1. During the year ended March 31, 2024 additions to plant and equipments includes INR 1,437.82 lacs (March 31, 2023 : INR 434.34 lacs) on account of government assistance in the form of the duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme on import of plant and equipments. Closing balance of Capital work-inprogress as at March 31, 2024 include INR 524.27 lacs (as at March 31, 2023 : INR 1,678.45 lacs) for this benefit.

2. Capital work in progress as at March 31, 2024 includes assets under construction at various plants, head office and production lines which are pending installation. There are no projects which have either exceeds their budget or whose timelines have been deferred.

3. Disclosure of contractual commitments for the acquisition of property, plant and equipment has been provided in note 35.

4. The Company undisputedly possesses the title deeds for all immovable properties held by the Company, presented under 'Freehold land' and 'Buildings' in the above schedule.

5. Transfer represents assets capitalised from capital work-in-progress.

Investment property represents, land and building in Uttarakhand. The said premise is held to earn rentals and capital appreciation. Fair Value Hierarchy

The Company has no restrictions on the realisability of its investment property and no contractual obligation to purchase, construct or develop or for repair & maintenance.

Description of Valuation Technique used:

The Company obtains independent valuations of its investment properties as at the year end. The fair value of the investment properties have been derived using the Direct Comparison Method. The direct comparison method involves a comparison of the investment properties to similar properties that have actually been sold on arms-length basis or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment properties; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment properties.

These valuations are based on valuations performed by an accredited independent valuer who is a specialist in valuing these types of investment properties and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. A valuation model in accordance with that recommended by the International Valuation Standards Committee has been applied.

Sensitivity analysis of the investment property fair value assumptions

Further the Company has performed sensitivity analysis on the assumptions used by the valuer and ensured that the valuation of investment property is appropriate.

The Company undisputedly possesses the title deeds for all properties held by the Company, presented under 'freehold land and Building' in the above schedule.

1. There are no projects as intangible assets under development as at March 31, 2024 and March 31, 2023, whose completion is overdue or cost of which has exceeded in comparison to its original plan.

2. Intangible assets under development as at March 31, 2024 and March 31, 2023 includes software's being developed internally.

3. Transfer represents assets capitalised from intangible assets under development.

6 Right-of-use assets

a) This note provide information for leases where the Company is a lessee. The Company leases various offices, warehouse and has taken Land on long term lease from government authorities ranging from 66 to 99 years. The leases for offices and warehouses are typically for 5 to 6 years with mutually exercisable extension option at the end of term.

f) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

g) The Company has applied a single discount rate to a portfolio of leases of a similar assets in similar economic environment with similar end date.

a Capital contribution in Lifestar Pharma LLC has been contributed solely (i.e. 100%) by the Company. In terms of agreement, the non-controlling interest of 10% is restricted to profit sharing only subject to complete repayment of 100 % capital contribution made by Mankind Pharma Limited.

b During the previous year, the wholly owned subsidiary Company, JPR Labs Private Limited converted loan advanced amounting to INR 5,000 lacs to 91,97,940 equity shares of INR 10 each vide resolution of Board of Directors of the Company dated March 17, 2023 and resolution of Board of Directors of subsidiary Company dated March 18, 2023.

c The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares of INR 10 each carrying coupon of 0.10% per annum issued by its wholly owned subsidiary i.e. Jaspack Industries Private Limited

(‘Jaspack’). Such shares shall be optionally convertible to the equity shares at the option of the shareholders at the end of one year, unless decided by the Board of Directors of the Jaspack to convert at an early date from the date of allotment. At the time of conversion, every one (1) preference share of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Jaspack. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares will be upto March 27, 2035. The preference shares can be redeemed at face value of INR 10/- per share at any point of time.

d The Company had subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mahananda Spa and Resorts Private Limited (‘Mahananda’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Mahananda, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Mahananda on the date of redemption or Issue price of OCNRPS i.e. INR. 10/- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to September 30, 2038.

e The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- with a premium of INR 466.41/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Prolijune Life science Private Limited (‘Prolijune’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Prolijune, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Prolijune on the date of redemption or Issue price of OCNRPS i.e. INR 476.41 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to September 30, 2038.

f The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- with a premium of INR 225/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. JPR Labs Private Limited (‘JPR’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of JPR, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of JPR on the date of redemption or Issue price of OCNRPS i.e. INR 235 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to September 30, 2038.

