Nature of each reserve and surplus

Capital Reserve:-This Reserve repesents the difference between value of the net assets transferred to the Company in the course of business combinations and the consideration paid for such combinations earlier.

Securities Premium Account:- This Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.

Debenture Redemption Reserve:- This reserve is created out of the retained earnings for the amount of debentures to be redeemed, as per the provisions of Companies Act, 2013.

General reserve:- This Reserve is created by an appropriation from one component of equity to another, not being an item of other comprehensive income.

Employee Stock Option Outstanding:-This Reserve relates to stock options granted by the Company to employees. This Reserve is transferred to securities premium or retained earnings on exercise or cancellation of vested options.

Retained earnings:- This is net surplus or deficit in the statement of profit and loss.

Revaluation Surplus:- This reserve represents surplus on revaluation of Freehold & Leashold land. Amount equivalent to additional amortisation due to revaluation of leasehold land is transferred to retained earnings

The accompanying notes are an integral part of the standalone financial statements.

The carrying amounts of the trade receivables include receivables which are subject to factoring arrangement. Under this arrangement, the company has transferred the relevant receivables to the “Factor” in exchange for cash and is prevented from selling or pledging the reeceivables. However, the Company has retained late payment and credit risk. The Company therefore continues to recognise the transferred assets in thier entirety in its balance sheet. The amount repayable under the factoring agreement is presented as secured borrowing. The Company considers the held to collect business model to remain appropriate for these receivables and hence continues measuring them at amortised cost.

19.2 Terms/Rights attached to equity shares

The Company has only one class of equity shares with voting rights having a par value of ? 10 per share. The Company declares & pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders 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 numbers of equity shares held by the shareholders.

19.3 Outstanding Options to subscribe to equity shares

11,25,236 warrants of the face value of ? Nil have been allotted to the shareholders of Erstwhile PPIL as per the BIFR order. The warrant holders have the right to subscribe to one equity share of ? 10/- each at the premium of ? 125/- per share which is exercisable within five years from 27 June 2007,being the date of allotment of the warrants. Refer note 46a.

58,199 Zero Coupon Optionally Fully Convertible Debentures (OFCDs) of face value of ? 1,000/- each were allotted to the lenders of erstwhile PPIL pursuant to the order dated 24 April 2007 of Hon'ble BIFR. OFCD were convertible between 1 November 2008 and 30 April 2012 into its equity shares at a price of ? 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right. Refer note 46a.

19.7 The Company has neither alloted any shares as fully paid up pursuant to contract without payment being received in cash and by way of bonus shares nor bought back any shares during the period of five years preceding the date of this balance sheet.

19.8 In the Extra-ordinary General Meeting of members held on 20 March 2021, the Company approved the issue and allotment of 76,15,381 equity shares of '10 each on preferential basis to Non promoter group at issue price of ' 65 per share (including premium of ' 55 per equity share ) for a consideration of ' 49,49,99,765/-. The same have been alloted on 22^nd April 2021.

19.9 During the previous year ended 31 March 2022, in accordance with SEBI regulations, with the approval of members by the Special resolution in the Extra Ordinary General meeting held on 17 March 2022, the Board is entitled to issue and allot 54,50,000 convertible share warrants to promoter group company on preferntial basis at issue price of ? 105 per warrant. 25% of issue price to be received at the time of issue and allotment of warrants. 75% of issue price to be received at the time of allotment of shares. Each warrant is convertible into 1 fully paid equity share of ? 10 each. Company has withdrawn the aforesaid issue of convertible share warrants.

24.1 Above loans are secured by first pari-passu charge on current assets including few brands of the Company, second charge on both present and future fixed assets of the company and Pledge of unencumbered shareholding in the company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc. and Pledge of 12,71,250 shares of Bravo Healthcare ltd and pledge of 5 shares of Wanbury Global FZE on pari passu basis. Further there is Corporate Guarantee of Experts Chemicals , Bravo Healthcare, Wanbury Global FZE and Kingsbury investments and Personal Guarantee of Mr. K Chandran, Director of the company.

24.2 Factoring facilities are secured by subservient (residual) charge on all present and future receivables, book debts, outstandings, monies receivables, claims and bills of the company, which are now due and or which may be due at anytime of its approved debtors and subservient charge on all present and future fixed asset and current assets of the company.

