p| Provisions, contingent liabilities and contingent asset
Provisions
Provisions are recognised when the Company has a oresenl obligation (legal or constructive) as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation.
Provisions are discounted, if the effect of Ihe lime value of money Is material, using pre-tax rales that reflects the risks specific lo Ihe
liability. When discounting ]& used, an increase In the provisions due to Ihe passage of time Is recognised as finance cost. These
provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Necessary provision for doubtful debts, claims etc., are made, if realisation of money is doubtful in the judgement of ihe management
Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will lie confirmed by the occurrence or non¬
occurrence of one or more uncertain future even Is beyond the conlrol of the company or a present obligation Itial; is nul recognised
because it is not probable that an outflow of resources wilt be required to settle the obligation A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably Contingent liabilities are
disclosed separately Show cause notices issued by vanous Government authorities are considered for evaluation of contingent liabilities
only when converted into demand.
Contingent assets
Where an inflow of economic benefits is probable the Company discloses a brief description of the nature of the contingent assets at the
end of (he reporting period, and. where practicable an estimate of their financial effect Contlngenl assels are disclosed hut not
recognised in the financial statements.
q) Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks Cash equivalents are short-term balances with original maturity of less
than 3 months, highly liquid investments that are readily convertible into cash, which are subject lo insignificant risk of changes in value.
r) Cash Flow Statement
Cash flows are presented using indirect method, whereby profit t (lossi before tax is adjusted for tile effects of transactions of non-cash
nalure and any deferrals or accruals of past or future cash receipts or payments..
Sank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand
form an integral part of an entity's cash management, bank overdrafts are included as a component of cash and cash equivalents for the
purpose of Cash flow statement.
s) Non current assets held for safe and disposal groups
’he Company classifies a non-current asset (or disposal group) as held for saie if its carrying amount will be recovered pnncipally through
a sale transaction rather than through continuing use. Immediately Before Ihe initial classification of the asset (or disposal group) as held
for sale. Ihe carrying amounts of the asset (or all the assets and liabilities in the group! shall be measured: m accordance with applicable
Ind ASs
The Company measures a non-current asset (or disposal group) classified as held for sale at the lower of Its carrying amount and fa<r
value less costs to sell. The Company does not depreciate (or amortise) a non-current asset while it is classified as hetd for sale or while it
is part of a disposal group classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale shall continue to be recognised.
t) Earnings per share
’he basic earnings per share are computed by dividing the net profit for Ihe penoa attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic
EPS and also weighted average number of equity shares lhat could have been issued upon conversion of ali dilutive potential equity
shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date Dilutive
potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive
equity shares are adjusted for bonus shares, as appropriate,
" The Company has taken certain lands on lease for its operations In respect of which the tease agreement expired before the date of commencement of
the Corporate Insolvency Resolution Process As pari of the right to review the existing agreements, the Company has made a detailed assessment of
the markel rent for the property and the marvel value of the properly lor outright purchase Since the present rent as per erstwhile 'ease agreements is
significantly high considering the market value of She property itself, the Company were in talks with the lessor for renewal of the tease with lower rent or
for outright purchase of the property as part of the implementation of the resolution plan.
On 3th April 2025. [he company entered into a Joint Memo of Compromise with the Lessor and have since paid the selLlement amount of Rs.762 lakes
to settle all disputes pertaining to the post CIRP period from 1st ApiiiN2020 to 31 st December 2024. For subsequent period also the Company has
entered into a new Lease agreement. The said Liability is fully provided for in these financial statements
However, wr.t the period prior lo 31st March 2020 (Pre-CIRP period). the Lessor continues to dispute and claim the Lease Real However, the
management is of the opinion that based on Ihe NCLT approved Resolution Plan the Company would not be liable for any claims pertaining to the pre
CIRP period.
# Tax demand from Electricity board is under dispute and considered as contingent Lability from 01 04.2020
45 Operating Segments
The operations of the Company falls under a single operating segment i.e., Tharmateuiicals' in accordance with ind AS 108 "Operating Segments" and
hence no segment reporting is applicable. Since ihe Company has also laid down consolidated financial statement, the disclosures required as per Ind
AS 108 is given as pan of notes on accounts of the consolidated financial statements.
