35. EXCEPTIONAL ITEMS

a. Lupin Limited through its wholly owned subsidiary LPI (Lupin Pharmaceuticals Inc.) has launched Mirabegron (FTF) ER Tablets 25 mg (in April 2024) and 50 mg (in September 2024) a generic version of Myrbetriq® Extended-Release Tablets, of Astellas Pharma Global Development, Inc ("Astellas") in US markets.

Upon submitting the ANDA, Astellas filed a lawsuit for patent infringement in 2016 against the Company. The Parties settled the litigation, and the case was dismissed. Subsequently, Astellas filed multiple additional patent infringement lawsuits.

Three of those lawsuits and certain issues from another lawsuit were consolidated into a single case, which was ongoing. On 15.04.2025, the District Court issued an opinion ruling in favor of Astellas Pharma regarding certain invalidity defences with respect to one of the asserted patents.

On 09.02.2026, Lupin Limited and its subsidiary entered into a settlement agreement with Astellas towards ongoing dispute related to Mirabegron ER Tablets a generic version of Myrbetriq ER Tablets in US markets and agreed to pay USD 90.0 million. During the year ended 31.03.2026, the Company has compensated LPI for the settlement payment of ? 1,364.7 million (USD 15.0 million) made by it and accordingly expensed. The balance amount of USD 75.0 million towards prepaid option has been paid and capitalised by the subsidiary.

b. The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four labour codes as follows: Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020 and Occupational Safety, Health and Working Conditions Code, 2020 (collectively referred to as the "New Labour Codes"). The New Labour Codes are effective from 21.11.2025 and introduce changes that include, among other things, setting a uniform definition of wages. The Company has assessed the implications of the New Labour Codes and has recognized an incremental cost of ? 496.4 million during the year ended 31.03.2026 as "Exceptional Items" considering the materiality and non-recurring nature of this impact. The Company continues to monitor the developments pertaining to the New Labour Codes and the impact, if any, will be accounted in accordance with applicable accounting standards.

c. During the year ended 31.03.2026, the Company has determined that the carrying value of investment in a subsidiary is higher than the recoverable amount and has provided for diminution in the value of investment of ? 700.0 million [Refer note 48(a)].

d. During the year ended 31.03.2026, the Company has transferred its Over the Counter ('OTC') and API R&D business in India to its wholly owned subsidiaries Lupinlife Consumer Healthcare Limited and Lupin Manufacturing Solutions Limited respectively, as a going concern on slump sale basis for a consideration of ? 8,200.0 million and ? 180.0 million resulting in gain on divestment of ? 6,589.6 million and ? 37.2 million respectively [Refer note 50(a)].

36. COMMITMENTS:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances,

? 3,797.1 million (31.03.2025 ? 2,233.1 million).

b) Equity commitment in subsidiaries amounting to ? 3,139.0 million (31.03.2025 ? 1,801.0 million) and other commitments in subsidiaries amounting to ? Nil (31.03.2025 ? 300.0 million).

c) Other commitments - Non-cancellable short-term leases is ? Nil (31.03.2025 ? Nil). Low value leases is ? 175.7 million (31.03.2025 ? 182.3 million).

d) Dividends proposed of ? 18/- (31.03.2025 ? 12/-) per equity share is subject to the approval of the shareholders of the Company at the Annual General Meeting, but not recognised as a liability in the financial statements is ? 8,229.2 million (31.03.2025 ? 5,478.8 million).

e) There are product supply commitments pursuant to contracts with various customers under dossier agreements.

f) There are product procurement commitments pursuant to contracts with suppliers under supply agreements.

g) Financial and corporate guarantees issued by the Company on behalf of subsidiaries are disclosed in note 37 and note 67.

e) Financial guarantee aggregating to ? 6,348.6 million (31.03.2025 ? 5,722.6 million) given to third party on behalf of subsidiaries for contractual obligations.

f) From time to time, Lupin Inc. (LI) and its subsidiaries are involved in various intellectual property claims and legal proceedings, which are considered normal to its business, the liability, if any, may fall on Lupin Limited. Some of this litigation has been resolved through settlement.

