6.17 Provisions, Contingent Liabilities,

Contingent Assets and Commitments

General:

Provisions (legal and constructive) are recognised
when the Company has a present obligation (legal
or constructive) as a result of a past event and it is
probable that an outflow of resources will be required
to settle the obligation, in respect of which a reliable
estimate can be made.

Provisions (excluding retirement benefits and
compensated absences) are not discounted to its
present value and are determined based on best
estimate required to settle the obligation at the
balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current
best estimates.

If there is any expectation that some or all of the
provision will be reimbursed, the reimbursement is
recognised as a separate asset but only when the
reimbursement is virtually certain. The expense relating
to a provision is presented in the statement of profit
and loss net of any virtually certain reimbursement.

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 risk 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 liability is disclosed in the case of:

» A present obligation arising from past events, when
it is not probable that an outflow of resources will
be required to settle the obligation;

» A present obligation arising from past events, when
no reliable estimates is possible;

» A possible obligation arising from past events, unless
the probability of outflow of resources is remote.

Contingent liabilities are not recognised but disclosed
in the standalone financial statements. Contingent

assets are neither recognised nor disclosed in the
financial statements.

Commitments include the amount of purchase order
(net of advances) issued to parties for completion of
assets and Non-cancellable operating lease.

Provisions, contingent liabilities, contingent assets
and commitments are reviewed at each balance
sheet date.

6.18 Fair value measurement

The Company measures financial instruments, such as,
derivatives at fair value at each balance sheet date in
accordance with Ind AS 113.

Financials Statements have been prepared on the
historical cost basis except for the following material
items in the statement of financial position:

» Derivative financial instruments (mainly forward
currency contracts) are measured at fair value
received from Bank.

» Mutual Funds are measured at fair values as per Net
Asset Value (NAV).

» Employee Stock Option Plan (ESOP) at fair values as
per Black Scholes option pricing model.

Fair value is the price that would be received to sell
an asset or settle a liability in an ordinary transaction
between market participants at the measurement date.

The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant's ability to
generate economic benefits by using the asset in its
highest and best use or by selling it to another market
participant that would use the asset in its highest and
best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to
the fair value measurement as a whole:

» Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

» Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

» Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

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.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the

basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.

7. Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended 31
March 2025, MCA has notified Ind AS - 117 Insurance
Contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, w.e.f.
April 1, 2024. The Company has reviewed the new
pronouncements and based on its evaluation has
determined that it does not have any significant
impact in its financial statements.

21.7 Equity shares extinguished on buy-back

For the year ended on 31 March 2025

The Board of Directors of the Company, at its meeting held on 02 May 2024 had approved the proposal of Buy¬
back of 10,28,881 fully paid-up equity shares of the Company of face value of H 2 each at a price of H 2,770/-
per equity share, on a proportionate basis, for an aggregate amount not exceeding H 285.00 Crore through the
tender offer process (“Buyback"), in accordance with the provisions of the Companies Act, 2013, and rules made
thereunder, and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 (the “SEBI
Buyback Regulations"). The buyback issue opened on 05 June 2024 and closed on 11 June 2024. The Company
has taken the impact of buyback in previous financial year and paid in current financial year, for this Company has
utilised its General Reserve (H 13948 Crore), Security Premium (H 0.36 Crore) and Retain Earning (H 145.15 Crore)for
the buyback of its equity shares. Total transaction cost of H 1.61 Crore incurred towards buyback and tax of H 66.35
Crore was offset from retained earnings. In accordance with Section 69 of the Companies Act, 2013, the Company
has created Capital Redemption Reserve of H 0.21 Crore equal to the nominal value of the shares bought back as
an appropriation from the General Reserve.

For the year ended on 31 March 2024

Board of Directors have approved buy back of its 10,28,881 equity shares, being 0.82% of the total paid up equity
share capital (prior buyback) at H 2,770 per equity share for an aggregate amount of H 285.00 Crore on 02 May 2024.

For the year ended on 31 March 2023

The Company bought back 22,10,500 equity shares for an aggregate amount not exceeding of H 315.00 Crore
being 2.59% of the total paid up equity share capital (prior buyback) at H 1,425 per equity share. The equity shares
bought back were extinguished on 19 April 2023.

