13.02 Rights, preferences and restriction attached to shares:

The Company has only one class of equity shares having par value of INR 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Each equity shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except Interim Dividend declared during the year and Company pays the same in Indian Rupees. In the event of liquidation of the Company, the equity Shareholders are eligible to receive the remaining asset of the Company, after distribution of all preferential amounts, in proportion to the number of equity shares held.

The Board has further recommended final dividend of INR 7 (Seven) per equity share (70%) for year 2024-25, subject to the approval of the shareholders.

a Capital reserve: This is mainly used to record the reserves created on receipt of state/central subsidies and amounts forfeited towards the forfeiture of Equity warrants issued. This reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

b Securities premium: This represents the premium received on issue of shares over and above the face value of equity shares.

The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

c General Reserve: Under the erstwhile Companies Act, 1956, general reserves was created through an annual transfer of net income at specified percentage in accordance with applicable regulation. Consequent to the introduction of Companies Act, 2013, the requirement of mandatorily transfer a specified percentage of the net profit to general reserves has been withdrawn. The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

a. The security details for the borrowing balances:

Term Loans from Banks aggregating to INR 222.94 million (Previous year: INR 327.64 million) and External Commercial borrowing from Banks aggregating to INR 533.32 million (Previous year: INR 709.69 million) are secured by first charge on all immovable, movable assets and freehold land of the Company along with the personal guarantee of the directors.

Hire Purchase Loans from Banks aggregating to INR Nil (Previous year: INR 0.42 million) were secured by hypothecation of specific vehicle/car on paripassu basis.

b. Repayment schedule for the borrowing balances:

The secured term loans from banks aggregating to INR 21.66 million (Previous year: INR 37.50 million) are repayable over a period of 5 years in quarterly instalments upto FY 2026-27.

The secured term loans from banks aggregating to INR 17.89 million (Previous year: INR 45.17 million) are repayable over a period of 5 years in monthly instalments upto FY 2025-26.

The secured term loans from banks aggregating to INR 136.30 million (Previous year: INR 185.52 million) are repayable over a period of 5 years in quarterly instalments upto FY 2027-28.

The secured term loans from banks aggregating to INR 47.09 million (Previous year: INR 59.45 million) are repayable over a period of 4 years in monthly instalments upto FY 2028-29.

External Commercial Borrowing from banks aggregating to INR 533.32 million (Previous year: INR 709.69 million) are repayable over a period of 6 years in 21 quarterly instalments upto FY 2027-28.

The hire purchase loan from banks aggregating to INR Nil (Previous year: INR 0.42 million) has been repaid.

c. Interest rates on borrowings:

Interest rates on Term loan is varying, which is linked to MCLR of bank, from time to time.

Interest rates on Hire purchase loan was fixed at 9.26% p.a.

Interest rates on External Commercial Borrowing is varying, which is linked to 3 Months SOFR.

The company has been sanctioned Government Grant of INR 600 million by BIRAC (Biotechnology Industry Research Assistance Council), Government of India enterprise to support the project “Proposal for Facility Augmentation to support Covid Vaccine Manufacturing” under the Mission Covid Suraksha Scheme of Government of India. The Company has received INR Nil during the year (Previous year: INR 260 million) towards the capital equipment and INR Nil during the year (Previous Year: INR 49.80 million) towards the operating expense which is netted off with respective expenses.

a. Cash Credit accounts are secured by first and exclusive hypothecation charge on all the current assets of the company. It is also collaterally secured by Equitable Mortgage of Ahmedabad Office and hypothecation of unencumbered plant and machinery, stocks and trade receivable of the Company and personal guarantee of three directors.

b. Interest Rate on cash credit facilities is varying, which is linked to base rate of Bank, from time to time.

* includes demand from Income Tax Authorities based on assessment/appeal orders and the Company is in appeal with higher authorities, and the Company has been advised that the decision will be in favour of the Company, and hence no provision has been made in the Financial Statements. The matters are pending before respective appellate authorities and not yet settled.

** In respect of Corporate Guarantee of USD 14 Million (INR 1,196.65 Million) issued in favour of Gates Foundation, U.S.A. on behalf of Hester Biosciences Africa Limited, Tanzania (Wholly Owned Subsidiary Company) for setting up of an animal vaccine manufacturing plant.