g The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Appian Properties Private Limited (‘Appian’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Appian, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Appian on the date of redemption or Issue price of OCNRPS i.e. INR 10 /- for each OCNRPS. The tenure of Optionally Convertible NonCumulative Redeemable Preference Shares shall be up to September 30, 2038.

h The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Prime Labs Private Limited (‘Prime Labs’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Prime Labs, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Prime Labs on the date of redemption or Issue price of OCNRPS i.e. INR 10 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to March 31, 2041.

i The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Life

Sciences Private Limited (‘Life Science’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Life Science, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Life Science on the date of redemption or Issue price of OCNRPS i.e. INR 10 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to November 30, 2041.

j The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Agritech Private Limited (‘Agritech’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Life Science, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Life Science on the date of redemption or Issue price of OCNRPS i.e. INR 10 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to September 30, 2042.

k The Company has subscribed to Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10/- each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Consumer Healthcare Private Limited (‘Consumer’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10/- each, will be entitled to one (1) equity share of face value of INR 10/- each of Life Science, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Life Science on the date of redemption or Issue price of OCNRPS i.e. INR 10 /- for each OCNRPS. The tenure of Optionally Convertible Non-Cumulative Redeemable Preference Shares shall be up to January 30, 2042.

l During the current year, the Company has subscribed to 13,497 (March 31, 2023: 13,334) equity shares of face value GBP 0.01 each at an average issue price of GBP 222.26 (March 31, 2023: GBP 150) per share issued by Actimed Therapeutics Limited.

m Investment in partnership firms are measured at cost, and are shown as net of contribution, drawings and share of profit/ loss for the respective year.

n Following are the details of investments in partnership firms disclosing their capital and share of profit/ (loss) as at March 31, 2024 and March 31, 2023.

o Impairment of investments

The Company has performed a detailed analysis to identify indicators of impairment in respect of its investment portfolio considering internal and external factors in accordance with Ind-AS 36 - Impairment of assets. The Company has allocated investments wherever indicators exist to its respective Cash Generating Unit (CGU) i.e. Pharmaceutical and healthcare products, Real estate and hospitality and performed impairment test to ascertain the recoverable amount. The recoverable amount is determined either based on value in use calculation or net selling price.

In respect of pharmaceutical CGU and one of the investments in hospitality CGU, management calculates value in use using a discounted cash flow method. The discounted cash flow calculations uses management assumptions and pre tax cash flow projections based on financed budgets approved by respective entities management covering a 5 to 8 years period. Cash flow projection beyond 5 to 8 years time period are extrapolated using the estimated growth rates which is consistent with forecasts included in industry reports specific to industry in which CGU operates. Management has determined following assumptions for impairment testing of investments in pharmaceutical CGU as stated below.

In respect rest of real estate and hospitality CGU, the recoverable amount is calculated using the Direct Comparison Method. The fair value of investments has been determined by Government approved valuer. The direct comparison approach involves a comparison of the properties to similar properties that have actually been sold in arms-length distance from properties or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the properties; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for properties. The fair value has been determined by Government approved valuer. The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data. All resulting fair value estimates are included in level 3. In respect of investment in real estate and hospitality, management has considered their fair value considering the Direct comparison method.

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The calculations performed indicate that there is impairment of investments in some investments in real estate sector, hospitality sector and few pharma and pharma packing investments. Management has performed a sensitivity analysis with respect to changes in assumptions for assessment of value-in-use of Investments. Based on this analysis, management believes that adequate headroom is available and change in any of above assumption would not cause any material possible change in carrying value of unit's CGU over and above its recoverable amount, other than those already accounted.

Sensitivity analysis of assumptions

The Company has performed sensitivity analysis on the key assumptions by /- 2% for each of the assumptions used by the valuer and ensured that the valuation is appropriate and there is no further impairment.

Notes:

a Bank deposits are lien marked with banks and are issued to various government authorities/ institutions as margin/ deposits for performance guarantee.

b During the previous year ended March 31, 2023, the Company had incurred share issue expenses in connection with proposed public offer of equity shares amounting INR 4,043.58 lacs. In accordance with the Companies Act, 2013 (“the Act”) and also as per the Offer Agreement entered between the Company and the selling shareholders, the selling shareholders shall reimburse the share issue expenses in proportion to the respective shares offered for sale. Accordingly, the Company has recovered the expenses incurred in connection with the Issue on completion of Initial Public Offer (IPO) except amounting to INR 291.71 Lacs which are yet to be settled with the selling shareholders on account of IPO expenses and is held in share escrow account. The entire amount has been disclosed under this head.

a. Inventory write downs are recognised, considering the nature of inventory, estimated shelf life, ageing of inventory and actual scrapping of inventory as well as provisioning policy of the Company. Write downs of inventories amounted to INR 10,875.86 lacs (March 31, 2023: INR 12,787.52 lacs). These written down were included in the cost of raw material and components consumed and changes in inventories of finished goods, work in progress and stock in trade.

a. The Company has a property at Gurugram which is held for sale as the Company has entered into an agreement with the third party for sale of such property. Accordingly, the same has been recognised as held for sale and measured in accordance with Ind-AS 105 “Non Current Assets Held For Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The Company expects to complete the sale by September 30, 2024.

b. The Company had a Land at Meerut, which is held for sale as the Company has entered into an agreement with the third party for sale. Accordingly, the same has been recognised as held for sale as at March 31, 2023, and measured in accordance with Ind-AS 105 “Non Current Assets Held For Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The said land has been sold during the current year.

a. The average credit period to domestic customers ranges upto 21 days and to export customers upto 180 days. Our credit terms for government institutions are ranging from 90 to 120 days. No interest is charged on trade receivables upto the due date from the date of the invoice.

b. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on historical credit loss experience and adjusted for forward looking information.

c. No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member apart from those mentioned below (refer note 41).

a. Bank deposits includes interest accrued and not due on deposit account with banks amounting to INR 1,618.29 lacs and INR 74.58 lacs as at March 31, 2024 and as at March 31, 2023 respectively.

b. Short-term deposits are made of varying periods between 3 to 12 months depending on the cash requirements of the Company and earn interest at the respective short-term deposits rates.

c. Fixed deposits are lien marked with banks issued to various government authorities/ institutions as margin/ deposits for performance guarantee.

a. The loans classified as current are repayable on demand and management expected to realise within next financial year.

b. Loans are non-derivative financial assets which generate a fixed interest income @ 7.25% p.a. (March 31, 2023 : Nil).

Notes:

(i) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of INR 1 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Cairnhill CIPEF Limited has pursuant to share purchase agreement dated March 31, 2023 (“SPA”) transferred 1,39,24,448 equity shares to Hema CIPEF (I) Limited, which at the time of entering into the SPA was an affiliate (as defined under the Shareholding Agreement (“SHA”) dated April 06, 2018, amended from time to time) of Cairnhill CIPEF Limited. The said equity shares were transferred on April 6, 2023.

Cairnhill CGPE Limited has pursuant to share purchase agreement dated March 31, 2023 (“SPA”) transferred 5,97,879 and 15,01,211 equity shares to Hema CIPEF (I) Limited and Hema CGPE (I) Limited, respectively, each of which at the time of entering into the SPA was an affiliate (as defined under the SHA) of Cairnhill CGPE Limited, respectively. The said equity shares were transferred on April 6, 2023.

(iv) Authorised share capital has been increased by 35,00,000 shares of INR 1 each vide NCLT order for merger dated March 02, 2023 and supplement order dated March 21, 2023.

Under the erstwhile Companies Act 1956, General Reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to General Reserve has been withdrawn. However, the amount previously transferred to General Reserve can be utilised only in accordance with provisions of the Companies Act, 2013.

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

The amount that can be distributed by the Company as dividends to its equity shareholders, is determined based on the requirements of Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.

For the year ended March 31,2024, quarterly returns or statements of current assets filed by the Company with banks is in agreement with the books of accounts. The company is yet to file quarterly return or statement for the quarter ended March 31, 2024. This does not have any impact on any debt covenants.

For the year ended March 31,2023, quarterly returns or statements of current assets filed by the Company with banks is in agreement with the books of accounts except to the following on account of variance of entries posted in routine book closure process which is normally concluded post filing of statements with the banks and reporting made in respect of select general ledger accounts instead of all accounts considered as per financial statement classification. This does not have any impact on any debt covenants.

a. Deferred tax assets and deferred tax liabilities are being offset as they relate to taxes on income levied by the same governing taxation laws.

b. The Company has not created deferred tax on impairment loss of non-current financial assets (investments, doubtful capital advances and loans aggregating to INR 29,015.47 lacs as at March 31, 2024 and INR 25,316.30 lacs as at March 31, 2023) as the Company does not expect taxable capital gain in future against which such deferred tax assets can be realised. Had the Company created deferred tax on the same, the profit and retained earnings would have been higher by INR 6,759.44 lacs as at March 31, 2024 and INR 5,897.69 lacs as at March 31, 2023.

The average credit period to domestic customers ranges upto 21 days and to export customers upto 180 days. Our credit terms for government institutions are typically ranging from 90 to 120 days. No interest is charged on trade receivables upto the due date from the date of the invoice.

Contract liabilities consist of short-term advances received against supply of goods to customer. Such advances are adjusted against supply of goods within a range of 3 months from the reporting date and the revenue is recognised out of the contract liabilities.

(d) Performance obligations

Sales of goods: The performance obligation is satisfied when control of the goods are transferred to the customers based on the contractual terms. Payment terms with customers vary depending upon the contractual terms of each contract.

Sales of services: The performance obligation in respect of professional services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of services.

(c) Other Litigations

There are some litigations filed against the Company on account of design, trademarks and patent infringements, labour matters etc. relating to conduct of its business. These cases are at various stage of proceedings and the extent of claim or damages is indeterminate at this stage.

The Company is contesting these cases and based on views of internal legal counsel and in consultation with external legal counsel representing the Company, it believes there is no liability which would devolve over the Company in respect of such cases and believes its position will be upheld in the jurisdictional authorities as at close of respective financial year. The Company has also filed certain cases in nature of recovery suit, cases under Section 138 of the Negotiable Instrument Act, 1881, trademark infringement etc. The Company is pursuing these cases and have made adequate accrual for allowance for doubtful debts in respect of such cases, wherever considered necessary.

(d) During the year, the Income Tax Department (‘the department’) had conducted a search under section 132 of the Income Tax Act, 1961 (‘the Act’) at Company’s registered office, corporate office, few of its manufacturing locations, residence of few of its employees/key managerial personnel, other premises and few of its group entities. During the search proceedings, the Company provided necessary information and responses to the department. Also, the department has taken certain documents, data backups and other information for further investigation. Subsequently, the department has issued notices under section 148 of the Act which requires the Company to furnish income tax returns in respect of Assessment Years for which notices have been issued.

The Company has assessed its income tax returns previously filed in respect of all such assessment years and is in the process of complying with notices issued under section 148 of the Act including filing of income tax returns or submission of computation of income as applicable. Considering the income tax returns / computation of income in respect of requisite assessment years and based on the assessment made by the management and its tax advisor, the management is of the view that no material adjustment is envisaged at this stage to these standalone financial statements.

Notes

(i) Claims / suits filed against the Company not acknowledged as debts which represents various legal cases filed against the company. The Company has disclaimed the liability and defending the action. The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and accordingly no provision for any liability has been made in the financial statements.

(ii) The Company is contesting the demands of income tax, sales tax and Goods and Service tax, and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company financial position and results of operations.

(iii) Contingencies in respect of input credit availed under GST relates to input availed by the Company in respect of earlier years paid to GST authorities, consequent to audit by the office of the commissioner central GST audit, Gurugram which is subject to assessment. The Company is pursuing these and as advised by its legal counsel believes its position would be accepted by the authorities and accordingly, no provision is required to be accrued in the financial statements.

C. Undrawn committed borrowing facility

(i) The Company has a secured working capital demand loan facility from Citibank N.A. amounting to INR 29,500 lacs (March 31, 2023: INR 29,500 lacs). This loan is secured by way of first pari passu hypothecation charge on current assets (stocks and book debts & receivables), both present and future of the Company. An amount of INR 29,500 lacs (March 31, 2023: INR 29,500 lacs) remains undrawn as at the year end.

(ii) The Company has a secured working capital demand loan facility of INR 25,000 lacs (March 31, 2023: INR

25.000 lacs) from HDFC bank. This loan is secured by way of first pari passu charge on stock in trade and book debts of the Company. An amount of INR 25,000 lacs (March 31, 2023: INR 25,000 lacs) remains undrawn as at the year end.

(iii) The Company has a secured working capital demand loan facility of INR 17,000 lacs (March 31, 2023: INR

17.000 lacs) from Kotak Mahindra bank. This loan is secured by the way of first pari-passu hypothecation charge on all existing and future current assets of the Company. An amount of INR 17,000 lacs (March 31, 2023: INR

17.000 lacs) remains undrawn during the year end.