For the year ended on 31 March 2022

The Company bought back 11,20,000 equity shares for an aggregate amount not exceeding of H 285.60 Crore
being 1.29% of the total paid up equity share capital (prior buyback) at H 2,550 per equity share. The equity shares
bought back were extinguished on 28 February 2022.

For the year ended on 31 March 2021

The Company bought back 7,35,000 equity shares for an aggregate amount not exceeding of H 136.00 Crore being
0.84% of the total paid up equity share capital (prior buyback) at H 1,850 per equity share. The equity shares bought
back were extinguished on 30 December 2020.

46. Employee Benefits

As required by Ind AS 19 'Employee Benefits' the disclosures are as under:

46.1 Defined contribution plans

The Company offers its employee's defined contribution plans in the form of provident fund (PF) and Employees'
pension scheme (EPS) with the government, and certain state plans such as Employees' State Insurance (ESI). PF and
EPS cover substantially all regular employees and the ESI covers certain employees. Contributions are made to the
Government's administered funds. While both the employees and the Company pay predetermined contributions
into the Provident Fund and the ESI Scheme, contributions into the Pension fund is made only by the Company. The
contributions are normally based on a certain proportion of the employee's salary. The Company does not have any
liability beyond depositing these amounts in to the government administered fund. During the year, the Company
has made the following contributions:

46.2 Defined benefit plans

Gratuity:

The Company makes annual contributions to Employees' Group Gratuity-cum Life Assurance (Cash Accumulation)
Scheme of LIC, a funded defined benefit plan for qualifying employees. The Companies scheme provides for
payment to vested employees as under:

On normal retirement/early retirement/withdrawal/resignation:

As per the provisions of Payments of Gratuity Act, 1972 with vesting period of 5 years of service. A benefit ceiling
has changed from of H 0.20 Crore to no limit for Directors in current year.

On the death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity
were carried out as at 31 March 2025. The present value of the defined benefit obligations and the related current
service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan
and the amounts recognised in the Company's financial statements as at the Balance Sheet date:

Although the analysis does not take into account full distribution of cash flows expected under the plan, it does
provide an approximation of sensitivity of assumptions. The estimate of future increase in compensation levels,
considered in the actuarial valuation, have been taken on account of inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.

46.3 Leave Encashment

The Company's employees are entitled for compensated absences which are allowed to be accumulated and
encashed as per the Company's policies. The liability of compensated absences, which is non-funded, has been
provided based on report of independent actuary using “Projected Unit Credit Method".

Accordingly, H 41.39 Crore (Previous Year H 33.07 Crore) being liability as at the year-end for compensated absences
as per actuarial valuation has been provided in the accounts.

47. Share-Based Payments

Company has established “Employee Stock Options Scheme 2011" ('ESOP-2011') and “Share-based Incentive Plan
2019" as approved in earlier year by the shareholders of the Company and Compensation committee of Board of
Directors for key Employees of the Group. The options issued under the above scheme vest in a phased manner.

During the previous year, the Company made the decision to withdraw the Employee Stock Options Scheme 2011
in the Nomination & Remuneration Committee meeting held on 31 January 2024, with immediate effect.

During the year, 15,700 option cancelled by the Company under the Share-based Incentive Plan 2019 to the
employees of the Group (includes 13000 option granted to employee of a subsidiary).

Valuation of stock options

The fair value of stock options granted during the period has been measured using the Black-Scholes option pricing
model at the date of the grant. The Black-Scholes option pricing model includes assumptions regarding dividend
yields, expected volatility, expected terms and risk free interest rates. They key inputs and assumptions used are
as follows:

Share price: The closing price on NSE as on the date of grant has been considered for valuing the options granted.

Exercise Price: Exercise Price is the market price or face value or such other price as determined by the Remuneration
and Compensation Committee.

Expected Volatility: The historical volatility of the stock till the date of grant has been considered to calculate the
fair value of the options.