33 DETAILS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE:_

Pursuant to Section 135 of the Companies Act, 2013, a Company, meeting the applicability of threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities identified by the Company and monitored by CSR Committee.

36 DEFINED BENEFIT OBLIGATIONS:_

a) Defined Contribution Plans:

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognised INR 20.68 million (2023-24: INR 22.01 million) for provident and other fund contribution in the Statement of Profit and Loss. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme. The Company has no further obligations under the plan beyond its monthly contributions.

b) Defined Benefit Plan:

The Company made annual contribution to the Employees’ Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognised by the Company’s financial statement as at 31 March 2025.

(b) Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described bellow:

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 - Inputs based on unobservable market data.

There are no financial assets and liabilities which are measured at Fair value through Profit and Loss or Fair value through OCI and all the financial assets and liabilities are carried at amortised cost. Therefore, disclosure with respect to fair value measurement hierarchy of financial instrument is not required.

(II) Financial risk management:

The Company’s activities are exposed to variety of financial risks. These risks include market risk (including foreign exchange risk and interest rate risks), credit risks and liquidity risk. The Company’s’ overall risk management program seeks to minimise potential adverse effects on the financial performance of the Company through established policies and processes which are laid down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.

(a) Market risk:

Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates and interest rates.

(i) Foreign currency exchange rate risk:

The Company’s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

The major foreign currency exposure for the company is denominated in USD. Additionally, transactions entered into in other currencies are not significant in relation to the total volume of the foreign currency exposures.

(b) Credit Risk:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The customers are categorised based on the nature of transaction and the credit risk associated with them is managed through credit approvals, establishing credit limits and continuously monitoring of the creditworthiness of the counterparty to which the company grant credit terms in the normal course of business. The Company uses publicly available financial information and its own trading records to rate its major customers.

The Company has used expected credit loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Other receivables consist primarily of security deposits, loans and other receivables. The risk of default is assessed as low.

(c) Liquidity Risk:

Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity.

(iii) Capital management

The capital structure of the Company consists of equity, debt, cash and cash equivalents. The Company’s objective for capital management is to maintain the capital structure which will support the Company’s strategy to maximise shareholders’ value, safeguarding the business continuity and help in supporting the growth of the Company.

As at 31 March 2025, the Company meets its capital requirement through equity and borrowings from banks. The Company monitors its capital and debt on basis of debt to equity ratio.

39 SEGMENT INFORMATION:_

(i) Identification of Segments:

The Company’s operating segments are established on the basis of those components of the Company that are evaluated regularly by the Management Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 Operating Segments), in deciding how to allocate resources and in assessing performance. The Company is principally engaged in manufacturing of Poultry vaccines and Large Animal Vaccines and trading of Poultry, Large animal and Pet health products. The CEO and Managing Director(CMD) and senior management of the Company constitutes the CODM of the Company.

The Company has two principal operating and reporting segments viz. Poultry healthcare and Animal healthcare (Ruminant and Pet). The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

41 OTHER STATUTORY INFORMATION:_

a) The Company do not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

b) Title deeds of all the immovable properties comprising of land/ buildings as disclosed in standalone financial statements, are held in the name of the Company.

c) The Company do not have any transactions with companies struck off.

d) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

f) The Company was not declared wilful defaulter by any bank or financial Institution or other lender.

g) The Company has not advanced or loaned or invested funds (either borrowed funds or security premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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 group 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 to or on behalf of the Ultimate Beneficiaries.

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

j) The monthly Stock Statements as submitted to the Banks are materially in agreement with the books of account of the Company.

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

42 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:_

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Financial Statements. As of 9 May 2025 there were no subsequent event to be recognised or reported that are not already disclosed elsewhere in these Financial Statements.

43 RECENT PRONOUNCEMENTS_

The Ministry of Corporate Affairs (MCA), through notification dated 7 May 2025, amended Ind AS 21 “The Effects of Changes in Foreign Exchange Rates” to provide guidance on determining the spot exchange rate when exchangeability between two currencies is lacking. The amendment also introduces related disclosure requirements:

• New guidance on assessing when a currency is not exchangeable into another and how to estimate the spot exchange rate in such cases.

• Additional paragraphs on recognition, measurement, and disclosure to address these scenarios, including new application guidance and disclosure requirements.

These amendments are effective for annual reporting periods beginning on or after 1 April 2025. The Company is evaluating the potential impact of the application of this amendment on its financial statements.

44 _Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification._