Notes to Accounts of Vimta Labs Ltd.

Mar 31, 2023

Nature and purpose of reserves:

Security premium: This is the premium received on issue of equity shares and will be utilised as per the applicable provisions of the Act.

General reserves: This is the amount transferred from retained earnings and will be utilised as per the applicable provisions of the Act.

Retained earnings: This comprises of net accumulated profit of the Company after declaration of dividend.

Other comprehensive income: This comprises of actuarial gain/(loss) [net of taxes] at the end of the reporting period.

Share based payment reserve: This comprises of share options granted by the company to its employees under its share option plan. Refer Note 15 (e) for further details

(a) Terms and conditions of secured rupee term loans and

nature of security

for FY 2022-23

1. i) The working capital term loan from Axis Bank amounting to '' 15.27 Million as at March 31, 2023 (Sanctioned limit of '' 23.90 Million in the FY 202021) under emergency Credit Line Guarantee Scheme is secured by extension of charge (second charge) on existing primary and collateral security and guaranteed by NCGTC.

ii) The above mentioned working capital term loan carries interest at the rate of 9.25% fixed {Prev Year 1 Year MCLR 0.10% i.e., 7.45%} and is repayable in 36 equal monthly installments commencing from March, 2022 (as per sanction letter)

for FY 2021-22

1. i) The working capital term loan from Axis Bank amounting to '' 23.24 Million as at March 31, 2022 (Sanctioned limit of '' 23.90 Million in the FY 202021) under emergency Credit Line Guarantee Scheme is secured by extension of charge (second charge) on existing primary and collateral security and guaranteed by NCGTC.

ii) The above mentioned working capital term loan carries interest at the rate of 1 Year MCLR 0.10% i.e., 7.45% {Prev Year 4% (Repo rate) 3.5% i.e., 7.5% p.a} and is repayable in 36 equal monthly installments commencing from March, 2022 (as per sanction letter)

(b) Terms and conditions of secured foreign currency term

loans and nature of security

1. The foreign currency term loan outstanding from Axis Bank taken for General Capex amounting to '' 55.27 Million (equivalent to USD 0.67222 Million) as at March 31, 2023 (Sanctioned limit of '' 75.00 Million in FY 2020-21 and subsequently converted into FCTL of USD 1.034 Million) is secured by way of first charge to bank on assets created out of Term Loan. This loan is also secured by Second Charge on Current Assets (both present and future) of the company at pari passu basis with HDFC Bank Ltd. The loan is covered by collateral security by way of equitable mortgage of property bearing Plot Nos.141/2 & 142, IDA, Phase -II, Cherlapally, Hyderabad - 500 083, Telangana.

The above mentioned foreign currency term loan carries interest at 12 Months SOFR 275 bps plus 1% per annum (mark up fee upfront) and repayable in 20 equal quarterly installments commencing from March 2022 (as per sanctioned letter).

2. The foreign currency term loan outstanding from Axis Bank taken for E& E Project amounting to '' 74.03 Million (equivalent to USD 0.9004 Million) as at March 31, 2023 (sanctioned limit of '' 150.00 Million in FY 2020-21 and subsequently converted into FCTL of USD

I. 177522 Million) is secured by way of first charge to bank on assets created out of Term Loan. This loan is also secured by Second Charge on Current Assets (both present and future) of the company at pari passu basis with HDFC Bank Ltd. The loan is covered by collateral security by way of equitable mortgage of property bearing Plot Nos.141/2 & 142, IDA, Phase -

II, Cherlapally, Hyderabad - 500 083, Telangana.

The above mentioned foreign currency term loan carries interest at SOFR 275 bps 1.00% per annum(markup fee upfront) and repayable in 20 quarterly installments commencing from March, 2022 (as per sanction letter).

(c) Secured rupee term loans from NBFC:

1. i) The rupee term loan from Cisco Systems Capital India Private Limited amounting to '' Nil as at March 31, 2023 (Sanctioned limit '' 19.24 Million in FY 201920) is secured by way of exclusive charge on assets acquired from such loan by way of hypothecation.

ii) The above mentioned rupee term loan carries an interest at the rate of 5.00% as at March 31, 2023 and is repayable in 12 Quarterly installments commencing from October, 2019.

(d) Unsecured loans from NBFC:

1. The rupee term loan from Cisco Systems Capital India Private Limited amounting to '' 1.53 Million as at March 31, 2023 (Sanctioned limit of '' 8.67 Million in FY 2019-20) carries at NIL interest and is repayable in 20 quarterly installments commencing from September, 2019.

2) The rupee term loan from Cisco Systems Capital India Private Limited amounting to '' 2.35 Million as at March 31, 2023 (Sanctioned limit of '' 9.69 Million in FY 2019-20) carries at NIL interest and is repayable in 20 quarterly installments commencing from January, 2020.

3) The rupee term loan from Cisco Systems Capital India Private Limited amounting to '' 1.42 Million as at March, 31, 2023 (sanctioned limit of '' 4.54 Million in FY 2020-21) carries an interest at the rate of 5.00% as at March 31, 2023 and is repayable in 20 quarterly installments commencing from September, 2019.

(f) Details of working capital limits from banks:

1. The working capital facility from Axis bank amounting '' Nil as at March 31, 2023 (sanctioned limit '' 150 mn) carries an interest of 1 Year MCLR plus spread of 0.80% and is secured by way of first paripassu charge on entire current assets of the company (both present and future) along with HDFC Bank ltd.

2. The working capital facility from HDFC bank amounting '' Nil as at March 31, 2023 (sanctioned limit '' 150 mn) carries an interest of 3 Months T Bill plus spread of 2.67% and is secured by way of first paripassu charge on entire current assets of the company (both present and future) along with Axis bank ltd.

3. First paripassu charge to HDFC bank on Industrial land and building situated at Plot No 141/2 and 142, IDA, Phase -II, Cherlapally, Hyderabad- 500051 as collateral security.

(g) There were no defaults as on balance sheet date In repayment of above borrowings and interest thereon (Period and amount)

(h) The company has used the borrowings from Banks and Financial Institutions for the specific purpose for which it was taken at the Balance sheet date.

(i) For the borrowings from Banks on the basis of security of current assets, the quarterly returns or statements filed by the company with Banks are in agreement with the books of account.

(j) Company is not a declared willful defaulter by any Bank or Financial Institution or other lender.

(k) There are no charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

*i) Waiver of duty of '' 45.19 millions on import of plant and equipment under Export Promotion Capital Goods (EPCG) Scheme relating to duty waiver received in previous years. There are no contingencies attached to these grants except the fulfilment of export obligations. As these grants are relating to Plant and equipments, the same has been capitalised and amortised over the useful life of respective assets.

**ii) The company was granted an in-principle approval of a grant-in-aid of '' 7.1 million during FY 2017-18 by the biotechnology industry research assistance council for project entitled towards preclinical evaluation of clinical grade vaccine. Against this sanctioned amount, so far an amount of '' 2.13 millions was received. Since the terms and conditions are fulfilled during the current year, company has recognized grant income on receipt of the balance grant amount.

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances that derive directly from its operations. The Company also holds investment in its subsidiary.

The carrying amounts of trade receivables, trade payables and cash and bank balances are considered to be the same as their fair values, due to their short-term nature. The difference between carrying amounts and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value. For financial assets measured at fair values, the carrying amounts are equal to the fair values.

33 Financial risk management objectives and policies

The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company''s risk assessment and management policies and processes. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

(i) Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long-term debt. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

a) Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) in United States Dollar (''USD''), Euro (''EUR''), Great Britain Pound (''GBP''), Malaysian Ringgit (''MYR''), Swiss Franc (''SF''),Singapore dollar (''SGD'') Japan Yen (''JY'') , Canadian dollar (''CAD'') and borrowings in USD.

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''s fixed rate borrowings are carried at amortised cost and hence are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. Further, the Company''s investments in deposits is with banks and electricity authorities and therefore do not expose the Company to significant interest rates risk. The company''s main interest rate risk arises from borrowings with variable rates, which expose it to cash flow interest rate risk.

The Company does not have any investments which are classified in the balance sheet either as fair value through OCI or at fair value through profit or loss. Hence, the Company is not exposed to any price risk. ii) Credit risk

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

Trade and other receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. The credit quality of a customer is assessed based on an extensive credit rating scorecard, internal evaluation and individual credit limits. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Collateral held as security and other credit enhancements

The Company does not collect any collateral or other credit enhancements to cover its credit risks associated with its financial assets.