Expected Option Life: Expected Life of option is the period for which the Company expects the options to be live.
The minimum life of a stock option is the minimum period before which the options cannot be exercised and the
maximum life is the period after which the options cannot be exercised.

Expected dividends: Expected dividend yield has been calculated as an average of dividend yields for four years
preceding the date of the grant.

Risk free interest rate: The risk-free interest rate on the date of grant considered for the calculation is the interest
rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for
Government Securities.

These assumptions reflect management's best estimates, but these assumptions involve inherent market uncertainties
based on market conditions generally outside of the Company's control. As a result, if other assumptions had been
used in the current period, stock-based compensation expense could have been materially impacted. Further, if
management uses different assumptions in future periods, stock-based compensation expense could be materially
impacted in future years. The Company has granted stock options to employees of a subsidiary, the estimated fair
value of stock options issued are included in the carrying value of the investment in the said subsidiary on a straight¬
line basis over the requisite service period of each separately vesting portion of the award.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds
that have declared buyback NAV. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (like mutual funds, Mark to
market derivatives and Non-convertible market link debenture) is determined using valuation techniques which
maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant
inputs required to fair value as instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3.

Measurement of fair values

Valuation techniques and significant unobservable inputs:

The following tables show the valuation techniques used in measuring Level 2 & Level 3 fair values, for financial
instruments measured at fair value in the statement of financial position, as well as the significant unobservable
inputs used:

Risk management framework

Company's board of directors has overall responsibility for the establishment and oversight of the Company's
risk management framework. Management is responsible for developing and monitoring the Company's risk
management policies, under the guidance of Audit Committee.

Company's risk management policies are established to identify and analyse the risks faced by it, to set appropriate
risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Company's activities. Company, through its
training and procedures aims to maintain a disciplined and constructive control environment in which all employees
understand their roles and obligations.

Company's Audit committee oversees how management monitors compliance with the Company's risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced
by the Company. The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes
both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to
the Audit committee.

i. Credit risk

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

There are no unbilled receivables, hence the same is not disclosed in the ageing schedule.

There are no other trade receivables which have significant increase in credit risk.

The loss allowance on trade receivable has been computed on the basis of Ind AS 109, Financial Instruments which
require such allowance to be made even for trade receivable considered good on the basis that credit risk exists
even though it may be very low.

(b) Financial instruments

Company limits its exposure to credit risk by investing in liquid securities issued by mutual funds having a credit
ranking of at least 3 and above from CRISIL or equivalent rating agency. Company monitors changes in credit risk
by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, the Company
adjusts its exposure to various counterparties.

ii. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral
obligations without incurring unacceptable losses. The Company's objective is to, at all times maintain optimum
levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and
deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans,
debt, and overdraft from banks at an optimised cost. Working capital requirements are adequately addressed by
internally generated funds. Trade receivables are kept within manageable levels.

Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments
at an amount in excess of expected cash outflows on financial liabilities over the next six months. The ratio of cash
and cash equivalents and other highly marketable debt investments to outflows is 0.69 at 31 March 2025 (0.62 at
31 March 2024).

iii. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity
prices - will affect the Company's income or the value of its 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. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and
derivative financial instruments.

The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign currency
exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange
contracts to manage its exposures to foreign exchange fluctuations. All such transactions are carried out within the
guidelines set by the risk management committee.

Sensitivity Analysis on Interest rate

The Company's fixed rate bank deposits and securities are carried at amortised cost. They are therefore not subject
to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flow will fluctuate
because of a change in market interest rates.

Sensitivity Analysis on Equity prices

The Company has invested its surplus funds primarily in debt based mutual funds. The value of investment in these
mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company
on daily basis. The Company has not performed a sensitivity analysis on these mutual funds based on estimated
fluctuations in their NAV as in management's opinion, such analysis would not display a correct picture.

iv. Currency risk

Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases and borrowings are denominated and the functional currency of Company. The currencies in which these
transactions are primarily denominated are US dollars, Australian dollars, Great Britain Pound and Euro.