27.1 The NCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL. The NCD comprises of Part A of ? 60 and Part B of ? 40 which are redeemable at par at the end of two years and three years respectively from 1 May 2007. The Company had redeemed Part A of ? 60 relating to 1,49,709 NCD's in the earlier years. NCD's amounting to ? 69.67 Lakhs (Pr. Yr. ? 69.67 Lakhs) and ? 63.37 Lakhs (Pr. Yr. ? 63.37 Lakhs) was due for repayment on 1 May 2009 and 1 May 2010 respectively. Refer Note 46a.

27.2 The OFCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL. OFCD are convertible between 01 November 2008 and 30 April 2012 into equity shares at a price being higher of t 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right amounting to t 194.12 Lakhs (Pr. Yr. t 94.11 Lakhs) and t 194.56 Lakhs (Pr. Yr. t 94.38 Lakhs) was due for repayment on 30 April 2010 and 30 April 2011 respectively. Refer Note 46a.

27.3 Term loans of erstwhile PPIL amounting to t 68.02 Lakhs (Pr. Yr. t 68.02 Lakhs) are secured by a pari-passu first charge on its fixed assets of erstwhile PPIL.

27.4 The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR vide its order dated 24 April 2007. Refer Note 46a.

27.5 There is delay in repayment of

(i) amount payable to FCCB Holders aggregating to t 372.04 Lakhs (Pr. Yr. t 350.32 Lakhs) ranging from 1 to 3994 days (Pr. Yr. 1 to 3629 days).

(ii) interest on FCCB aggregating to t 124.76 (Pr. Yr. t 117.48 Lakhs) ranging from 1 to 4293 days (Pr. Yr. 1 to 3928 days).

(iii) Interest on Liability against Corporate guarantee to t 107.80 Lakhs (Pr. Yr. t 88.73 Lakhs) by 1 to 1432 days (Pr. Yr. 1 to 1067 days)

40. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances ? 486.09 Lakhs (Pr. Yr. ? 113.54 Lakhs).

b) Other Commitments - Non Cancellable Operating Lease (Refer Note 57)

The management considers the Service Tax, Excise Duty, Custom Duty, Sales Tax, GST etc demand received from the authorities and demand received from NPPA are not tenable against the Company, and therefore no provision for these contingencies has been made. Further, in respect of aforesaid matters, the Company does not expect to have any material adverse effect on the Company's financial conditions, results of operations or cash flows. Future cash flows in respect of liability under clause (a) is dependent on terms agreed upon with the parties and in respect of liability under clause (b) to (g) are dependent on decisions by relevant authorities of respective disputes.

Code of Social Security,2020

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

42. a. Exim Bank has subscribed to 4,511 Preference Shares of Euro 1,000/- each of Wanbury Holding B. V., a subsidiary company pursuant to the Preference Share Subscription Agreement dated 7 December 2006. Pursuant to the said agreement, Exim Bank has exercised Put Option vide letter dated 8 November, 2011 and the Company is required to pay USD 60 Lakhs (Pr. Yr. USD 60 Lakhs) equivalent to ? 4,930.20 Lakhs (Pr. Yr. ? 4,547.55 Lakhs) to acquire aforesaid preference shares, against which the Company has made provision of approximately 20%.

The said dues are part of the CDR Scheme

Pursuant to Exim Bank letter dated 27 September 2021, the aforesaid liability has been settled under One Time Settlement(OTS) at USD 12 Lakhs (Pr. Yr. USD 12 Lakhs) equivalent to ? 986.04 Lakhs (Pr. Yr. ? 909.51 Lakhs).

Further, vide letter dated 3 July 2023, Exim bank has approved extension of time for repayment upto 30 September 2023.

The company has been providing interest at the stipulated rate on the outstanding amount.

In respect of this matter Contingent Liability on cut off date is ? 4,230.20 Lakhs (Pr. Yr. ? 3,847.55 lakhs).

b. State Bank of India, London filed legal proceedings dated 28 February 2017, demanding repayment of Euro 38.23 Lakhs (Pr. Yr. Euro 38.23 Lakhs) equivalent to ? 3,419.39 Lakhs (Pr. Yr. ? 3,219.73 Lakhs) together with interest till the date of repayment by the Company in terms of Guarantee & Loan agreement dated 27 September 2007 vide which aforesaid credit facilities was granted to Cantabria Pharma S L, the step down subsidiary of the Company.

State Bank of India, London, vide compromise settlement letter dated 01 February 2018 approved the settlement of their dues at 20% in respect of loan availed by Cantabria Pharma SL.

Further, vide letter dated 16 June 2023, State Bank of India, London, has approved extension of time for repayment upto 31 December 2023

The Company has been providing interest at the stipulated rate on the outstanding amount.

In respect of this matter Contingent Liability on cut off date is ? 2,774.75 Lakhs (Pr. Yr. ? 2,575.13 lakhs).

43. The Company expects to settle Corporate Guarantee liability of Cantabria Pharma SL, the step down subsidiary of the Company & Wanbury Holding B.V., a subsidiary company (Refer note 41(a) & 42), at approximately ? 3,413.49 Lakhs (Pr. Yr. ? 3,519.96 Lakhs) excluding interest thereon if any, and the same is shown under “Current Financial Liabilities - Others”.

During the previous year ended 31 March 2022, considering the above OTS & Compromise Settlement letter from the lenders, during the year, ? 1,011.74 lakhs has been recognised as gain on extinguishment of financial liability & shown the same under exceptional items. (Refer Note 44)

45. The Company has one segment of activity namely “Pharmaceutical”.

46. a. Erstwhile the Pharmaceutical Products of India Limited (PPIL) was merged with the Company, pursuant to the Order

dated 24 April 2007, passed by Hon'ble Board for Industrial and Financial Reconstruction (BIFR).

The Hon'ble Supreme Court vide its order dated 16 May 2008, had set aside the above referred BIFR order and remitted the matter back to BIFR for considering afresh as per the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), in response to a petition filed by one of the unsecured creditors of erstwhile PPIL.

The BIFR had directed IDBI Bank, which was appointed as an Operating Agency, to formulate new Draft Rehabilitation Scheme (DRS) pursuant to the Order of Hon'ble Supreme Court of India dated 16 May 2008. In the meanwhile, the Company had sought legal opinion and the Company was advised to maintain status quo ante with respect to the merger under the said Scheme and that it should take further steps only on the basis of the fresh BIFR Order.

In view of the above, the Company had maintained a status quo in the past. However, all actions taken by the Company pursuant to the sanctioned scheme were kept subject to and without prejudice to the order that may be passed by the BIFR while considering the case afresh pursuant to the directions of the Hon'ble Supreme Court in its order dated 16 May 2008.

As per BIFR Order dated 24 April 2007, statutory dues of erstwhile PPIL comprising of income tax ? 250.36 Lakhs, profession tax ? 6.06 Lakhs, custom duty ? 230 Lakhs, sales tax ? 8.50 Lakhs and excise duty ? 15.62 Lakhs were required to be paid in six annual installments and remains payable at the period end.

Further, the Company had pursuant to the scheme, allotted Non Convertible Debentures (NCDs) of ? 242.50 Lakhs and Optionally Fully Convertible Debentures (OFCDs) of ? 581.99 Lakhs, to some of the lenders of erstwhile PPIL, out of which dues amounting to ? 152.67 Lakhs and ? 581.99 Lakhs in respect of NCDs and OFCDs respectively, which remains payable till the year ended 31 March 2021.

During the previous year ended 31 March 2022, Company had Provided for Additional Liability of ? 100 Lakhs and ? 150 Lakhs for NCDs and OFCDs respectively. Further during the previous year, the Company has sold some of the land & building of erstwhile PPIL and the sales proceeds have been utilized towards partial repayment of NCDs and OFCDs of ? 119.63 Lakhs and ? 543.50 Lakhs respectively. Hence, ? 133.04 Lakhs and ? 188.49 Lakhs in respect of NCDs and OFCDs respectively, remains payable as on 31 March 2022.

During the year 31 March 2023, the company had provided for additional liability of f 200.19 Lakhs for OFCD's. Hence f 133.04 Lakhs and f 388.68 Lakhs in respect of NCD's and OFCD's respectively remains payable as on 31 March 2023.

Since BIFR was considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues were not paid.

