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Notes to Accounts of Kilitch Drugs(I) Ltd.

Mar 31, 2023

1 ] Securities Premium: Securities premium reserve represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 for specified purposes.

2] Share Option Outstanding Account: Reserve relates to stock options granted by the Company to the employees under an employee stock options plan.

3] General Reserve: General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc.

4-] Retained earnings are the profits that the company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

#There are no Micro and Small Enterprises, to whom the company ows dues, for more than 45 days during the year as at March 31, 2023 and March 31,2022. The above information regarding Micro and Small Enterprises has been dertemined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditors.

Note 36 - Disclosure as per IND AS -19 "employee benefits".

(A) Expenses recognised for Defined Contribution Plan:

Employer’s Contribution to Provident and Pension Fund Rs. 18.21 Lakhs (PY Rs. 16.66 Lakhs],

Employer’s Contribution to ESIC Rs.6.63 Lakhs (PY Rs.6.31 Lakhs]

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(B) Expenses Recognised Defined Benefit Plan:

The company provides gratuity benefit to its employees which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

Notes:

1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.

2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.

3. Attrition rate/ withdrawal rate is based on Company''s policy towards retention of employees, historical data and industry outlook.

4-. The above information is certified by actuary.

These gratuity plan typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment Risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep marketforsuch bonds; if the return on plan asset is belowthis rate, it will create a plan deficit.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return onthe plan debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plans liability.

Note35 - Segment Reporting

The Company is mainly engaged in the development and operations of Pharmaceutical business. Accordingly, the Company has only one identifiable segment reportable underlnd AS 108- Operating Segments.

Managing Director (the ''Chief Operational Decision Maker'' as defined in Ind AS 1081 monitors the operating results of the company''s business for the purpose of making decisions about resource allocation and performance assessment.

Note 36 - Related Party Disclosures 1

In view of the INDAS 24 "Related Parties Disclosures", the disclosure in respect of related party transactions for the year ended on 31 st March 2023 is as under:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.

Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which related party operates. These balances are unsecured and their settlement occurs through banking channel.

Note 38 - contingent liabilities not provided for in Respect of:

a] Demand notices received on account of Property Tax pertaining to FY 2019-20 is aggregating''s. 53.20 Lakhs (P.Y. Rs. 53.20 Lakhslare disputed by the Company. The Company has filed a suit and the matter is pending the Supreme Court and Company has not yet deposited any amount in this regard.

b] Demand notices received on account of principal amount of CESS during FY 2019-20 pertaining to FY 1999-2000 and FY 20002001 is aggregating Rs.22.85 Lakhs (P.Y.Rs.22.85 Lakhs ] are disputed by the Company. The Company has filed a suit and the matter is pending the Supreme Court and Company has not yet deposited any amount in this regard.

The above litigations are not expected to have any material adverse effect on the financial position of the company.

Note 41 - Impairment of Assets

The Company''s Board, out of abundant caution and as a prudent practice in line with the standard accounting practices has not made any impairment provision against its investments for the financial year 2022-23.

Note 42 - Balance Confirmation

The balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising there from, if any.

The Company has accounted for its share of loss amounting to Rs. 0.19 Lakhs (P.Y. Rs. 0.20 Lakhs] pertaining to the financial year 2022-23.

Note 44 - Event after Reporting Date:

There are no major events occurred after the reporting date."

Note45 - CorporateSocial Responsibility

The company is required to comply the requirements of CSR as per Section 135 of the Companies Act, 2013 read with Schedule VII. Accordingly the company has spent an amount of Rs. 17.80 Lakhs during the Financial Year 2022-23.

Expenditure related to corporate social responsibility is:

Fair valuation techniques:

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The following methods and assumptions were used to estimate the fair values

• Fair value of the Equity Shares are based on price quoted on stock exchange.

• Fair value of investment in unquoted equity shares are considered same as carrying value as the same are recently acquired.

• Fair value of Financial Assets & Financial Fiability (except which are show at their fair value] are carried at amortised cost is not materially differentfrom its carrying cost.

• The Financial Assets do not include investments in group companies which are carried at cost.

Fair Value hierarchy:

The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Fevel 1 to Level 3 as described below:

Level 1: Quoted prices / published NAV (unadjusted] in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices] or indirectly (that is, derived from prices]. Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs]. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Note47 - Financial Risk Management:

The Company’s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.

Market risk:

Market risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.

Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate because of changes inforeign exchange rates.

The Company is exposed to foreign exchange risk through purchases of goods or services from overseas supplier in foreign currency. The Company generally transacts in US dollar. The foreign exchange rate exposure is balanced by purchasing of goods orservices in the respective currency.

The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.

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.

The Company is not exposed to interest rate risk as the Company has fixed rate of borrowings as at the respective reporting dates.

Commodity and Other price risk:

The Company is not exposed to the commodity and other price risk.

Credit Risk:

Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables] and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments

Trade and other receivables:

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular follow-up, engage with the customers, legal options/ any other remedies available with the objective of recovering these outstanding.

