r) Provisions, Contingent Liabilities and
Contingent Assets:

A provision is recognised when the Company
has a present obligation as a result of past
events and it is probable that an outflow
of resources will be required to settle the
obligation in respect of which a reliable
estimate can be made. If effect of the time
value of money is material, provisions are
discounted using an appropriate discount
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is
used, the increase in the provision due to the
passage of time is recognized as finance cost.
Contingent Liabilities are not recognized but
are disclosed in the notes.

s) Offsetting:

Financial assets and financial liabilities are
offset and the net amount presented in the
balance sheet when, and only when, the
Company currently has a legally enforceable
right to set off the amounts and it intends
either to settle them on a net basis or to realize
the asset and settle the liability simultaneously.

t) Earnings per share:

Basic earnings per share are computed
using the weighted average number of
equity shares outstanding during the period
adjusted for treasury shares held. Diluted
earnings per share is computed using the
weighted-average number of equity and
dilutive equivalent shares outstanding during
the period.

u) Operating cycle

The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.

v) Exceptional Items:

Exceptional items refer to items of income
or expense within the statement of profit
and loss from ordinary activities which are
nonrecurring and are of such size, nature

or incidence that their separate disclosure
is considered necessary to explain the
performance of the Company.

1.2 Recent Indian Accounting Standards (Ind AS):
Standards Issued.

"The Ministry of Corporate Affairs ("MCA”)
notifies new standards or amendments to
existing standards under the Companies (Indian
Accounting Standards) Rules from time to time.

In May 2025, the MCA notified amendments to
Ind AS 21 - The Effects of Changes in Foreign
Exchange Rates, applicable w.e.f. April 1, 2025.
The Company has reviewed the amendment and,
based on its evaluation, determined that it does
not have any significant impact on its financial
statements. In August 2025, the MCA notified the
following amendments:

Ind AS 1 - Presentation of Financial Statements:
The Company has adopted the amendments to
Ind AS 1, Presentation of Financial Statements,
effective April 1, 2025. The amendments clarify
that the classification of liabilities as current
or non-current is based on rights that are in
existence at the end of the reporting period. The
Company has evaluated its loan arrangements
and associated covenants. Since the Company’s
right to defer settlement of its noncurrent liabilities
is not subject to any compliance breaches of
substantive covenants existing at the reporting
date, these amendments do not have any impact
on the classification of liabilities in the Company’s
financial statements for the year ended March
31, 2026.

Ind AS 7 and Ind AS 107: Supplier Finance
Arrangements (SFA): The Company has evaluated

the recent amendments to Ind AS 7 and Ind AS
107 regarding Supplier Finance Arrangements,
effective from April 1, 2025. These amendments
require enhanced disclosures regarding the nature,
carrying amounts, and liquidity risks associated
with arrangements where a finance provider
pays the Company’s suppliers on its behalf. As the
Company does not currently utilize any supplier
finance or reverse factoring arrangements for its
working capital requirements, these amendments
do not have any impact on the Company’s financial
position, cash flows, or liquidity risk disclosures for
the year ended March 31, 2026.”

Ind AS 118 Presentation and Disclosure in
Financial Statements: Ind AS 118 will replace
Ind AS 1 “"Presentation of Financial Statements””
and is effective for annual reporting periods
beginning on or after 1 April 2027. Ind AS 118
introduces revised presentation requirements in
the statement of profit and loss and enhanced
disclosure requirements. The standard is expected
to impact presentation and disclosures but not the
recognition and measurement. The Company is
currently evaluating the impact of this standard
on the accompanying standalone financial
statements. Ind AS 1 - Presentation of Financial
Statements: MCA vide notification dated 13
August 2025, has introduced amendment under
Paragraph 74 of Ind AS 1 which requires the
entity to classify the liability as current under the
aforementioned situation because, at the end of
the reporting period, it does not have the right
to defer its settlement for at least twelve months
after that date. Such amendment has been made
effective for annual reporting periods beginning
on or after 01 April 2026 retrospectively in
accordance with Ind AS 8.