However, the Government of India had, vide Notification No. S.O. 3568(E) dated 25 November 2016, notified the SICA Repeal Act, 2003, w.e.f. 1 December 2016, and as a consequence thereof, BIFR and AAIFR stood dissolved w.e.f. 1 December 2016. Simultaneously, in terms of Section 252 of Insolvency & Bankruptcy Code (“IBC 2016”), the government amended Section 4(b) of the said repeal act in the manner specified in the Eighth Schedule of IBC 2016, resulting in the abatement of all pending proceedings including pending merger scheme before BIFR.

In view of the foregoing developments, the management is currently considering various other options available under the laws and as may be advised by the legal experts either to regularize lawfully all acts and deeds done under the erstwhile merger scheme or to undo what was done in pursuance and as a sequel of the erstwhile merger scheme sanctioned by BIFR vide order dated 24 April 2007.

b. Assets held for sale:

As per the scheme of rehabilitation and merger approved by BIFR, erstwhile PPIL is required to sell office premises at Saki Naka, Mumbai and R & D premises at Turbhe, Navi Mumbai in settlement of part dues of secured and unsecured payables mentioned in the aforesaid scheme. Consequently, the said assets are classified as held for sale and measured at lower of carrying cost and fair value less cost to sell. The Company is not charging any depreciation on assets held for sale.

During the year, the Company has sold Building at Turbhe, Navi Mumbai and sales proceeds have been used for partial repayment of NCD & OFCD as mentioned above in the Note No 46a.

47. During the year ended 31 March 2017, SBI and SBM had sold its loan exposure and have assigned all the rights, title and interests in financial assistance on the Company to Edelweiss Asset Reconstruction Company Limited (EARCL) at an agreed value.

During the previous year ended 31 March 2022, pursuant to the settlement arrangement letter dated 13 December 2021, EARCL has agreed final settlement amount of f 8,500 Lakhs. Major part of the settlement aunt was paid and interest had been provided at stipulated rates. Consequently, f 6,875.02 Lakhs was recognized as gain on extinguishment of financial liability and shown under “Exceptional Item”.

Further, during the previous year ended 31 March 2022, Union Bank of India and Exim Bank vide letter dated 1 December 2021 and 7 December 2021 respectively have assigned all the rights, title and interests in financial assistance on the Company to EARCL at agreed value.

During the year ended 31 March 2023, in respect of aforesaid dues, EARCL has agreed for the Revised Settlement amount to be payable within the stipulated time. Consequently f 981.58 Lakhs has been recognised as loss on settlement of financial liability and shown under “Exceptional Item”.

48. The balances of trade receivables, trade payables, loans and advances are subject to confirmation/reconciliation and adjustments, if any.

B. Reconciliation of Effective Tax Rate:For the year ended 31 March 2023:

The Company has incurred loss during the yar ended 31 March 2023. Since there is book loss as well as tax loss and hence no tax Is payable as per provision of Income Tax Act 1961. Therefore, calculation of effective tax rate Is not relevant and hence not given.

53. Employee Benefits

As required by Ind AS 19 “Employees Benefits” the disclosures are as under:

Defined Contribution Plans

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees' Pension Scheme (EPS) with the Government, and certain State plans such as Employees' State Insurance (ESI), PF and EPS cover substantially all regular employees and the ESI covers certain employees. Contributions are made to the Government's funds. While both the employees and the Company pay predetermined contributions into the provident fund and the ESI Scheme, contributions into the pension fund is made only by the Company. The contributions are normally based on a certain proportion of the employee's salary.

Defined Benefit Plans

Gratuity: Under the gratuity plan, the eligible employees are entitled to post -retirement benefit at the rate of 15 days salary for each year of service until the retirement or resignation with a payment ceiling of ? 20 lakhs. The Company makes annual contributions to Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of LIC, a funded defined benefit plan for qualifying employees. The scheme provides for payment to vested employees as under:

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

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

ii) On the death in service:

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

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.

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

The expected contribution for Defined Benefit Plan for the next financial year will be in line with current financial year.

The Average outstanding terms of obligations (years) as at valuation date is 8.86 years (Pr.Yr. 8.69 years) .

Death Benefit:

The Company provides for death benefit, a defined benefit plan, (the death benefit plan) to certain categories of employees. The death benefit plan provides a lump sum payment to vested employees on death, being compensation received from the insurance company and restricted to limits set forth in the said plan. The death benefit plan is non - funded.