The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast spectrum and hence, the concentration of risk with respect to trade receivables is low. The Company also takes security deposits, advances, post-dated cheques etc. from its customers, which mitigate the credit risk to an extent."

Cash and cash equivalents another investments:

The Company is exposed to counter party risk relating to medium term deposits with banks and investment in mutualfunds.

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. “

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 at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cashflows.

Capital management

The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31,2023 and March 31,2022.

Note 50 - The previous yearfigures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.

Note 51 -Additional regulatory information required by Schedule III:

Details of benami property held -

No proceedings have been initiated on or are pending against the company for holding benami property under the benami Transactions (Prohibition] Act, 1988 (4-5 of 1988] and Rules made thereunder.

Borrowing secured against currentassets

The company does not have borrowings from banks and financial institutions on the basis of security of currentassets.

Wilful defaulter

Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority. Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

Compliance with approved scheme(s) of arrangements

The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

Utilisation of borrowed funds and share premium

The company has not advanced or loaned or invested funds to any other personts] or entitylies], 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

The company has not received any fund from any personts] or entitylies], 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 Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

Details of crypto currency or virtual currency

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

Valuation of PP&E, intangible asset and investment property

The company has not revalued its property, plant and equipment (including right-of-use assets] or intangible assets or both during the current or previous year.

Note 53 -The previous yearfigures have been regrouped, reworked, rearranged and reclassified, whenever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2018

NOTE 1 - CORPORATE INFORMATION:

The Company is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India and its shares are publicly traded on the National Stock Exchange (‘NSE’) and the Bombay Stock Exchange (‘BSE’), in India. The registered office of the company is located at C-301-2, M.I.D.C. TTC Industrial Area, Pawane Village, Thane - 400705.

These financial statements were approved and adopted by the Board of Directors of the Company in their meeting dated 25th May 2018.

NOTE 2 - BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial Statements have been prepared to comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended.

The Financial Statements for all the periods upto and including the year ended 31st March 2016 were prepared in accordance with the accounting standards notified under the section 133 of the Companies Act, 2013 read together with the paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

These Financial Statements for the year ended 31st March 2018 are the first financial statements of the Company prepared in accordance with Ind AS. Refer Note no. 47 for an explanation how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

The Financial statements provide comparative information in respect of the previous year. In addition, the company presents Balance sheet as at the beginning of the previous year, which is the transition date of Ind AS.

The significant accounting policies used in preparing financial statements are set out in Note 3 of the Notes on Financial Statements and are applied consistently to all the periods presented.

NOTE 3 - USE OF SIGNIFICANT ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS

In the process of applying the Company’s accounting policies, management has made the following estimates and judgements, which have significant effect on the amounts recognised in the financial statements:

(a) Depreciation and useful lives of Property, Plant and Equipment

Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.

(b) Recoverability of trade receivables

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. The Company uses a provision matrix to determine impairment loss allowance on its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

(c) Defined Benefit plans

The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(d) Provisions:

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.

(e) Impairment of financial assets:

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Estimates and judgments are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. They are continuously evaluated.

(f) Fair Value measurement:

The Company measures financial instrument such as certain investments, at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

NOTE 4- STANDARDS ISSUED BUT NOT EFFEcTIVE:

On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.

(a) Issue of Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.

(b) Amendment to Existing issued Ind AS

The MCA has also carried out amendments of the following accounting standards:

i) Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

ii) I nd AS 40 - Investment Property (Not applicable to the company)

iii) Ind AS 12 - Income Taxes

iv) Ind AS 28 - Investments in Associates and Joint Ventures and

v) Ind AS 112 - Disclosure of Interests in Other Entities

Application of above standards are not expected to have any significant impact on the Company’s Financial Statements.

NOTE 5 - DISCLOSURE AS PER IND AS - 19 “EMPLOYEE BENEFITS”.

(A) Expenses recognised for Defined Contribution Plan :

Employer’s Contribution to Provident and Pension Fund Rs. 6.99 Lakhs (PY Rs. 6.86 Lakhs).

Employer’s Contribution to ESIC Rs. 3.78 Lakhs (PY Rs. 2.54 Lakhs)

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(B) Expenses recognised Defined Benefit Plan:

The company provides gratuity benefit to it’s employees which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

ii) Change in Fair Value of Assets and Obligations

The Company has taken a decision to contribute to a fund managed by LIC as required by Law against its liabilities. Accordingly The Company has contributed an amount of Rs. 1 Lakhs on 31st March 2018.The remaining liability as derived by LIC towards the premium amount of Rs. 21,33,499 to be contributed in 20 equal quarterly instalments over the next 5 years.

Notes:

1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.

2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.

3. Attrition rate/ withdrawal rate is based on Company’s policy towards retention of employees, historical data and industry outlook.

4. The above information is certified by actuary.

These gratuity plan typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment Risk:

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

NOTE 6 - SEGMENT REPORTING

The Company is mainly engaged in the development and operations of Pharmaceutical business. Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments.