(b) Rights, preference and restriction attached to each class of shares :

Equity Shares:

The Company has only one class of equity shares having par value of Re .1/- per share. Each holder of
equity shares is entitle to one vote per share.

In the event of liquidation, the holders of equity are entitled to receive the remaining assets of the
Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to
the number of equity shares held by the shareholders.

1. Corporate guarantees issued by the Company in favour of banks/NCD holders on behalf of its subsidiaries
aggregated to ^14,052 lakhs as at 31 March 2026 (31 March 2025: ^49,066 lakhs). The outstanding
borrowings covered under these guarantees were ^9,652 lakhs (31 March 2025: ^20,664 lakhs).

2. The Company is involved in disputes, lawsuits, proceedings etc. including patent and commercial matters
that arise from time to time in the ordinary course of business. Management is of the view that above
matters are not tenable and will not have any material adverse effect on the Company’s financial position
and results of operations.

34 Financial Risk Management

The Company activities expose it to a variety of financial risks such as Market Risk, Credit Risk and Liquidity
Risk. The company’s focuses on minimizing potential adverse effect on its financial performance.

A) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. The changes in the values of financial assets/liability may result from change
in the foreign currency exchange rates (Foreign Currency Risk), change in interest rates (Cash flow &
interest rate risk), and change in price of investments (Price Risk).

(i) Foreign Currency Risk

The Company operates internationally and a major portion of the business is transacted in USD,
EURO & GBP currencies and consequently, the Company is exposed to foreign exchange risk through
operating and borrowing activities in foreign currency.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will
fluctuate because of changes in market interest rates. In order to optimize the Company’s position
with regards to interest expenses/ income and to manage the interest rate risk, the Company

weighted average balance manage its interest rate risk by having portfolio of fixed / variable interest
rate on long / short term borrowings. The analysis is prepared assuming the amount of liability
outstanding at the ending of the reporting period is the average weighted balance of the respective
reporting period.

According to the Company interest rate risk exposure is only for floating rate borrowings, change
in 0.5% in the interest rate component applicable to the short term borrowings would effect the
Companies net profit before tax at the end of the reporting period year ended 31 March, 2026 and
31 March, 2025 respectively.

(iii) Price Risk

Company does not have any exposure to price risk , as there is no market based equity investment
made by the Company.

B) Credit Risk

Credit risk is the risk that a counterparty will fail to meet its obligations under a financial instrument or
customer contract, resulting in a financial loss to the Company. Credit risk arises primarily from trade
receivables and financing activities. The Company manages customer credit risk through continuous
assessment of customers’ creditworthiness and periodic review of credit limits. The Company has also
implemented an automated system-based control that blocks further sales to customers with overdue
receivables. The Chief Financial Officer (CFO) is authorized to block customers with overdue payment
defaults, and such customers are reactivated only upon approval of the Managing Director (MD). These
controls strengthen the Company’s credit risk management framework.

The Company establishes an allowance for impairment that represents its estimate of expected losses
in respect of trade and other receivables. The maximum exposure to credit risk as at reporting date is
primarily from trade receivables amounting to Rs 22,266(March 31, 2025: Rs. 17,677). The movement
in allowance for impairment in respect of trade and other receivables during the year is as follows:

Expected credit loss assessment

The Company reviewed customers outstanding at the end of each reporting period and determine
incurred and expected credit losses. Past trend of impairment of trade receivables do not reflect any
significant credit losses.The movement in allowance for impairment in respect of trade and other
receivables during the year was as follows:

Long outstanding receivables from customers are regularly monitored, and transactions with such
customers are generally secured through letters of credit. The maximum exposure to credit risk at the
reporting date is the carrying value of trade and other receivables. One customer accounted for more
than 10% of the trade receivables as at 31 March 2026, while two customers accounted for more than
10% as at 31 March 2025. As the Company has maintained long-standing business relationships with
these customers, management does not consider there to be any significant credit risk associated with
these balances.

C) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations of its
financial liability. The objective of liquidity risk management is to maintain sufficient liquidity and ensure
that funds are available for making liability when they are due, under normal and stressed condition
without incurring losses and risk.