At any point in time, Company covers foreign currency risk by taking appropriate percentage of its foreign currency
exposure, as approved by risk management committee in line with the laid down policy approved by the Board.
Company uses forward exchange contracts to mitigate its currency risk, most with a maturity of less than one
year from the reporting date. In respect of other monetary assets and liabilities denominated in foreign currencies,
the Company's policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign
currencies at spot rates when necessary to address short-term imbalances.

50. Disaggregation of Revenue

The operations of the Company are limited to only one segment viz. pharmaceuticals and related products. Revenue
from contract with customers is from sale of manufactured goods and traded goods. Sale of goods are made
at a point in time and revenue is recognised upon satisfaction of the performance obligations which is typically
upon dispatch/delivery. The Company has a credit evaluation policy based on which the credit limits for the trade
receivables are established. There is no significant financing component as the credit period provided by the
Company is not significant.

51. Disclosure for Leases under Ind AS 116 - "Lease":

Company has taken various premises under operating lease. These are generally cancellable and ranges from
11 months to 5 years and are renewable by mutual consent on mutually agreeable terms. Some of these lease
agreements have price escalation clauses. There are no restrictions imposed by these lease arrangements and
there are no sub leases. There are no contingent rents. A single discount rate has been applied to a portfolio of
leases with reasonably similar characteristics.

The Company has one ongoing patent litigations as on 31 March 2025. No liability is expected to arise from
these litigations.

The Company does not expect the outcome of the matters stated above to have a material adverse impact on
the Company's financial condition, results of operations or cash flows.

Future cash outflows in respect of liability under clauses (i) to (iii) is dependent on decisions by relevant authorities
of respective disputes.

Code on social Security, 2020

The new Code on Social Security, 2020 (Code) has been enacted, which could impact the contributions by the
Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is
yet to be notified and the rules are yet to be framed. The Company will complete its evaluation and will give
appropriate impact in its financial statements in the period in which the Code becomes effective and the related
rules are published.

63. Assets Classified as Held for Sale

During the previous year, the Company entered into an agreement for the sale of one of its freehold land assets. Consequently, the said
asset was reclassified from "Property, Plant and Equipment” to "Assets Held for Sale” at a carrying amount of H 8.85 Crore, advance of
H 0.51 Crore was received under this agreement and has been recognised as a "Liability against Assets Held for Sale” in the financial
statements. The completion of this transaction was subject to the fulfilment of certain specified conditions outlined in the agreement.

During the year, the proposed transaction for the sale of the freehold land asset was not completed from the buyer's side. In accordance
with the terms of the agreement, the Company has forfeited H 0.02 Crore from the advance amount and refunded the remaining balance
to the buyer. The said freehold land asset continues to be classified under "Assets Held for Sale” at a carrying value of H 8.85 Crore as on
the reporting date, as the Company is currently in discussions with potential buyers; however, the sale has not been finalised as of the
reporting date.

Rental income recognised in profit or loss for investment properties aggregates to H NIL Crore (previous year H 0.01 Crore). Maintenance
and other expenses aggregating to H NIL Crore (previous year H 0.01 Crore).

65. Additional Disclosures Required by Schedule III (Amendments dated 24 March
2021) to the Companies Act, 2013;

A. Relationship with struck off company

There is no such transaction with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

B. Undisclosed income

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

C. Utilisation of borrowings availed from banks

The borrowings obtained by the Company from banks have been applied for the purposes for which such loans were taken.

D. Details of benami property held

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.

E. Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

F. Compliance with number of layers of companies

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

G. Compliance with approved scheme(s) of arrangements

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

H. Details of crypto currency or virtual currency

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

As per our report of even date attached

For B S R & Co. LLP For and on behalf of Board of Directors of

Chartered Accountants Ajanta Pharma Limited

Firm's Registration No.: 101248W/W-100022 CIN - L24230MH1979PLC022059

Rekha Shenoy Yogesh M. Agrawal Rajesh M. Agrawal

Partner Managing Director Joint Managing Director

Membership No.: 124219 DIN: 00073673 DIN: 00302467

Arvind K. Agrawal Gaurang C. Shah

Place: Mumbai Chief Financial Officer Company Secretary

Date: 30 April 2025 FCS No. 6696