Future cash outflows in respect of the above, if any, is determinable only on receipt of judgment/decisions pending with the relevant authorities or settlement, as the case may be. 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. The Company believes that the probability of outflow is low to moderate considering the merits of the cases and stages of the litigation.

The Company does not envisage any likely reimbursements in respect of the above.

The Company is involved in various legal proceedings, including product liability related claims, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance policy with an amount it believes is sufficient for its needs. In respect of other claims, the Company believes that the probability of outflow is low to moderate considering the merits of the case and the ultimate disposition of these matters may not have material adverse effect on its Financial Statements.

39. REVENUE (IND AS 115):

a) 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 rendering of research services.

Payment terms with customers vary depending upon the contractual terms of each contract and does not have any significant financing component.

(i) Sale of pharmaceutical 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 depending on the terms of the sale. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established. Credit period varies across customers and geographies based on their credit worthiness. There is no significant financing component as the credit period provided by the Company is not significant.

Variable components such as discounts, chargebacks, rebates, refund liabilities etc. continues to be recognised as deductions from revenue in compliance with Ind AS 115.

(ii) Income from research services and sale of IPs

Income from research services including sale of technology/know-how (rights, licenses and other intangibles) is recognized in accordance with the terms of the contract with customers when the related performance obligation is completed.

The Company enters into certain dossier sales, licensing and supply arrangements that, in certain instances, include certain performance obligations. Based on an evaluation of whether or not these obligations are inconsequential or perfunctory, the Company recognises or defers the upfront payments received under these arrangements.

iv) Sale and leaseback transaction

During the year, the Company entered into sale and leaseback arrangement. Plant & Equipment having carrying amount of ? 2,359.0 million are sold under the arrangement and leased back for a lease term of 3 years. The transfer of Plant & Equipment by the Company satisfies the requirements of Ind AS 115. The Company has measured the right of use asset amounting to ? 2,438.6 million arising from the leaseback arrangement. Gain on sale and leaseback arrangement is ? 14.7 million.

v) Commitments and contingencies

The Company has not entered into lease contracts that have not yet commenced as at 31.03.2026.

B. Information about leases for which the Company is lessor is presented below:

The Company had given on lease, a part of it's office premises forming part of Property, Plant and Equipment to two of its wholly owned subsidiaries for a period of 5 years.

The Company implemented "Lupin Employees Stock Option Plan 2003" (ESOP 2003), "Lupin Employees Stock Option Plan 2005" (ESOP 2005), "Lupin Subsidiary Companies Employees Stock Option Plan 2005" (SESOP 2005), "Lupin Employees Stock Option Plan 2011" (ESOP 2011), "Lupin Subsidiary Companies Employees Stock Option Plan 2011" (SESOP 2011), "Lupin Employees Stock Option Plan 2014" (ESOP 2014) and "Lupin Subsidiary Companies Employees Stock Option Plan 2014" (SESOP 2014) in earlier years, as approved by the Shareholders of the Company and the Nomination and Remuneration Committee of the Board of Directors (the Committee).

The Committee determines which eligible employees will receive options, the number of options to be granted, the vesting period and the exercise period. The options are granted at an exercise price, which is in accordance with the relevant SEBI guidelines in force, at the time of such grants. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of ? 2 each. The options issued under the above schemes vest in a phased manner after completion of the minimum period of one year upto four years with an exercise period of ten years from the respective grant dates.

The weighted average grant date fair value of the options granted under Category B during the years ended 31.03.2026 and 31.03.2025 was ?1,870.4 and ? 2,065.7 per option, respectively.

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. The 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 Nomination and Remuneration 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 div'dends: 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 estimated fair value of stock options is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.

The weighted average inputs used in computing the fair value of options granted were as follows:

The cost of cash-settled transactions is measured initially at fair value at the grant date using a Binomial Option Pricing Model. This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognised in employee benefits expense.