(iv) The Company had a secured working capital demand loan facility of INR Nil (March 31, 2023: INR 10,000 lacs) from HDFC bank. An amount of INR Nil (March 31, 2023: INR 10,000 lacs) remains undrawn as at the year end. This facility has been closed during the year.

(v) The Company has a secured (unsecured for the year ended March 31, 2023) overdraft facility of INR 18,000 lacs from ICICI Bank (March 31, 2023: INR 18,000 lacs) for working capital requirement. This loan is secured by way of first pari passu hypothecation charge on all current assets, both present and future of the Company. An amount of INR 18,000 lacs (March 31, 2023: INR 18,000 lacs) remains undrawn during the year end.

(vi) The Company has availed working capital facility from HDFC Bank amounting to INR 1,000 lacs (March 31, 2023: INR 1,000 lacs) and secured by way of exclusive first charge on the current assets of the Company. An amount of INR 1,000 lacs (March 31, 2023: INR 1,000 lacs) remains undrawn as at year end.

There are no restrictions with regard to above undrawan borrowing facility as at the end of the reporting period and prior period.

D. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

36 Government Grant

a. Deferred government grant includes assistance in the form of duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme on import of property, plant and equipment accounted for as government grant and being amortised over the period of contractual obligation.

37 Gratuity and other post-employment benefit plans

Disclosures pursuant to Ind AS - 19 "Employee Benefits" are given below :

a. Contribution to Defined Contribution Plan, recognised as expense for the year is as under:

The Company’s contribution to the Employees Provident Fund is deposited with the Regional Provident Fund Commissioner for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

The Company recognised INR 8,711.49 lacs (March 31, 2023 : INR 7,758.78 lacs) towards Provident Fund, Employee State Insurance, National Pension Scheme and others contribution in the statement of profit and loss. The contribution payable to the plan by the Company is at the rate specified in rules to the scheme.

Hon'ble Supreme Court of India vide its judgement dated February 28, 2019 on Provident Fund required the Companies to include allowances for the purpose of PF contribution. Subsequently, the Company vide assessment letter no. 28212 dated 04 August 2020 received from Employees Provident Fund Organisation wherein the provident fund department has completed their assessment for FY 2015-16 to FY 2019-20. Hence, the Company is of the view, that there is no further liability on account of the Judgement.

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain sections of the Code came into effect on May 3, 2023. However, the final rules/interpretation have not yet been issued. Based on a preliminary assessment, the Company believes the impact of the change will not be significant.

b. Defined benefit plan - Gratuity plan

In accordance with the Payment of Gratuity Act of 1972, the Company contributes to a defined benefit plan ("the Gratuity Plan"). The gratuity plan provides a lump sum payment to vested employees at retirement, withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary) for each completed year of service subject to completion of four years and two hundred and forty days in service.

Based on actuarial valuations conducted as at year end, a provision is recognised in full for the benefit obligation over and above the funds held in the Gratuity Plan.

In accordance with Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan ("the gratuity plan") run by Mankind Pharma (P) Limited Employees Group Gratuity Trust, Lifestar Pharma Private Limited Employees' Group Gratuity Assurance Scheme and Magnet Labs Private Limited Employees' Group Gratuity Assurance Scheme ("the trusts"). The trusts has taken a Group Gratuity Scheme which is administered by Life Insurance Corporation ("LIC") of India and Bajaj Allianz Life Insurance Company Limited.

Notes

1 The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

2 The expected return is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

3 The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The plan assets of the Company managed through trusts namely Mankind Pharma (P) Limited Employees Group Gratuity Trust, Lifestar Pharma Private Limited Employees' Group Gratuity Assurance Scheme and Magnet Labs Private Limited Employees' Group Gratuity Assurance Scheme ("the trusts"). The trusts have taken Group Gratuity Scheme which is administered by Life Insurance Corporation ("LIC") of India and Bajaj Allianz Life Insurance Company Limited. The plan assets of the Company are managed through the trusts. The details of investments relating to these assets are not shown by them. Hence, the composition of each major category of plan assets, the percentage or amount that each major category constitutes to the fair value of the total plan assets has not been disclosed.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit liability recognised in the Balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

38 Capital Management

For the purposes of Company's capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company's capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2024 and March 31, 2023. Capital gearing ratio is net debt including lease liability divided by total capital plus net debt and Net debt is calculated as loans and borrowings less cash and cash equivalent. The Company’s policy is to keep the gearing ratio below 10%.

39 Financial Instruments

A. Financial risk management objective and policies

The Company’s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments in mutual funds, trade and other receivables and cash and cash equivalents that are derived directly from its operations.

The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company's senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company's senior management that the Company's financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

B. Fair value measurements

The management assessed that cash and cash equivalents, other bank balances, trade receivables, loans, other current financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the other financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

1) The fair value of unquoted instruments is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

3) 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).

Note:

i. Investment in mutual funds traded in active markets are determined by reference to quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house.

ii. In the absence of observable inputs to measure fair value the assets and liabilities have been classified as level 3. The Company has not given further disclosures since the amount involved is not material.

The management considers that the carrying amounts of financial assets and financial liabilities having short term maturities recognised in the financial statement approximates their fair values.

Risk management objectives

Risk management framework

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

- Market risk

- Liquidity risk

- Credit risk

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

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 ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

a) Market risk :

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2024 and March 31, 2023.

(i) Price risk

The Company manages surplus funds through investments in mutual fund plans. The NAV declared by Asset Management Companies (AMC) has generally remained constant on the mutual fund plans taken by the Company. However, if the NAV of the fund is increased/decreased by 5%, the sensitivity analysis has been mentioned below:

(ii) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR, JPY, NPR, AED, CHF, GBP and SGD exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(iii) Interest Rate Risk

As at March 31, 2024 and March 31, 2023, the Company has no outstanding borrowings. Hence the Company is not exposed to interest rate risk.

(iv) Commodity Price Risk

Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices may fluctuate significantly over short periods of time. The prices of the Company’s raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Company’s cost of revenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. As of reporting period end, the Company has not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

b) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company's objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, liquid investments in mutual funds and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect

to its debt and concluded it to be low. The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening our balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

c) Credit risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

40 Segment Information

40.1 Description of Segment and principal activities

As per Ind AS-108, "Operating Segment" (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act ) the Company’s chief operating decision maker, i.e. Managing Director (‘CODM’) has identified pharmaceuticals and other related products as the reportable segments.

The Company is engaged in manufacturing and trading of pharmaceuticals and healthcare products, Accordingly, the Company has only one reportable segment ‘Pharmaceuticals’ and disclosures as per Ind AS 108 “Operating Segments” are not applicable.

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year end are unsecured and interest free except for the loans given which carry interest at arms length. The settlement for these balances occurs in cash. There have been no guarantees provided or received for any related party receivables or payables other than disclosed above. Further, the Company has not recorded any impairment of receivables relating to amounts owed by related parties other than those disclosed above. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

42 Informations as required under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) are given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

45 Earnings per share

Basic earnings per share has been computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the year. Diluted earnings per share has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year.

Note: (a) The total CSR Obligation of the Company for the financial year 2022-23, is arrived at, by adding up the average net profits of the Company and that of the erstwhile wholly-owned subsidiaries of the Company; i.e. Lifestar Pharma Private Limited (“Lifestar”) and Magnet Labs Private Limited (“Magnet”), which were merged with the Mankind Pharma Limited w.e.f. April 01, 2020, Total merged CSR Obligation for the financial year 2022-23, of INR 3,278.46 was arrived at by adding up the CSR Obligation of the Company (INR 3,086.01 lacs), Lifestar (INR 141.24 lacs) and Magnet (INR 51.21 lacs).

(b) Excess of INR 99.56 lacs for the financial year 2022-23, is on account of CSR Obligations of the Company i.e. Mankind Pharma Limited. The shortfalls in CSR expenditure is in respect of entities merged during the previous financial year ended March 31, 2023, Lifestar (INR 37.43 lacs) and Magnet (INR 1.21 lacs) was deposited by the Company in the Prime Minister’s National Relief Fund in accordance with the provisions specified in the Companies Act, 2013.

47 There were no amounts which were required to be transferred to the investor education and protection fund by the Company.

48 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income- tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the year and expects such records to be in existence latest by such date as required under the law. The management is of the opinion that its transactions covered under transfer pricing regulations are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

49 During the year, the Company has capitalised following preoperative directly relatable to the cost of property, plant and equipment being expenses related to projects and developments, trial run. Consequently, expenses disclosed under the respective heads are net of amounts capitalised by the Company.