48 Terms and conditions of borrowings
A) Long term borrowings
1) Long term borrowings * 0% Optionally Convertible Debentures
During the year ended March 31, 2020, the Company has issued 1-1.300 0% Optionally Convertible Debentures (OCD) of Rs 1,00.000 each In case, the
OCD holders exercise their option to convert the same, then the said conversion shall happen only on the basis of face value of each of the GCD and no
interest shall be payable to the OCD holders. However, if the OCD holders opt not 10 exercise their opt-on for conversion, then the OCD holders shall be
entitled to redemption premium of atfeasi 11 % IRR on annual basis on the amount ol the said OCDs or such higher amounl as the Board decides after
considering the market price of shares of the Company however m any case, redemptfen premium shall not exceed beyond 18% JRR on an annual basis.
The said OCD. till the time It is not converted into equity shares, shall not be listed on any stock exchange In India and are permitted to be transferred only
with the permission of the Board of Erectors of the Company
5) Short term borrowings
Tne ca&h credit limits and working capital demand Scan with the banks are secured by
0 First Pari pasu charge by way of hypothecation over the entire current assets, bosh present and future.
it} Second pari passu charge on all movable fined assets by way of hypothecation of all movable fixed assets of the Company, both present and future
ii) Second pan passu charge by way of mortgage of land/ leasehold rights and all the buildings present and future of the Company.
rv} First pari passu charge over all the rights, titles, interests, benefits, claims and demand whatsoever of the Company and as amended varied or
supplemented from time to time.
v) First pan passu charge on all the tides, interests, benefits, claims and demand whatsoever of the Company, in any letter of credit, guarantee or
performance bond provided by any party to OPL. present or future.
vi} First pari passu cnarge on intangibles goodwill uncalfed capital preset and future
The present rate ol interest of the Working Capita credit facility availed from HDFC bank and Yes Bank ss ranging of fi.25% to 9.60% per annum
Financial risk management objectives
The treasury function provides services to the business, co-ordinates access 1o domestic and international financial markets monitors and manages the
financial risks relating to the operations through Internal risk reports which analyse exposures by degree and magnitude of n$k$ These risks intrude
market nsk (including currency nsk. interest rale nsk and other price risk) credil risk and liquidity nsk.
The Company seeks 10 minimise the effects of these risks by using natural hedging financial instruments and forward contracts to hedge risk exposures
The use of financial derivatives is governed by the Company's policies approved tiy ihe hoard of directors, which provide written prlntfjpfes on foreign
exchange risk, the use of financial derivatives, and Ihe investment of excess liquidity The Company does not enlei into or hade financial instruments,
including derivative financial instruments, lor speculative purposes.
Market risk
Market risk is the risk oi any loss in future earnings, ir> realizable f^tr values or m Tulare cash (lows that may result from a change in the price oi a
financial instrument The Company's activities expose n primarily to ihe financial risks of dhangesln foreign currency exchange rate^ end Interest rates
The Company activity manages its currency arid interest rale exposure through its finance division, wherever required to mitigate the fisl$6 from such
exposures.
Foreign currency risk management
The Company undertakes transactions do nominated in foreign currencies: consequenlly, exposures to exchange rate fluctuations arise The Company
actively manages its currency rate exposures through a cenhalised treasury division and uses natural hedging principles lo mitigate the risks from such
exposures.
Disclosure of hedged and unhedged foreign currency exposure
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the- end of the reporting period are as
follows:
Foreign currency sensitivity analysis
Movement in the functional currencies of the various operation* of ihe Company against major foreign currencies may imped foe Company's revenues
from its operations. Any weakening of the functional currency may impact the Company's cost of imports and cos I of borrowings and consequently may
increase the cost of financing the Company's capital expenditures. The foreign exchange rate sensitivity is calculated for each currency by aggregation
of the net foreign exchange rate exposure of a currency find a simultaneous parallel foreign exchange rates shift in Ihe foreign exchange rates of each
currency by 2%, which represents management's assessment of the reasonably possible change in foreign exchange rales The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjusts their translation atlhe period end for a 2% change in foreign
currency rales
In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because of the existing exchange earning
capacity of the company on account of rt& EOU status * Export oriented undertaking) and higher proportion of earnings in foreign exchange through
exports.