Managing Director (the ‘Chief Operational Decision Maker’ as defined in Ind AS 108) monitors the operating results of the company’s business for the purpose of making decisions about resource allocation and performance assessment.

NOTE 7 - RELATED PARTY DIScLOSURES

In view of the Ind As 24 “Related Parties Disclosures”, the disclosure in respect of related party transactions for the year ended on 31st March 2017 is as under:

a) RELATIONSHIPS

Category I : Subsidiaries of the Company

Indian Subsidiary - Monarchy Healthserve Private Limited Foreign Subsidiary - Kilitch Estro Biotech PLC

Category II : Key Managerial Personnel

Category III : Enterprises over which Key Managerial Personnel are able to exercise significant control

NBZ Healthcare LLP.

Arham Neeta Realties LLP Kilitch Pharma (Co.) Ltd.

Note : Figures in brackets indicates previous year figure.

1. The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.

2. Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which related party operates. These balances are unsecured and their settlement occurs through banking channel.

Compensation of key management personnel:

The remuneration of director and other member of key management personnel during the year was as follows:

NOTE 8 - CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

a. Disputed Statutory Dues in respect of Income Tax aggregating to Rs. 50,365,650/- (PY Rs. 50,365,650/-) pertaining to A.Y. 2008-09 have not yet been deposited as the aforesaid matter in pending before CIT (Appeals). The impact thereof, if any, on the tax position can be ascertained only after the disposal of the appeals. Accordingly, the accounting entries arising there from will be passed in the year of the disposal of the said appeals.

b. Demand notices received on account of Property Tax pertaining to FY 2018-19 is aggregating Rs. 45,73,288/- (PY Nil) are disputed by the Company. The Company has filed a suit and the matter is pending the Supreme Court and Company has not yet deposited any amount in this regard.

c. Demand notices received on account of principal amount of CESS during FY 2017-18 pertaining to FY 1999-2000 and FY 2000-2001 is aggregating ‘22,84,832/- (PY Nil) are disputed by the Company. The Company has filed a suit and the matter is pending the Supreme Court and Company has not yet deposited any amount in this regard.

d. A suit was filed against the Company at District and Sessions Court, Sirmaur, Himachal Pradesh in relation to a withholding of payment for delay in delivering service by a contractor amounting Rs. 11,99,175.47 (PY Nil).

e. The above litigations are not expected to have any material adverse effect on the financial position of the company.

NOTE 9 - The Company’s Board, out of abundant caution and as a prudent practice in line with the standard accounting practices has not made any impairment provision against its investments for the financial year 2017-18.

NOTE 10 - The balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising there from, if any.

NOTE 11 - The Company is a partner in a partnership firm M/s. Arham Neeta Realties LLP. The accounts of the partnership firm have been finalized up to the financial year 2017-18. The details of the Capital Accounts of the Partners as per the latest Financial Statements of the firm are as under:

The Company has accounted for its share of loss amounting to Rs. 23,550 (P.Y.? 44,428) pertaining to the financial year 2017-18.

NOTE 12 - EvENT AFTER REpORTING DATE:

The Board of Directors have recommended dividend of Rs. 0.5 per fully paid up equity share of Rs. 10 /- each, aggregating Rs. 82.78 lakhs, including Rs. 11.12 lakhs dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on March 31, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date / book closure.

NOTE 13 - cORpORATE SOcIAL RESpONSIBILITY:

The company is not required to spend any amount pertaining to to CSR as per Section 135 of the Companies Act, 2013 read with Schedule VII due to incurring losses during previous Financial Years.

NOTE 14 - FAIR VALUE OF FINANciAL ASSETS AND LIABILITIES:

Set out below is the comparison by class of carrying amounts and fair value of Company’s financial instruments that are reognised in the financial statements.

Fair valuation techniques:

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The following methods and assumptions were used to estimate the fair values

1 Fair value of the Equity Sahres are based on price quoted on stock exchange.

2 Fair value of investment in unquoted equity shares are considered same as carrying value as the same are recently acquired.

3 Fair value of Financial Assets & Financial Liability(except which are show at their fair value) are carried at amortised cost is not materially different from it’s carrying cost.

Fair Value hierarchy:

The following table provides the fair value measurement hierarchy of Company’s asset and liabilities, grouped into Level 1 to Level 3 as described below:

Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

NOTE 15 - FINANCIAL RISK MANAGEMENT:

The Company’s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.

- 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. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.

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 is exposed to foreign exchange risk through purchases of goods or services from overseas supplier in foreign currency. The Company generally transacts in US dollar. The foreign exchange rate exposure is balanced by purchasing of goods or services in the respective currency.

The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.

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.

The Company is not exposed to interest rate risk as the Company has fixed rate of borrowings as at the respective reporting dates. Commodity and Other price risk

The Company is not exposed to the comodity and other price risk.

- Credit Risk

Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.

Trade and other recivables:

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular followup , engage with the customers, legal options / any other remedies available with the objective of recovering these outstandings.

The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast specturm and hence, the concentration of risk with respect to trade receivables is low. The Company also takes security deposits, advances , post dated cheques etc from its customers, which mitigate the credit risk to an extent.”

