hedges are recognized initially at fair
value and attributable transaction costs are recognized
in the statement of profit and loss when incurred.
Subsequent to initial recognition, these derivatives
are measured at fair value through profit or loss.
Assets/liabilities in this category are presented as
current assets/current liabilities if they are either held
for trading or are expected to be realized within 12
months after the balance sheet date.

2.07 Revenue & Income Recognition

Revenue from contracts with customers is recognised on
satisfaction of performance obligation, when control of the
goods is passed to the customer, at an amount of transaction
price that reflects the consideration the Company expects
to receive. The point at which control passes is determined
based on terms of agreement with the customer or as per
general industry/market practice.

Estimated future returns are calculated based on specific
methodology and assumptions. The methodology and
assumptions used to estimate returns are monitored and
adjusted regularly in the light of contractual and legal
obligations, past trend & experience and projected market
conditions. Revenue is recognised net of such future
expected return and actual return.

Variable consideration arises on the sale of goods as a
result of profit sharing arrangement and various deductions
including chargeback. Revenue is recognised considering
the impact of variable consideration.

Revenue recognition in case of profit sharing is highly
uncertain hence the same is recognised based on reasonable
certainty of revenue.

The company enters into development and marketing
collaborations and out-licences of the Company's
compounds or products to other parties. These contracts
give rise to fixed and variable consideration from upfront
payments, development milestones, sales-based profit
sharing and royalties.

Income dependent on the achievement of milestone is
recognised when the related event occurs and it is highly
probable that significant reversal in the amount of cumulative
revenue recognised will not occur. Sales-based royalties
on a licence of intellectual property are recognised on
confirmation of actual sales.

GST and other taxes on sales are excluded from revenue.

Income from operations includes incentives available under
prevalent schemes are recognised to the extent considered
receivable.

Other income is comprised of interest income, Gain / loss
on investments, dividend income and Insurance claim.
Dividend income and other income is recognized when the
right to receive payment is established.

2.08 Research and Development Expense

All revenue expenses related to research and development
including expenses in relation to development of product/
processes and expenses incurred in relation to compliances
with international regulatory authorities in obtaining of
Abbreviated New Drug Applications (ANDA) and Drug
Master Files (DMF) are charged to the statement of profit
and loss in the year in which it is incurred.

Development expenditure of certain nature is capitalised
as intangible assets under development when the criteria
for recognising an intangible asset are met, usually when a
regulatory filing is intended to be made in a major market
and approval is considered highly probable.

2.09 Employee benefits

Employee benefits include salaries, wages, contribution
to provident fund, gratuity, leave encashment towards
un-availed leave, and other compensated absences.

A. Long Term Employment Benefits

(a) Defined Benefit Obligation Plans:

(i) Gratuity

Defined Benefit Obligation Plans:

The Company operates a defined benefit
gratuity plan which requires contributions
to be made to a separately administered
fund by the Life Insurance Corporation
of India (LIC) and HDFC Life Insurance
Company Ltd. The cost of providing
benefits under the defined benefit plan is

determined using the projected unit credit
method.

The service cost and the net interest cost
are charged to the Statement of Profit
and Loss. Actuarial gains and losses arise
due to difference in the actual experience
and the assumed parameters and also
due to changes in the assumptions used
for valuation. The Company recognizes
these re-measurements in the Other
Comprehensive Income (OCI).

(ii) Provident Fund

The Company's contribution to provident
fund, administered through a Company
managed trust, is recognised as an expense
in the Statement of Profit and Loss.

(b) Defined Contribution plans

Superannuation fund is administered by the HDFC
Life Insurance Company Ltd. The contribution to
Superannuation fund, Contribution to pension
fund, ESIC, EDLI and Labour Welfare Fund are
recognised as an expense in the statement of
profit and loss.

(c) Leave Liability

The Company has a policy to allow accumulation
of leave by employees up to certain days.
Accumulated leave liability as at the year end is
provided as per actuarial valuation. The cost of
providing benefits under the defined benefit
plan is determined using the projected unit
credit method. Actuarial gains and losses arise
due to difference in the actual experience
and the assumed parameters and also due to
changes in the assumptions used for valuation.
The Company recognizes these actuarial gains
and losses in the statement of Profit and Loss, as
income or expense.

B Short Term Employee Benefits

Short term benefits payable before twelve months
after the end of the reporting period in which the
employees have rendered service are accounted as
expense in statement of profit and loss.

the lease payments made; and (c) remeasuring the carrying
amount to reflect any reassessment or lease modifications.

Right-to-use assets: Subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement
date on a straight line basis over the shorter of the lease term
and useful life of the under lying asset.

Impairment

Right to use assets are evaluated for recoverability whenever
events or changes in circumstances indicate that their
carrying amounts may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher
of the fair value less cost to sell and the value-in-use) is
determined on an individual asset basis unless the asset
does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable
amount is determined for the Cash Generating Unit (CGU)
to which the asset belongs.

Short term Lease and Leases of Low Value underlying
assets

Short term lease is that, at the commencement date, has
a lease term of 12 months or less. A lease that contains a
purchase option is not a short-term lease. Low value assets
lease are assessed based on the value of an underlying asset
when it is new, regardless of the age of the asset being
leased. If the Company elected to apply for such lease, the
lessee shall recognise the lease payments associated with
those leases as an expense on either a straight-line basis
over the lease term or another systematic basis. The lessee
shall apply another systematic basis if that basis is more
representative of the pattern of the lessee's benefit.

As a lessor

Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.

Lease income is recognised in the statement of profit and
loss on straight line basis over the lease term.

2.12 Foreign Exchange Transactions

Transactions in foreign currencies are initially recorded by
the Company at the rate of exchange prevailing on the date
of the transaction.

Monetary assets and monetary liabilities denominated
in foreign currencies remaining unsettled at the end of
the year are converted at the exchange rate prevailing on
the reporting date. Differences arising on settlement or
conversion of monetary items are recognised in statement
of profit and loss.

Non-monetary items that are measured in terms of historical
cost in a foreign currency are recorded using the exchange
rates at the date of the transaction. In respect of forward
cover contracts, the mark to market loss / gain as at the
reporting date is charged to Statement of Profit and Loss.
In respect of options contracts to mitigate the probable
foreign exchange fluctuation risk, the options contracts are
fair valued and the resultant variation as at the reporting date
is charged to Statement of Profit and Loss.

2.13 Taxes

a. Current income tax

Income tax expense is recognised in the statement
of profit and loss except to the extent that it relates
to items recognised in Other Comprehensive Income
(OCI) or directly in equity, in such case it is recognised
in OCI or directly in equity respectively. Current income
tax for current and prior periods is recognized at the
amount expected to be paid to or recovered from
the tax authorities, using the tax rates and tax laws
that have been enacted or substantively enacted on
the reporting date. The company offsets current tax
assets and current tax liabilities, where it has a legally
enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.

b. Deferred tax

Deferred income tax assets and liabilities are recognized
for all temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the financial statements. Deferred tax assets are
reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related
tax benefit will be realized. The benefit of credit against
the payment made towards Minimum Alternate Tax
for the earlier years is available in accordance with the
provisions of the section 115J (AA) of Income Tax Act
1961 over the period of subsequent 15 assessment
year and it is recognised to the extent of deferred tax
liability in view of the certainty involved of its realisation
against reversal of deferred tax liability.