Interest rate risk management
The Company Is exposed to Interest rale risk because It borrows funds at both fixed and floating in teres! rales. The risk is managed by Ihe Company by
maintaining an appropriate mix between fixed and floating rale borrowings Hedging activities are evaluated regularly To align wiih interest rate views
and defined risk appetite, ensuring the mosl cost-effective hedging strategies are applied Further, in appropriate cases, Ihe Company also effects
tibgnges In the borrowing arrangements to convert floating in tore si rates to fixed interest rates,
Interest rote sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to interest rales for non-derivative instruments at the end of me reporting
period. For floating rate liabilities. Ihe analysis Is prepared assuming ihe amount of the liability outstanding at Ihe end of the reporting period was
oifislanding for ihe whole year A 25 basis point increase or grease ts useiJ when reporting interesi rate risk Infernally ta key management personnel
anti represents management's assessment of ihe reasonably possible change in interest rates.
If interest fates nad been 25 basis points higher/lower and all other variables were held constant, (he Company’s Profit/ [loss} for Ihe yeaf ended March
3"! 2025 would decrease/ increase by Rs. 10 44. lakhs [March 3’.. 2024 Rs.3.57 lakhs). Ttiis js mainly attributable to toe Company's exposure to
interes! rales Or its variable rate borrowing &.
Credit risk management
Credit risk arises when a customer or counterparty does not meet 4 s obligations under a customer t on l rad or financial mstrxjmeni leading ids financial
loss The Company is exposed to credit risk from its operating activities primarily trade receivables and from Us financing/ investing activities, including
deposits with banks and foreign exchange transactions The Company has no significant concentration of credit risk with any counterparty.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure The maximum exposure is the total o* the carrying amount of
balances with banks, short ierm deposits with banks trade receivables margin money and other financial assets excluding equity investments
(a) Trade Receivables
The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer fs defined Wherever the
Company assesses the credit risk as high, the exposure is backed by either bank guarantee/letter of credit or security deposits
The Company does not have higher concentration Of credif risks lo a single customer As per Simplified approach trie Company makes provision of
expected credit losses on trade receivables using a provision matrix to mitigate the nsk of dateult in payments and makes appropriate provision at each
reporting ctefe Wherever outstanding is for longer period and involves higher risk.
fb) Investments, Cash and Cash Equivalents and Bank Deposits
Credit Risk on cash and cash equivalents, deposits with the bankstfinancial institutions is generally law as the =aJd deposit? have been made with the
banks/financial Institutions who have been assigned high credit rating by international and domestic rating a gen ties.
Investments of surplus funds are made only with approved banksJ financial institutions/ Counterparty, investment primarily include bank deposits, etc
These bank deposits and counterparties have low credit risk The Company has standard operating procedures and investment policy ter deploy mem of
surplus liquidity which allows investment in bank deposit and restricts the exposure in equity markets
Offsetting related disclosures
Offsetting of cash and cash equivalents to borrowings as per Ihe bank agreement is availabFe only to Ihe bank in (he event of a default. Company does
not have the right to offsel in case of Ihe counter party's bankruptcy., therefore these disclosures are not required
Liquidity risk management
Liquidity risk refers to (he risk that Ihe Company cannoi meat its financial obligations. The objective of liquidity risk management is la maintain sufficieni
liquidity and ensure that Hinds are available for use as per requirements. The Company invests Its surplus funds to bank fixed deposits, which Carry
minimal mark to market risks. The Company also constantly monitors tending options available in the deb I and capital markets wilh a view to
maintaining financial flexibility
Liquidity tables
Tiit following tables detail the Company's remaining contractual maturity for its non-derivalive financial liabilities with agreed repayment periods The
tables have been drawn up based on the undiscounted cash flaws of financial liabilities based on the earliest dale on which Ihe Company can be
required !o pay
£1 Retirement benefit plans
Defined contribution plans
In accordance with Indian law, eligible employees of the Company are entitled to receive Benefits in respect of Graiuily fund a defined
contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'
salary. The contributions, as specified under Ihe law. are made to the Provident fund. Gratuity fund. Superannuation fund as weli as Employee
State Insurance Fund
The total expense recognised in profit or loss of Rs.419 93 Lakhs (for the year ended March 31, 2024: Rs 393 63 Lakhs] represents
contribution pad to these plans by Ihe Company at rates specified in the rules or the plan.