52 Employee Share Based Payment

Employee Stock Option Scheme “ESOP-2022” was approved by our Board of Directors in their meeting held on July 19, 2022 and by our shareholders in their meeting dated August 9, 2022 respectively. Under ESOP-2022, Nomination and Remuneration Committee is authorised to grant 81,75,274 options to eligible employees in one or more tranches. Options granted under ESOP-2022 shall

not vest earlier than a minimum vesting period of one year and not later than a maximum vesting period of four years from date of grant. The exercise period in respect of vested options shall be subject to maximum period of five years commencing from the date of vesting. The options granted under ESOP-2022 carry no rights to dividends and no voting rights till the date of exercise.

The fair value of the share options is estimated at the grant date using Black- Scholes Model, taking into account the terms and conditions upon which the share options were granted.

Employee Stock Option Scheme “ESOP-2022” was approved by our Board of Directors in their meeting held on July 19, 2022 and by our shareholders in their meeting dated August 9, 2022 respectively. Under ESOP-2022, Nomination and Remuneration Committee is authorised to grant 81,75,274 options to eligible employees in one or more tranches. Options granted under ESOP-2022 shall not vest earlier than a minimum vesting period of one year and not later than a maximum vesting period of four years from date of grant. The exercise period in respect of vested options shall be subject to maximum period of five years commencing from the date of vesting. The options granted under ESOP-2022 carry no rights to dividends and no voting rights till the date of exercise.

The fair value of the share options is estimated at the grant date using Black- Scholes Model, taking into account the terms and conditions upon which the share options were granted.

The Company has recognised an expense of INR 1,981.93 lacs (March 31, 2023 : INR 5.91 lacs) in accordance with Ind AS 102 “Share Based Payments”. The carrying amount of Employee stock options outstanding reserve as at March 31, 2024 is INR 2,324.56 lacs (March 31, 2023: INR 5.91 lacs) for ESOP granted to the employees of the Company and subsidiary Companies.

There were no cancellation or modification to the awards in the year ended March 31, 2024 or March 31, 2023.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The volatility is based on annualised standard deviation of the continuously compounded rates of return based on the peer companies and competitive stocks over a period of time. The Company has determined the market price on grant date based on latest equity valuation report available with the Company preceding the grant date.

53 Other Information

(i) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year

(iii) The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(iv) The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(v) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

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

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

(viii) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

54 The figures have been rounded off to the nearest lacs of rupees up to two decimal places. The figure 0.00 wherever stated represents value less than INR 500/-.

55 During the year ended March 31, 2024, the Company has completed its Initial Public Offer (IPO) of 4,00,58,844 equity shares of face value of INR 1 each at and issue price of INR 1,080 per share. The issue comprised of 100% offer for sale aggregating to INR 4,32,635.52 lacs. Pursuant to the IPO, the equity shares of the Company got listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on May 9, 2023.

56 The Board of directors in its meeting dated October 31, 2023 approved a Scheme of Amalgamation (‘Scheme’), among the Company and its wholly owned subsidiary companies, namely Shree Jee Laboratory Private Limited, JPR Labs Private Limited and Jaspack Industries Private Limited, The Scheme is subject to approval of National Company Law Tribunal (NCLT). The effect of the scheme would be recognised on receipt of the approvals in accordance with Appendix “C” of Ind AS 103 “Business Combination”.

57 The Board of directors at its meeting held on April 02, 2024 has considered and approved the transfer of the Over the Counter (“OTC”) Business of the Company to its Wholly Owned Subsidiary Company, Mankind Consumer Products Private Limited as a going concern on a slump sale basis through a Business Transfer Agreement (“BTA”), The transaction will be effective on or before October 01, 2024 or such other date as may be mutually agreed between the parties, subject to customary closing conditions.

58 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled for direct changes to data for users with certain privileged access rights and also for certain changes made using privileged/ administrative access right. Further, in respect of software used in maintaining payroll records which operated and maintained by a third party service provider, in absence of service organisation controls report in respect of audit trail, management is unable to determine whether audit trail feature of the underlying database was enabled and operated throughout the year. Further no instance of audit trail feature being tampered with was noted in respect of accounting software except that in absence of service organisation controls report, we are unable to assess the same in respect of the software used to maintain payroll records.

59 Note 1 to 58 form integral part of the standalone balance sheet and standalone statement of profit and loss.