Cash and cash equivalents an other investments

The Company is exposed to counter party risk relating to medium term deposits with banks and investment in mutual funds.

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. “

Exposure to credit risk

The gross carrying amount of financial assets, net of impairment losses recognised represents the maximum credit exposure. The maximum exposure to credit risk as at 31st March2017 and 31st March 2018 is as follows:

Cash and Cash equivalent, other Investment, Loans an other financial assets are neither past due nor impaired. Management is of view that these financial assets are considered good and 12 months ECL is not provided.

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 at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants , these loans become callable to the extent of failture at the option of lenders, except where exemption is provided by lender.

Capital management

The primary objective of the Company’s capital management is to maximize the shareholder value. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company’s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2018 and March 31, 2017.

For the purpose of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits.

NOTE 16 - share-base pAYMENTS arrangements

As per the ESOS, 2007 as amended from time to time 175,243 ESOPs were offered to our employees with a vesting period scattered over 3 years starting from the FY 2018-19. Out of the above 57,818 ESOPs will be excercisable on or after 15th April 2018 at an exercisable price at Face Value of Rs. 10 each.

NOTE 17 - DISdOSuRE AS REQuIRED By IND AS 101 - FIRST TIME ADOpTION OF INDIAN AccouNTING STANDARDS Exemptions Applied:

Ind AS 101 allows rst time adopters certain exemptions from the retrospective application of certain Ind AS, eective for April 1, 2016 opening balance sheet.

The following exceptions to the retrospective application of other Ind AS as per Appendix D of Ind AS 101 are applied by the company :-

1 Deemed cost of Property,Plant and Equipment: (PPE)

The Company has opted to continue with the carrying value for all of its PPE as recognised in the nancial statements as at the date of transition to Ind AS and measured as per previous GAAP and use that as its deemed cost as at the date of transition to Ind AS.

2 Financial assets and liabilities:

The Company has nancial receivables and payables that are non-derivative nancial instruments. Under previous GAAP, these were carried at transactions cost less allowances for impairment, if any. Under Ind AS, these are nancial assets and liabilities are initially recognised at fair value and subsequently measured at amortised cost, less allowance for impairment, if any. For transactions entered into on or after the date of transition to Ind AS, the requirement of initial recognition at fair value is applied prospectively.

3 Business Combination Exemption:

The Company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, “Business Combinations” to business combinations consummated prior to April 1, 2015 (the “Transition Date”), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP. The Company has also applied the exemption for past business combinations to acquisitions of investments in subsidiaries / associates / joint ventures consummated prior to the Transition Date.

4 Share-based payment transactions:

Ind AS 101 encourages, but does not require, rst time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2015.

5 Investments in subsidiaries and associates:

The Company has elected to measure investment in subsidiaries and associates at cost.

Impact of Transition to Ind AS

The following is a summary of the effects of the differences between Ind As and Indian GAAP on the Company’s total equity shareholders funds and profit and loss for the financial periods previously reported under Indian GAAP following the date of transition to Ind AS. There is no material impact of Ind AS transactions on the Cash flow statment.

(e) Footnotes to reconciliation of equity as on 1st April 2016 and 31st March 2017 and statement of Profit and Loss for the year ended 31st March 2016 Notes:

I Expected Credit Loss (ECL) Provision : The Company has provided ECL as per Ind AS. Impact of ECL as on date of transition is recognised in opening reserves and changes thereafter are recognised in Statement of Profit and Loss.

II Fair Valuation of Financial Asset : The Company has valued Financial assets (other than investment in subsidiaries, associates which are accounted at cost) at fair value. Impact of fair value changes on the date of transition is recognised in opening reserve and changes thereafter are recognised in Other Comprehensive Income.

The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.

NOTE 18 - The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2016

1. Contingent Liabilities:-

a. Estimated amount of guarantees & Letter of Credit given not provided for in the accounts is Rs. 63.08 Lakhs (Previous Year Rs. 63.08/- Lakhs).

b. Disputed Statutory Dues in Respect of Income Tax aggregating to Rs. 50,305,650/- pertaining to A.Y. 2008-09 have not been deposited as the matter is pending before the CIT (Appeals)

2. Disclosure as per Accounting Standard 15 (Revised) “Employee Benefits” notified under the relevant provisions of the Companies Act,2013

Defined Benefit Plan:

The company provides gratuity benefit to its employees which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

3. The Company is mainly engaged in the development and operations of Pharmaceutical business. All the activities of the company revolve around this main business. Considering the nature of the company’s business and operations, there are no separate reportable segments (Business and/or geographically) In accordance with the requirement of Accounting Standard 17 , ‘ Segment Reporting’ , issued by the Institute of Chartered Accountants of India.

4. As per Accounting Standard 18 (AS- 18) “Related Party Disclosures”, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:- [As identified by the Management]

Related Party Transactions

Name of the related parties and Nature of Relationship

I) Subsidiary of the Companies

Monarchy Healthserve Pvt Ltd Subsidiary

(W.e.f. FY 2014-15)

Kilitch Estro Biotech PLC Subsidiary

(W.e.f. 11.09.2015)

II) Key Managerial Personnel

Mr. Mukund Mehta Managing Director

Mr. Paresh Mehta Jt. Managing Director

Mr. Bhavin Mehta Whole Time Director

Mr. Deepu K. Whole Time Director

Mrs. Mira Bhavin Mehta Whole Time Director

III) Enterprises significantly influenced by Key Managerial Personnel

NBZ Pharma Ltd.

NBZ Healthcare LLP.

J.D. Enterprises Kilitch Pharma (Co.) Ltd.

EyeKare Kilitch Ltd.

Related Party Transactions

5. Employee Stock Option Plan

As per Employee stock options Scheme (Kilitch ESOS 2007), each option is convertible into one equity shares Rs. 10/- each at exercise price of Rs. 47.50/- per share. During the year, fresh options were not granted and the employees did not exercise any options.

6. The Balances of the Sundry Debtors, Sundry Creditors, Loans & Advances and Inter Corporate Deposits, whether Debit or Credit, are subject to confirmations from the respective parties and the reconciliations/ adjustments arising there from, if any.

However, in the opinion of the Management, the Current Assets, Loans and advances are approximately of the value stated in the balance sheet if realized in the ordinary course of the business and the provision for all known liabilities is adequate and not in excess of amounts considered reasonably necessary.

7. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2016. The above information, regarding Micro, Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

8. Figures of the previous year have been regrouped and/or recast wherever necessary so as to conform to the current year’s classification.


Mar 31, 2015

1. Disclosure as per Accounting Standard 15 (Revised) "Employee Benefts" notifed under the relevant provisions of the Companies Act,2013

Defned Beneft Plan:

The company provides gratuity beneft to it's employees which is a defned beneft plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee beneft entitlement and measures each unit separately to build up the fnal obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

The Figures for the previous year [ F.Y. 13-14] are not available as the company was, hitherto, providing for the Gratuity Liability as per the working obtained from the LIC of India and Leave Encashment Liability based on its own calculations.

2. The company is mainly engaged in the development and operations of Pharmaceutical business. All the activities of the company revolve around this main business. Considering the nature of the company's business and operations, there are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17; "Segment Reporting", issued by the Institute of Chartered Accountants of India.

3. As per Accounting Standard 18 (AS- 18) "Related Party Disclosures", issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defned in the Accounting Standard are given below:- [As identifed by the Management]

Related Party Transactions

Name of the related parties and Nature of Relationship

I) Subsidiary of the Companies

Monarchy Healthserve Pvt. Ltd. Subsidiary

(W.e.f. F . Y. 2014-15)

II) Key Managerial Personnel

Mr. Mukund Mehta Managing Director

Mr. Paresh Mehta Whole Time Director

Mr. Bhavin Mehta Whole Time Director

Mr. Deepu K. Whole Time Director

Mrs. Mira Bhavin Mehta Whole Time Director

III) Enterprises signifcantly infuenced by Key Managerial Personnel

NBZ Pharma Ltd. NBZ Healthcare LLP. J.D. Enterprises Kilitch Pharma (Co.) Ltd. EyeKare Kilitch Ltd.

4. Contingent Liabilities:- a. Estimated amount of guarantees & Letter of Credit given not provided for in the accounts is Rs, 63.08 Lakhs (Previous Year Rs, 63.08/- Lakhs).

b. The disputed statutory dues in respect of Income Tax aggregating to Rs, 50,305,650/- pertaining to A.Y. 2008-09 have not been deposited as the matter is pending before the CIT (Appeals).

5. Employee Stock Option Plan

As per Employee stock options Scheme (Kilitch ESOS 2007), each option is convertible into one equity shares Rs, 10/- each at exercise price of Rs, 47.50/- per share. During the year, fresh options were not granted and the employees did not exercise any options.

6. The Balances of the Sundry Debtors, Sundry Creditors, Loans & Advances and Inter Corporate Deposits, whether Debit or Credit, are subject to confrmations from the respective parties and the reconciliations/ adjustments arising there from, if any.

However, in the opinion of the Management, the Current Assets, Loans and advances are approximately of the value stated in the balance sheet if realized in the ordinary course of the business and the provision for all known liabilities is adequate and not in excess of amounts considered reasonably necessary.

7. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2015. The above information, regarding Micro and Small Enterprises has been determined to the extent such parties have been identifed on the basis of information available with the Company. This has been relied upon by the Auditors.

Figures of the previous year have been regrouped and/or recast wherever necessary so as to conform to the current year's classifcation.


Mar 31, 2014

1. Business Transfer and Product Transfer

The Company entered into a Business Transfer Agreement (BTA) on 6th October 2011 with Akom India Private Limited (AIPL), a Company incorporated under the Companies Act 1956 and having its registered office at 101-104, Banaji House, First Floor, Flora Fountain, Fort Mumbai 400001 (Purchaser). The Company has been restricted from exporting the products sold to AIPL under the PTA to all the countries except to 13 countries where they are allowed to export their other products. Profit on sale and export sale of products under the PTA will have to be paid to AIPL. During the Financial Year 2012-13, the company had to transfer Profit on sale of products amounting to Rs. 3,203,048 to Akom Private Limited.

The company also had to make excess payment against the Net Working Capital to the tune ofRs. 6,342,494. Both these expenses amounting to Rs. 9,545,542 have been written off as Extraordinary expenses during the Financial Year 2012-13.

2. Contingent Liabilities:-

Estimated amount of guarantees & Letter of Credit given not provided for in the accounts is Rs. 63.08 Lakhs (Previous Year Rs. 63.08/- Lakhsf.

3. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2014. The above information, regarding Micro, Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

4. The company is mainly engaged in the development and operations of Pharmaceutical business. All the activities of the company revolve around this main business. Considering the nature of the company''s business and operations, there are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17; "Segment Reporting", issued by the Institute of Chartered Accountants of India.

5. The Balances of the Sundry Debtors, Sundry Creditors, Loans & Advances and Inter Corporate Deposits, whether Debit or Credit, are subject to confirmations from the respective parties and the reconciliations/ adjustments arising there from, if any.

However, in the opinion of the Management, the Current Assets, Loans and advances are approximately of the value stated in the balance sheet if realized in the ordinary course of the business and the provision for all known liabilities is adequate and not in excess of amounts considered reasonably necessary.

6. Employee Stock Option Plan

a) As per Employee stock options Scheme (Kilitch ESOS 2007), each option is convertible into one equity shares Rs. 10/- each at exercise price ofRs. 47.50/- per share. During the year fresh options were not granted and employees did not exercise any options.

b) The employee compensation cost on account of this grant applicable for the year is Rs. Nil [P. Y. Rs. 8.95 Lacs],

7. As per Accounting Standard 18 (AS- 18) "Related Party Disclosures", issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:- [As identified by the Management.

Related Party Transactions

I. Name of the related parties and Nature of Relationship

A) Key Managerial Personnel

Mukund Mehta Chairman and Managing Director

Paresh Mehta Jt. Managing Director

- Bhavin Mehta Director

- Deepu K. Director

Mira B. Mehta Director (w.e.f. 17/10/2013)

B) Enterprises significantly influenced by Directors and/or their relatives

NBZ Pharma Ltd.

NBZ Healthcare LLP.

Arham Neeta Realities LLP -

Kilitch Pharma (Co.) Ltd.

EyeKare Kilitch Ltd.

8. Figures of the previous year have been regrouped and/or recast wherever necessary so as to conform to the current year''s classification.


Mar 31, 2013

Note 1

Business Transfer and Product Transfer -

The Company entered into a Business Transfer Agreement (BTA) on 6th October 2011 with Akorn India Private Limited (AIPL), a Company incorporated under the Companies Act 1956 and having its registered office at 101-104, Banaji House, First Floor, Flora Fountain, Fort Mumbai 40000l(Purchaser). The Company has been restricted from exporting the products sold to AIPL under the PTA to all the countries except to 13 countries where they are allowed to export their other products. Profit on sale and export sale of products under the PTA will have to be paid to AIPL. During the year the company had to transfer Profit on sale of products amounting to Rs. 32,03,048 to Akom Private Limited.

The Company''s net working capital at Paonta Sahib on the date of transfer of business i.e. (28* February, 2012) was estimated at Rs. 14.40 crores which was to be identified after 180 days from the date of the transfer by adjusting the net realized working capital from the purchase value based on which the amount payable or receivable by the Company would be determined mutually between the Company and AIPL These were identified after 180 days from the date of transfer, in November 2012. The company had to make excess payment against the estimated working capital ofRs. 14.40 crores to the tune ofRs. 63,42,494 to AIPL.

Thus the profit on sale of products ofRs. 32,03,048 and t 63,42,494 towards working capital totaling to Rs. 95,45,542 have been written off as Extraordinary items during the current year as these were to be settled in the current year as per the Business Transfer and Product Transfer agreement with AIPL.

Note 2

Micro, Small and Medium Enterprises

The company follows a trade policy as determined by them within Purchase Orders/ Sales Order for Trade Payables and Trade Receivables. The company has sent request to its creditors asking them if they are covered under micro small and medium industries. As no confirmation from the creditors were received the company has not classified creditors in to micro, small and medium industries and outstanding payable to them has not been shown separately.

Based on the information available with the Company, there are no dues payable to micro, small and medium enterprises as defined in The Micro, Small & Medium Enterprises Development Act, 2006. This information has been relied upon by the statutory auditors of the Company.

Note 3

Employee Stock Option Plan

a) As per Employee stock options Scheme (Kilitch ESOS 2007), each option is convertible into one equity shares 710/- each at exercise price of 747.50/- per share. During the year fresh options were not granted and employees did not exercise any options.

b) The employee compensation cost on account of this grant applicable for the year is 7 8,94,624/-.