Defined benefit plans
(a) Gratuity
Gratuity is payable as per Payment of Gratuity Ad 1972 In terms of the same gratuity is computed by multiplying Iasi drawn salary ^baslc
salary including dearness Allowance if anyf by completed years of continuous service with part thereof in excess ot six months and again by
15/26. The Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on graiuity payable to an employee
on separation as may be prescribed under the Payment of Gratuity Act, 1972. from time to lime. However, in cases where an enterprise has
more favourable terms in this regard the same has been adopted.
(f) Proceedings under the Eenami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder
There are no proceedings initialed or are pending against the company for holding any benarni property under the BenamJ Transactions
(Prohibition) Ad, 1988 [45 of 1988) and rules made thereunder
(g) Sorrowings from banks
The Company is not declared as wilful defaulter by any bank or financial Institution or other lenders
(h) Relationship with Struck off Companies
The Company did not have any Iransac'ions with Companies struck off under Section 248 of Companies Act, .2018 or Section 580 of
Companies Act, 195G considering the information available with the Company
(i) Compliance with number of layers of companies
The Company is in compliance with the number of layers prescribed under clause (87) ot section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017
|1) Advance or loan or investment to intermediaries and receipt of funds from intermediaries
The company has not advanced or loaned or invested funds I either borrowed funds or share premium or any other sources or kind of
funds) to any othnr oersoms! or entlty(fes) including foreign entities [Intermediaries) with the undemanding (whether recorded in writing
or otherwise) that the Intermediary shall (i) directly or indirectly lend or invesl in other persons or entities identified in any manner
whatsoever by or on behalf of the company (Ultimate Beneficianesj or (si) provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.
The company has also not recewea any fund from any personal or entity^], including foreign entities [Funding Party] with the
understanding (whether recorded in writing or otherwise) thal the company shali (i) directly or mdireclly lend or invest in other persons or
entities identifies in any manner whatsoever by or on behalf of the Funding Party [Ultimate Beneficiaries] or (fl) provide any guarantee,
Security or Ihe like on behalf of the Ultimate Beneficiaries
(m) Undisclosed Income
The Company do not have any transaction which aro no; recorded in Ihe books of accounts that has been surrendered or disclosed as
income in the lax assessments under ihe Income Tax Act. 1961 during any of the years.
fn) The company does not hold any immovable property whose title deeds are not in the name of ihe company
|o) The company has not revalued any of its property, plan! and equipments and in tangible assets from registered valuers during the year.
(p) The company has not extended any loans or advances granted to promoters, directors. KMPs and rotated parties (as defined under Companies AcL
2013) either severally or jointly with any other person except as given below
56 The Company has submitted a pelican with lhe Hon'ble National Company Law Tribunal (KCLT), Chennai bench for amalgamation of its Holding
Company DhanuKa Laboratories Limited ('the Amalgamating Company"} with the Company in compliance with Section 230-232 and other relevanl
provisions of the Companies Act 2013 The scheme of amalgamation had been approved by the Board of Directors of the respective Companies
Further in compliance with the SEB! Listing Regulations and Master Circulars issued thereon the Company has obtained Observation Letter from
the BSE Limited and National Stock Exchange of India Limited ('stock exchanges" j giving No objection to the said amalgamation.
Further the Hon'ble NCLT have pronounced the order dated 29.04.2025 internal is. issuing directions for convening meetings of equity
shareholders of the Company and unsecured creditors of both Companies and dispensed off (he meetings of equity shareholders of tne
Amalgamating Company and secured creditors of both the Companies, considenng their respective consents to the Scheme already submilted
before the Hon'ble NCLT. Hie management of the respective Companies are inking steps to comply with :be said Order
57 Previous year figures have been regrouped or rearranged wherever considered necessary.
58 -'he 'inancial statements are approved and .adopted by Board of Directors of the Company in their meeting held on May 26, 2025.
As per our report of even date attached For and on behalf of the board
For Singhi & Co,,
Chartered Accouniams
Firm Registration No. 302049E
Sd /- Sttf- Sd
Sudesh Choraria Manish Dhanuka Mriduf Dhanuka
Pa riner Man aging D i recto r Wholeti me di rector
Membership No 204936 DIN: 0G23B79S DIN: 00199441
Sd/- Sd /-
Sunil Gupta Kapil Dayya
Chief Financial Officer Company Secretary
Place: Mumbai Pface Gurgaon
Date: May 26, 2025 Date: May 26. 2025
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