The present available working capital facility is sufficient to meet its current requirment. Accordingly no
liquidity risk is perceived. In addition, the Company maintains the following line of credit facility

The table below provides details regarding the undiscounted contractual maturities of significant financial
liabilities as of 31 March, 2026 :

35 Capital Management

The key objective of the Company’s capital management is to ensure that it maintains a stable capital
structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure
future development of its business. The Company focused on keeping strong total equity base to ensure
independence, security, as well as a high financial flexibility for potential future borrowings, if required without
impacting the risk profile of the Company.

The Company’s goal is to continue to be able to return excess liquidity to shareholders by continuing to
distribute annual dividends in future periods.

38 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a Company, has to spend 2% of its average net profits of
three immediate preceding financial year. The Company has formed trust by name ‘Shilpa Foundation’ to
commit the expenditure under the various activity like pure and safe drinking water, Orphanage home,
Education promotion, Hospital/ Medical facility. Swatch bharat, Green Prroject with local bodies/NGO to make
eco-friendly environment.

42 Segment Information

In accordance with paragraph 3 of Indian Accounting Standard (Ind AS) 108 - Operating Segments, segment
information has been given in the consolidated financial statements of the Company, and therefore, no
separate disclosure on segment information is given in these standalone financial statements.

43 OPERATING LEASE

The Company has entered into lease agreements for use of land for its production and R&D facility which
expires over a period. Future minimum lease payments and payment profile of non-cancellable operating
leases are as under:

Note: The above disclosures are provided by the Company based on the information available with the
Company in respect of the registration status of its vendors/suppliers. The company has not provided for
any interest on balances of trade payables outstanding for more than 45 days based on the historical
data where no such claims have been made against the company by any of its vendors / suppliers.

(c) The Company’s exposure to liquidity, interest rate and currency risks are disclosed in note 34.

47 Investments are tested for impairment annually and when circumstances indicate that the carrying value
may be impaired. Impairment is determined by assessing the recoverable amount of each investment. When
the recoverable amount of the investment is less than its carrying amount, an impairment loss is recognised.

The recoverable amounts of the above investments have been assessed using a value-in-use model. Value in
use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value
of the business. Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax
cash flows. Key assumptions upon which the Company has based its determinations of value-in-use include :

a) Estimated cash flows based on internal budgets and industry outlook for a period of five years and a
terminal growth rate thereafter.

b) A terminal value arrived at by extrapolating the last forecasted year cash flows to perpetuity, using a
constant long-term growth rate ranging from 1-3%. This long term growth rate takes into consideration
external macroeconomic sources of data. Such long-term growth rate considered does not exceed that
of the relevant business and industry sector.

c) The after tax discount rates used reflect the current market assessment of the risks specific to the
investment, the discount rate is estimated based on the weighted average cost of capital for respective
investment. After tax discount rate used range from 11% to 12%.

The Company believes that any reasonably possible change in the key assumptions on which a recoverable
amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable
amount of the cash-generating unit.

48 Balance of trade receivables/ trade payables/advances and security deposits are subject to confirmation

49 Additional disclosures required by Schedule III (amendments dated 24 March 2021) to the Companies
Act, 2013;

2) The Company do not have any Benami property and neither any proceedings have been initiated or is
pending against the Company for holding any Benami property.

3) The Company do 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 financial year.

4) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

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

6) The Company has not been declared a wilful defaulter by any bank or financial institution or any other
lender during the current period.

7) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds, other the in the ordinary course of business by the Company to or in any
other person(s) or entity(ies), including foreign entities ("Intermediaries”) with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on
behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s)
(Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or

invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

8) The Company has not made 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).

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

10) The Company has sanctioned borrowings / facilities from bank on the basis of security of current assets
for the year ended 31 March 2026 and 31 March 2025. The monthly returns or statements of current
assets filed by the Company with bank are in agreement with the books of account.

11) The Company has not invested in the any entities with the understanding (whether recorded in writing or
otherwise) that the Company shall directly or indirectly lend or invest in ther persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries).