Note 4

Related Party Transactions (AS-18)

Name of the related parties and Nature of Relationship

a) Subsidiary Companies/ Concerns

Nil

b) Directors and their Relatives

Mr. Mukund Mehta - Managing Director Mr. Paresh Mehta - Joint Managing Director Mr. Bhavin Mehta - Director Mr. Divya Mehta - Relative of Director Mrs. Mira B. Mehta - Relative of Director

c) Enterprises significantly influenced by Directors and/or their relatives NBZ Pharma Ltd.

J.D. Enterprises

EyeKare Kilitch Ltd.(The shares of the company were sold on 12/02/2013)

Kilitch Pharma (Co.) Ltd -Holding company acquired 66,29,342 equity shares(50.10%) on 21/09/2012 (a company in which the Directors are substantially interested)

Note No.5

Segment information

The company is predominantly engaged in Pharmaceutical business and this constitutes the only reportable business segment in accordance with the requirement of Accounting Standard 17- Segment Reporting issued by the Institute of Chartered Accountants of India.

Note No.6

Trade Payable & Trade Receivables

The Trade payables are unsecured, unconfirmed and fully payable by the Company

Trade Receivable : The Trade Receivables, Loan and advance are unsecured, considered good but not confirmed.

Note 7

Previous year figures

The Company has reclassified previous year''s figures to conform to this year''s classification.


Mar 31, 2012

Note 1

Business Transfer

The Company entered into a Business Transfer Agreement (BTA) on 6th October 2011 with Akom India Private Limited (AIPL), a Company incorporated under the Companies Act 19S6 and having its registered office at 101-104, Banaji House, First Floor, Flora Fountain, Fort Mumbai 400001 (Purchaser). As per this agreement the Company sold its business located at Paonta Sahib, Himachal Pradesh as a going concern on a slump sale basis as defined in section 2(42Q of the Income Tax Act, 1961 along with their employees on die terms and condition as set forth in the BTA. The undertaking was sold and transferred on 28ui February 2012 after getting all the necessary clearances as indicated in the BTA. The Company has retained its Name, Trademark(Kilitch) and all other properties and assets at Mumbai

The Cash consideration for the sale of Paonta Sahib plant exclusive of all applicable transfer taxes was Rs. 207.49 crores inclusive of the amount received towards net working capital Rs. 14.40 crores. The Company's net working capital at Paonta Sahib on the date of transfer was estimated at Rs. 14.40 crores which will be identified after 180 days from the date of transfer by adjusting the net realized working capital from the purchase value based on which the amount payable or receivable by rhe Company will be determined by mutual agreement

The Company also transferred certain products by entering into a Product Transfer Agreement (PTA) with AIPL by which the right to manufacture certain products by rhe Company at Mumbai was sold for a consideration of Rs. 14.11 crores to Purchaser.

The Company has been restricted from exporting the products sold to AIPL under the PTA to all the countries except to 13 countries where they are allowed to export their other products. Profit on sale and export sale of products under the PTA will have to be paid to AIPL.

Note 2

Micro, Small and Medium Enterprises

The company follows a trade policy as determined by them within Purchase Orders/ Sales Order for Trade Payables and Trade Receivables. The company has sent request to its creditors asking them if they are covered under micro small and medium industries. As no confirmation from the creditors were received the company has not classified creditors in to micro, small and medium industries and outstanding payable to them has not been shown separately.

Based on the information available with the Company, there are no dues payable to micro, small and medium enterprises as defined in The Micro, Small & Medium Enterprises Development Act, 2006. This information has been relied upon by the statutory auditors of the Company.

Note 3

Employee Stock Option Plan

a) As per Employee stock options Scheme (Kilitch ESOS 2007), each option is convertible into one equity shares Rs. 10/- each at exercise price of Rs.47.50/- per share. During the year fresh options were not granted and employees did not exercise any options. However, due to separations, 87150 options were surrendered and are available for reissue. 73 employees have been shifted to Akorn India Pvt Ltd after the execution of deal for sale of part of business during the year. As these employees have technically separated from Company due to sale of business, it was decided that options held by them will be available for exercise as long as such employees are in the service of Akorn India Pvt Ltd

b) The employee compensation cost on account of this grant applicable for the year is net of reversal due to separation is write back ofRs. 18,56,764/-.

Note 4

Contingent liabilities to the extent not provided for

(Rs. in lakhs)

2011-12 2010-11

(a) Claims against the company not acknowledged as debt 816.81 -

(b) Guarantees and Letter of credits - 372.72

816.81 372.72

Note 5

Related Party Transactions

Name of the related parties and Nature of Relationship

a) Subsidiary Companies/ Concerns EyeKare Kilitch Ltd.

b) Directors and their Relatives

Mr. Pratap Mehta Chairman

Mr. Mukund Mehta Managing Director and CEO

Mr. Paresh Mehta Jt. Managing Director

Mr. Bhavin Mehta Executive Director

Mr. Divya Mehta Relative of Director

Mrs. Mira B Mehta Relative of Director

Mrs.Nita M. Mehta Relative of Director

Mrs.Nehta P. Mehta Relative of Director

c) Enterprises significantly influenced by Directors and/or their relatives NBZ Pharma Ltd.