Leave Encashment:

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

Accordingly aggregate of ? 516.52 Lakhs (Pr. Yr. ? 457.23 Lakhs) being liability as at the year end for compensated absences as per actuarial valuation has been provided in the accounts.

The Actuary has outlined the following risks associated with the plans:A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates:

If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

If actual mortality rates are higher than assumed mortality rate assumption than the leave benefit will be paid earlier than expected. The acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates:

If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

If actual withdrawal rates are higher than assumed withdrawal rate assumption than the leave benefit will be paid earlier than expected. The impact of this will depend on the relative values of the assumed salary growth and discount rate.

Variability in availment rates:

If actual availment rates are higher than assumed availment rate assumption then leave balances will be utilised earlier than expected. This will result in reduction in leave balances and Obligation.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the Company there can be strain on the cashflows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognised immediately in the year when any such amendment is effective.

54. Employees Stock Options Plan ('ESOP')

The Company has established an Employee Stock Options Plan 2016 (‘WANBURY ESOP - 2016') which was approved by the shareholders vide their resolution dated 29 September 2016. The options issued under the above scheme vest in phased manner. Each option entitles an employee to subscribe to one equity share of the Company at an exercise price of ? 10 per share.

The options will be vested over a period of five years subject to continuous employment with the Company and the fulfillment of performance parameters.

55. Disclosure for leases under Ind AS 116- “Leases”:

The Company has taken various/few premises on lease.Rental contracts are made from 12 months to 60 months and are renewable by mutual consent on mutually agreeable terms. Some of these lease agreements have price escalation clauses. There are no restriction imposed by lease agreements and there are no sub leases. There are no contingent rents.

The Company has adopted Ind AS 116 effective from 1 April 2019, using the modified retrospective method.

Right-of-use assets is depreciated on a straight-line basis over the shorter of the lease term and useful life of the asset.

58. During the year, the Company has incurred losses and Company's net-worth is negative. Its current liabilities far exceeds its current assets and one of the lender has filed application with Mumbai Debt Recovery Tribunal for the recovery of dues. The Company has infused funds in the past and initiated various measures, including restructuring and realigning of debts/business. As part of overall debt resolution plan, the Company is in final stage of raising funds from an Alternative Investment Fund and the proceeds will be utilised in repayment of debts/dues. Consequently, in the opinion of the management, operations of the Company will continue without interruption. Hence, financial statements are prepared on a “going concern” basis.

59. Capital Management

The primary objective of the Company's capital management is to maximise shareholder value.

The capital structure of the Company is based on the management's judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company has initiated various measures, including restructuring of debts and infusion of funds etc.

During the previous year ended 31 March 2022, the Board of Directors at their meeting held on 22 April 2021 allotted 76,15,381 Equity Shares of face value ? 10/- each at an issue price of ? 65/- per equity share (including premium of ? 55/-per equity share) aggregating to ? 4,950 Lakhs. Further, during the previous year, the Company had sold some of its Land & Building aggregating to ? 1,069.57 Lakhs. Proceeds from the same had been utilised in repayment/settlement of existing debts.

For the purpose of the Company's capital management, the Company monitors Net Debts and Equity.

Equity includes all components of equity i.e. paid up equity capital, share premium and all other equity reserves attributable to the equity holders of the Company.

Net Debt includes all liabilities i.e. interest bearing loans and borrowings, trade payables, provisions and other liabilities less cash and cash equivalents.

B. Fair Value Measurements Fair Value Hierarchy

This section explains the Judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian Accounting Standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets or identical assets and liabilities.

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

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities etc. included in level 3.

i. Risk Management Framework

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

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 regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligation.

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

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

(a) Trade Receivables

Customer credit risk is managed by the Company subject to Company's established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from wholesalers, non-interest bearing and are generally on 7 days to 120 days credit term. Credit limits are established for all customers based on internal rating criteria and any deviation in credit limit require approval of Directors. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. Trade receivables do not contain any significant financing component and hence, the Company recognises life time expected credit loss based on simplified approach.