44. POST-EMPLOYMENT BENEFITS:

(i) Defined Contribution Plans:

The Company makes contributions towards provident and pension fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The superannuation fund is administered by the Life Insurance Corporation of India (LIC). Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

(ii) Defined Benefit Plan:

A) The Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC a funded defined benefit plan for qualifying employees. The scheme provides for payment as under:

i) On normal retirement/early retirement/withdrawal/resignation:

As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On death in service:

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

In addition to the above-mentioned scheme the Company also pays additional gratuity as ex-gratia and the said amount is provided as non-funded liability based on actuarial valuation.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31.03.2026. 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.

During the year ended 31.03.2026, the Central Government of India has notified 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, collectively referred to as the 'New Labour Codes', effective from 21.11.2025 primarily impacting the wage definition to be considered for the purpose of defined benefit obligation relating to gratuity.

Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are defined below:

Interest Rate risk The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Investment risk The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary risk The present value of the defined benefit plan liability is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liabilty.

B) The provident fund plan of the Company, except at one plant, is operated by "Lupin Limited Employees Provident Fund Trust" ("Trust"), a separate legal entity. Eligible employees receive benefits from the said Provident Fund. Both the employees and the Company make monthly contributions to the Provident Fund Plans equal to a specified percentage of the covered employee's salary.

The minimum interest rate payable by the Trust to the beneficiaries every year is being notified by the Government of India. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate. The Board of Trustees administer the contributions made by the Company to the schemes and also defines the investment strategy to act in the best interest of the plan participants.

The Company has an obligation to service the shortfall on account of interest generated by the fund and on maturity of fund investments and hence the same has been classified as Defined Benefit Plan in accordance with Ind AS 19 "Employee Benefits".

As per the Guidance Note from the Actuarial Society of India, the Company has obtained the actuarial valuation of interest rate obligation in respect of Provident Fund as at 31.03.2026 and based on the same, there is no shortfall towards interest rate obligation.

Based on the actuarial valuation obtained, the following is the details of fund and plan assets.

Deferred tax assets have not been recognized on capital losses of ? 666.6 million (31.03.2025 ? 677.4 million) and Minimum Alternative Tax (MAT) credit of ? 645.5 million (31.03.2025 ? 676.7 million) on conservative basis. The capital loss can be carried forward till 31.03.2031 and MAT credit can be carried forward through 31.03.2040.

Management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered. Any changes in future taxable income would impact the recoverability of deferred tax assets.

Property, Plant and Equipment and Capital Work in Progress:

During the year, based on management review, the company has assessed the Recoverable amount (i.e. higher of value in use and fair value less cost of disposal) of each individual CGU and compared it to carrying value of respective CGU, which resulted in an impairmenl provision of ? 50.9 million (31.03.2025 ? 151.8 million).

Intangible assets commercialised:

During the previous year ? 259.0 million the Company has provided for impairment of intangibles related to IPs acquired as part of the acquisition from Anglo French Drugs and Industries Limited (AFDIL), related to India market. The impairment was primarily carried out on account of (i) Certain Fixed Dose Combination (FDCs) ban by government and (ii) lower offtake of few brands in generics market, coupled with low margins.

Intangible assets under development:

During the year, the Company decided not to further pursue the development of an IP factoring the risk and reward associated with it and availability of various alternatives in the market. Accordingly, an impairment provision of ? 10.4 million was created.

Assessment of impairment of asset:

The impairment has been determined by considering each individual asset as a cash generating unit (CGU). Recoverable amount of CGUs for which impairment is done is Nil (31.03.2025 Nil). Recoverable amount (i.e. higher of value in use and fair value less cost to sell) of each individual CGU was compared to carrying value and impairment amount was arrived as follows:

- CGUs where carrying value was higher than recoverable amount were impaired and

- CGUs where recoverable amount was higher than carrying value were carried at carrying value

The fair value so used is categorized as a level 3 valuation in line with the fair value hierarchy per requirements of Ind AS 113 "Fair Value Measurement".

The fair value has been determined with reference to the discounted cash flow technique.