53 Capital infusion through “Qualified Institutions Placement (QIP):

On April 13, 2024, the Company has issued 1,09,89,010 Equity shares of face value Rs.1 each at a issue
price of Rs.455.00 per equity share pursuant to Qualified Institutions Placement (QIP) under the provisions
of Chapter VI of the Securities and Exhcnage Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018, as amended (the "SEBI ICDR Regulations”), and section 42 and 62 of the Companies Act,
2013, including the rules made thereunder, each as amended. The promoter’s shareholding has decreased
from 50.01% to 44.39% pursuant to the QIP issue. Further, as at December 31, 2024, the entire amount has
been utilised for the purpose for which the same was raised.

54 Bonus Shares Issued During the Current Financial Year:

On October 6, 2025, the Company had allotted 9,77,90,908 bonus equity shares of Re. 1 each (fully paid-up)
in the proportion of 1 bonus equity share for every 1 fully paid-up equity share to the eligible shareholders
whose names appeared in the Register of Members / Register of Beneficial Owners as on October 3, 2025,
being the record date fixed for this purpose, pursuant to the approval received from the Members at the 38th
Annual General Meeting held on September 26, 2025.

The said bonus equity shares rank pari passu in all respects with the existing equity shares of the Company. As
a result of the bonus issue, the issued, subscribed and paid-up equity share capital of the Company increased
to ^19,55,81,816 comprising 19,55,81,816 equity shares of Re. 1 each from R9,77,90,908 comprising
9,77,90,908 equity shares of Re. 1 each. The paid-up capital on account of the bonus issue of R9,77,90,908
has been appropriated from the Securities Premium Account.

55 Pursuant to the Scheme of Amalgamation under Sections 230 to 232 and other applicable provisions of the
Companies Act, 2013, the Hon’ble National Company Law Tribunal ("NCLT”), Bengaluru Bench, has approved
the Scheme of Amalgamation of Shilpa Therapeutics Private Limited ("Transferor Company”), a wholly owned
subsidiary of Shilpa Medicare Limited ("Transferee Company”), with Shilpa Medicare Limited.

The Scheme became effective upon filing of the certified copy of the NCLT Order with the Registrar of
Companies. The Appointed Date of the Scheme is 1 April 2025.

Pursuant to the Scheme of Merger by Absorption under Sections 230 to 232 and other applicable provisions
of the Companies Act, 2013, the Hon’ble National Company Law Tribunal ("NCLT”), Bengaluru Bench, vide
its Order dated 18 June 2025, sanctioned the Scheme of Merger by Absorption of INM Technologies Private
Limited ("INM”), a wholly owned subsidiary of the Company, with Shilpa Medicare Limited ("the Company”).
The Scheme has an Appointed Date of 1 April 2024.

Accordingly, the Company has accounted for the amalgamation in accordance with Appendix C to Ind AS
103 - Business Combinations of Entities under Common Control, applying the Pooling of Interests Method.

Consequently:

• The assets, liabilities and reserves of the Transferor Company have been recorded by the Transferee
Company at their existing carrying amounts as appearing in the books of the Transferor Company on
the Appointed Date.

• The financial statements have been prepared after giving effect to the Scheme from the Appointed Date
in accordance with the requirements of Appendix C to Ind AS 103.

• As the Transferor Company was a wholly owned subsidiary of the Company, no consideration was payable
under the Scheme and no shares were issued by the Company pursuant to the amalgamation.

• The investment held by the Company in the equity shares of the Transferor Company stands cancelled
upon the Scheme becoming effective.

• The difference, if any, arising between the carrying amount of the investment cancelled and the share
capital of the Transferor Company has been adjusted in equity in accordance with the accounting
treatment prescribed under the Scheme and Appendix C to Ind AS 103

The amalgamation is expected to result in simplification of the Group structure, operational efficiencies,
optimisation of resources, reduction in administrative and compliance costs and better utilisation of
synergies across the businesses.

56 Events after the reporting period:

On 22 May 2026, the Board of Directors of the company recommended a final dividend of Rs.0.60 per
equity share of Rs.1/-. The proposed dividend is subject to the approval of the shareholders in the Annual
General Meeting.

57 Figures of the previous year have been regrouped/rearranged wherever necessary.