J.D. Enterprises Kilitch Co. Pharma Ltd

Note No.6

Segment information

The company is predominantly engaged in Pharmaceutical business and this constitutes the only reportable business segment in accordance with the requirement of Accounting Standard 17- Segment Reporting issued by the Institute of Chartered Accountants of India.

Note No.7

Trade Payable & Trade Receivables

The Trade payables are fully payable by the Company

Trade Receivable : The Trade Receivables, Loan and advance are unsecured and considered good to extent stated in the Note no. 17

Note 8

Previous year figures

Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of financial statements. During the year ended 31 March 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year's figures to conform to this year's classification.


Mar 31, 2011

1) Group / Classification

Previous year's figures have been regrouped and "or" reclassified wherever necessary.

2) Figures in bracket indicate previous year figures

3) Contingent Liabilities not provided for:

(Rs. in Lacs)

Particulars As at 31st March 2011 (2010)

1) In respect of guarantees given by Banks and Counter Guarantees given by the Company 138.39 67

2) In respect of letter of credits 234.33 194

4) Related Party Transactions

Name of the related parties and Nature of Relationship

a) Subsidiary Companies/ Concerns

EyeKare Kilitch Ltd.

b) Directors and their Relatives

Mr. Pratap Mehta Chairman

Mr. Mukund Mehta Managing Director

Mr. Paresh Mehta Jt. Managing Director

Mr. Bhavin Mehta Director

c) Enterprises significantly influenced by Directors and/or their relatives

NBZ Pharma Ltd.

JD. Enterprises

5) Employee Stock Option Plan

The Compensation Committee of the Board allotted 29706 shares during the year on exercise of Employee stock option under Kilitch ESOS 2007. Each option is convertible into one equity share of Rs.10/- each at exercise price of Rs.47.50/- per share.

The employee compensation cost on account of this grant applicable for the year is Rs. 66,94,356 as against Rs.1,00,37,624 accounted in the previous year which was inclusive of Rs.46,47,648 charge for earlier years resulting due to modification in the exercise price during that year.

6) Segment information

The company is predominantly engaged in Pharmaceutical business and his constitutes the only reportable business segment in accordance with the requirement of Accounting Standard 17- Segment Reporting issued by the Institute of Chartered Accountants of India.

7) Sundry Creditors, Debtors , Loans and Advance:

a) Sundry Creditors: The company has sent requests to its creditors asking them if they are covered under micro small and medium industries. As no confirmation from the creditors were received the company has not classified creditors into micro, small and medium industries and outstanding payable to them has not been shown separately. The Sundry creditors are unconfirmed but fully payable and includes Rs.239.75 Lacs Previous year Rs.Nill from Eyekare Kilitch Ltd which is its subsidiary.

b) Sundry Debtors, Loans and Advance : The Sundry Debtors, Loan and advance are unconfirmed, and unsecured but considered good. Amount receivable from a subsidiary company is Rs. NIL.(P.Y 4.13 lacs)


Mar 31, 2010

(A) Contingent Liabilities not provided for:

Rs. in Lacs As at 31* March Particulars 2010 (2009)

1) In respect of guarantees given by Banks and Counter Guarantees given by the Company 67 (62)

2) In respect of letter of credits 194 (154)

(B) Related Party Transactions

Name of the related parties and Nature of Relationship

a) Subsidiary Companies/ Concerns EyeKare Kilitch Ltd.

b) Directors and their Relatives

Mr. Pratap Mehta Chairman

Mr. Mukund Mehta Managing Director and CEO

Mr, Paresh Mehta Managing Director

Mr. Bhavin Mehta Director

(E) Employee Stock Option Plan

The Compensation Committee of the Board granted 1,29,100 options during the year under Kilitch ESOS 2007. Each option is convertible into one equity share of Rs.10/- each at modified exercise price of Rs.47.50/- per share. The options granted would vest over a vesting period of 3 years from the date of grant.

The employee compensation cost applicable is Rs. 1,00,37,624 inclusive of Rs.46,47,648 charges for earlier years resulting due to modification in the exercise price during the year. This working has been done on the basis of net outstanding options and has been computed in accordance with SEB1 (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

(C) Segment information

The company is predominantly engaged in Pharmaceutical business & this constitutes the only reportable business segment in accordance with the requirement of Accounting Standard 1 7- Segment Reporting issued by the Institute of Chartered Accountants of India.

(D) Sundry Debtors and Creditors:

Sundry Creditors: The company has sent request to its creditors asking them if they are covered under micro small and medium industries. As no confirmation from the creditors were received the company has not classified creditors in to micro, small and medium industries and outstanding payable to them has been shown separately. The Sundry creditors are fully payable.

Sundry Debtors, Loans and Advance : The Sundry Debtors, Loan and advance are unsecured and considered good. Rs.4.13 Lacs is receivable from a subsidiary company.( Previous year Nill)

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