The projected cashflows are discounted at post-tax rate ranging from 6.1% to 20.2% for the year ended 31.03.2026 and 7.1% to 21.4% for the year ended 31.03.2025. The terminal growth rate is considered ranging from -5% to 5.5% for the year ended 31.03.2026 and 31.03.2025.

The cash flow projections are based on five years specific estimates, five years estimates developed using internal forecasts and a terminal growth rate thereafter considering the life of intangibles being approx. 10 years. The management has considered ten year growth rate since the same appropriately reflects the period over which the future benefits of the intangibles will accrue to the Company.

Based on the assessment carried out as at 31.03.2026 and after considering performance for the full year ended 31.03.2026, adequate provision is made. Hence, no further provision is required to be made.

49. ASSETS ACQUISITION:

a) On 30.12.2024, the Company had entered into an agreement to acquire diabetes brand Huminsulin® from Eli Lilly and Company (Eli Lilly), along with the associated trademark rights and domain name. Huminsulin range of products comprise of Insulin Human, including Huminsulin R, Huminsulin NPH, Huminsulin 50/50, and Huminsulin 30/70, is indicated for the treatment of type 1 and type 2 diabetes mellitus to improve blood sugar control. The transaction was accounted as an asset acquisition with the total purchase price of ? 4,642.2 million (including additional cost incurred to acquire the asset) and classified under intangible assets.

b) On 13.12.2024, the Company had entered into an agreement to acquire three anti-diabetes trademarks GIBTULIO®, GIBTULIO MET® and AJADUO®, from Boehringer Ingelheim International GmbH (Boehringer Ingelheim). Lupin has been marketing GIBTULIO® and GIBTULIO MET® since 2016, and AJADUO® since 2018 in the Indian market through existing co-marketing agreements with Boehringer Ingelheim India. Boehringer Ingelheim proprietary products comprises - Empagliflozin under the trademark "GIBTULIO", Empagliflozin Metformin under the trademark "GIBTULIO MET" and product Empagliflozin Linagliptin under the trademark "AJADUO". The transaction was accounted as an asset acquisition with the total purchase price of ? 3,284.7 million (Euro 35.0 million) (including additional cost incurred to acquire the asset) and classified under intangible assets.

c) During the previous year, the Company acquired rehabilitation business from Lupin Diagnostic Limited, its wholly owned subsidiary company which includes transfer of all the tangible and intangible assets, contracts, permission, consents, rights, registrations, employees, other assets and liabilities on a slump sale basis with effect from 01.04.2024. The following table summarizes the allocation of purchase price consideration, for the fair values of the assets acquired and liabilities assumed and the resultant capital reserve.

50. BUSINESS RESTRUCTURING

Assets Held for Sale and Transfer of Business Undertaking

i) On 01.07.2025, upon execution of the Business Transfer Agreement, the Company transferred its Over the Counter ('OTC') business, which included transfer of all the tangible and intangible assets, contracts, permission, consents, rights, registrations, employees, other assets and liabilities, to its wholly owned subsidiary, Lupinlife Consumer Healthcare Limited ('LCHL'), as a going concern on slump sale basis for a consideration of about ? 8,200.0 million. The transaction was approved by the Board at its meeting held on 11.02.2025 and 31.03.2025.

ii) On 01.07.2025, upon execution of the Business Transfer Agreement, the Company transferred its API R&D business, which included transfer of all the tangible and intangible assets, contracts, permission, consents, rights, registrations, employees, other assets and liabilities to Lupin Manufacturing Solutions Limited ('LMSL'), wholly owned subsidiary of the Company, as a going concern on slump sale basis for a consideration of about ? 180.0 million. The transaction was approved by the Board at its meeting held on 31.03.2025.

iii) On 01.07.2024, upon execution of the Business Transfer Agreement, the Company transferred its Generic business, which included transfer of all the tangible and intangible assets, contracts, permission, consents, rights, registrations, employees, other assets and liabilities to Lupin Life Sciences Limited ('LLSL') (formerly known as Lupin Atharv Ability Limited), wholly owned subsidiary of the Company, as a going concern on slump sale basis for a consideration of ? 1,100.0 million. The transaction was approved by the Board at its meeting held on 22.03.2024.