(b) Other Financial Instruments

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks or financial institutions with high credit rating assigned by credit rating agencies. For other financial assets, the Company assesses and manages the credit risk internally. The Company considers the probability of default upon initial recognition and assess whether there has been a significant increase in credit risk subsequently based in the historical losses and forward looking supportable information. Based on general approach, if there is a significant increase in credit risk of a financial asset since its initial recognition the Company recognises life time expected credit loss otherwise 12 months expected credit loss is recognised.

iii. Liquidity Risk

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

The following tables detail the Company's remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are at floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

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

The analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non financial assets and liabilities.

(a) Currency Risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company.

The currencies in which these transactions are primarily denominated are US dollars (US $), Pound (GBP) and Euro.

As the share of exports to total sales made by your Company is considerable, same is partly hedge through natural hedging via raw material imports. Further management exercise close monitoring of currency fluctuations.

During the previous year ended 31 March 2022 the Company has not entered into any forward exchange contract.

During the year ended 31 March 2023, the Company has entered into forward exchange contract, being derivative instrument to mitigate foreign currency risk, to establish the amount of currency in India Rupees required or avaibale at the settlement date of certain payables and receivables

Sensitivity:

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments.

The following table details the Company's sensitivity to 1% increase and decrease in the exchange rate between the Indian Rupee and respective currencies. A positive number below indicates an increase in profit/ decrease in losses and negative number indicates decrease in profit/ increase in losses:

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Majority of borrowings of the Company are at fixed interest rate and are carried at amortised cost. They are therefore not subject to interest rate risks, since neither the carrying amount nor the future cash flows will fluctuate because off a change in market interest rates.

(c) Price risk

The Company is exposed to equity price risks arising from equity investments. However, there is no material impact of the sensitivity.

61. Revenue (Ind AS 115)

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/traded goods. Sale of goods are made at a point in time and revenue is recognised upon satisfaction of the performance obligations which is typically upon dispatch / delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established. The credit period provided by the Company is not significant, hence there is no significant financing component.

Explanation where variance in ratios is more than 25%Debt-Service Coverage ratio:

Current period ratio is lower due to lower EBITDA mainly due to loss and Exceptional items (refer note 44) as against previous year ratio better due to improved profitability and exceptional items(Refer note 44).

Trade receivables turnover ratio:

Current period ratio is lower due to increased average receivable.

Net profit ratio:

Current period ratio is lower due to lower sales and low profitability

Return on Capital employed:

Current year ratio is lower due to Loss and further decrease in earnings. As against, previous year ratio was better due to better gross margins.

63. Disclosure of Transactions With Struck Off Companies:

The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year.

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

65. During the year, there are no transaction/details to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:

a. Crypto Currency or Virtual Currency

b. Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

c. Registration of charges or satisfaction with Registrar of Companies

d. Undisclosed Income

e. Relating to borrowed funds:

i. Discrepancy in utilisation of borrowings

ii. Borrowings from banks and financial institutions for the specific purpose

66. Disclosure of borrowings obtained on the basis of security of current assets:

The Company has been sanctioned working capital borrowing of ? 892 Lakhs comprising of ? 589 Lakhs fund based and ? 303 Lakhs non-fund based from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with banks in lieu of the sanctioned working capital facilities. Discrepancies are as under.

# The quarterly statements submitted to banks were prepared and filed before the completion of all the financial statement closure activities including IndAS related adjustments/reclassifications & regrouping as applicable, which led to these differences between the final books of accounts and the quarterly statements submitted to banks based on provisional books of accounts

67. Compliance with approved Scheme(s) of Arrangements:

During the Year, the Company has not entered into any Scheme of Arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

68. Utilisation of borrowed funds and share premium:

A. During the year, the Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),

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.

B. During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the 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.

70. The Company is facing some challenges on raw material availability mainly due to working capital constraints. The current supplier arrangement and fund availability ensures material availability sufficient to cater only to the plants at Tanuku and Patalganga which being USFDA & EUGMP approved facilities, fetch better realisation of API produced. Hence, the Company has shut the operations at Tarapur plant. However, the Company is maintaining facilities to keep it ready for restart once material availability is re-established. Management is exploring various business opportunities for productive use of Tarapur plant.

71. Previous year's figures have been re-grouped / re-classified wherever necessary, to confirm to current year's classification