54. FINANCIAL INSTRUMENTS:

Financial instruments - Fair values and risk management:

A. Accounting classification and fair values:

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are

presented below. It does not include the fair value information for financial assets and financial liabilities not measured at fair value

if the carrying amount is a reasonable approximation of fair value.

Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). The investments

included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximates the fair value because there is wide range of possible fair value measurements and the costs represents estimate of fair value within that range.

C. Financial risk management:

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk; and

- Market risk

The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company's risk management policies. The committee reports to the board of directors on its activities.

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

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

Trade receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

As at 31.03.2026, the carrying amount of the Company's largest customer (a wholly owned subsidiary in the USA) was ? 43,952.6 million (31.03.2025 ? 33,244.5 million).

Expected credit loss assessment

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.

Cash and cash equivalents

As at the year end, the Company held cash and cash equivalents of ? 1,116.3 million (31.03.2025 ? 3,418.0 million). The cash and cash equivalents are held with banks.

Other Bank Balances

Other bank balances are held with banks.

Investment in mutual funds, Non-Convertible debentures and Commercial papers

The Company limits its exposure to credit risk by generally investing in liquid securities, Non-Convertible debentures and Commercial papers only with counterparties that have a good credit rating. The Company does not expect any losses from nonperformance by these counterparties.

Other financial assets

Other financial assets are neither past due nor impaired except as disclosed under "Export Benefits receivables/Refund due from Government Authorities" in note 9 and "Others (includes miscellaneous receivables)" in note 17.

ii. Liquidity risk:

Liquidity risk is 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 Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, non-convertible debentures, commercial papers which carry no/low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

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. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to market risk primarily related to foreign exchange rate risk. Thus, the Company exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company uses derivatives to manage market risk. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.

Currency risk

The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate in the future. Consequently, the Company uses both derivative instruments, i.e., foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.

The risk estimates provided assume a change of 100 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Commodity rate risk

The Company's operating activities involve purchase and sale of Active Pharmaceutical Ingredients (API), whose prices are exposed to the risk of fluctuation over short periods of time. Commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As of 31.03.2026 and 31.03.2025 the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

55. CAPITAL MANAGEMENT:

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

The Company monitors capital using a ratio of 'adjusted net debt' to 'total equity'. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents, other bank balances and current investments.

56. HEDGE ACCOUNTING:

The Company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

The forward exchange forward contracts are denominated in the same currency as the highly probable forecast sales, therefore the hedge ratio is 1:1. These contracts have a maturity of 12-24 months from the reporting date. The Company's policy is for the critical terms of the forward exchange contracts to align with the hedged item.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Company assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in the cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, changes in timing of the hedged transactions is the main source of hedge ineffectiveness.

68. DONATIONS UNDER NOTE 34 INCLUDES DONATIONS FOR POLITICAL PURPOSES

During the current year the Company has not donated any amount for political purpose for the year ended 31.03.2026 (31.03.2025 to ? Nil).

69. OTHER STATUTORY INFORMATION

(a) The Company has not entered into any transactions with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 for the year ended 31.03.2026 and 31.03.2025.

(b) 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. No trade or other receivable are due from directors of the company either severally or jointly with any other person.

(c) The Company has not traded or invested in Crypto Currency or Virtual Currency.

(d) The Company does not have any transaction not recorded in the books of account that has been surrendered or not disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 for the year ended 31.03.2026 and 31.03.2025.

(e) The Company has complied with number of layers prescribed under clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(f) There is no charge or satisfaction of charge which is yet to be registered with ROC beyond the statutory period.

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

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

(i) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. However , the Company, as a part of its treasury operations, invests/advances loans to fund the operations of its subsidiaries which have further utilised these funds for their general corporate purposes/ working capital, etc. within the consolidated group of the Company. These transactions are done on an arms length basis following a due approval process.

Further, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall,whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.