Financial assets that are neither past due nor impaired

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out by the Company in accordance with practice and limits set by the management. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

iv) Excessive risk concentration

Concentrations arise when a number of counter parties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

34 Contingent liabilities & Commitments (to the extent not provided for)
Particulars	As at	As at
	31 March 2023	31 March 2022
A. Contingent liabilities Claims against the Company not acknowledged as debts in respect of: Employees provident fund demand not provided for (pending before the Employees'' Provident Funds Appellate Tribunal)	8.70	8.70
	8.70	8.70
Bank Guarantees excluding financial guarantees	16.18	15.70
Corporate Guarantees given to Subsidary Companies	9.00	-

Note:

(a) Based on the Supreme Court Judgment dated February 28, 2019, the Company was required to reassess the components to be included in the basic salary for the purposes of deduction of Provident Fund. On the basis of legal advice, the management has determined that there is no impact of the aforesaid ruling on the standalone financial statements of the Company.

(b) The Indian Parliament has approved the Code on Social Security,2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security,2020 on November 13, 2020, and has invited suggestions from stakeholders which are unconsideration by the Ministry. The company will assess the impact and and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

(c) Bank Guarantees are issued to meet certain business obligations towards government agencies and certain customers.

(d) The Company has given corporate guarantee of Rs 9.00 million to EMTAC Laboratories Pvt Ltd to the bank for the purpose of working capital sanction during the year.

B. Commitments
Particulars	As at	As at
	31 March 2023	31 March 2022
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	70.27	18.21
C. Impact of pending Litigations:
There are no material pending litigations against the company, which will impact its financial position.
35 Leases
The Company''s significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements are generally cancellable leases which range between 1 years to 5 years and are usually renewable by mutual consent on agreed terms.
Particulars	For the year ended	For the year ended
	31 March 2023	31 March 2022
Total rental expense relating to operating lease	27.40	22.51
- Non-cancellable	-	-
- Cancellable	27.40	22.51

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit

obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed

below:

(a) Asset volatility: The plan liabilities are calculated using a discount rate set with reference to current investment patterns in the economy; if plan assets underperform this yield, this will create a deficit. The plan asset investments are subject to interest rate risk. The Company has a risk management strategy where the aggregate amount of risk exposure is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the investments. The Company intends to maintain the investment pattern in the continuing years.

(b) Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans'' bond holdings.

(c) Life expectancy: The defined benefit obligation is to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans'' liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 3 years (31 March 2022: 3 years).

Expected Contribution to the plan for the next annual period '' 92.96 millions.

(ii) The Company provides for accumulation of compensated absences by certain categories of its employees. These employees can carry forward a portion of their unutilised compensated absences and utilise/encash them in future periods as per the Company''s policy. The Company records a liability for compensated absences in the period in which the employee renders the services that increases this entitlement.

40 Segment Reporting

The Managing Director of the company has been identified as the Chief Operating Decision Maker (CODM) as required by Ind AS 108 Operating Segments. The Company is in the business of providing contract research and testing services. The Managing Director reviews the operations of the Company as one operating segment taking into account the nature of the business, the organization structure, internal reporting structure and risk and rewards. Hence no separate segment information has been furnished herewith.

41 Capital management

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

* As at 31 March 2023 borrowings are lower than the Cash and Cash equivalents and Bank Deposits resulting in a negative net debt.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. Further there were no changes were made in the objectives, policies or processes for managing capital for the year ended March 31, 2023.

c) The Company has given corporate guarantee of '' 9.00 million to EMTAC Laboratories Pvt Ltd to the bank for the purpose of working capital sanction during the year (Previous year - Nil)

d) The Company has not provided any securities during the year (Previous year - Nil)

43 Pursuant to the notification issued by the central government under Foreign Trade Policy 2015-20 vide Notification no 29 dated September 23, 2021 the admissible rate on net foreign earnings has been revised to 5% from 7%. Accordingly, an impact of '' 12.24 million is recognised as an exceptional item during the year ended March 31, 2022.

44 The company has entered into a Public Private Partnership (PPP) agreement with Food Safety and Standards Authority of India (FSSAI) on June 29, 2021 to setup, operate and transfer (SOT) a National food Testing Laboratory (NFL) in JNPT, Mumbai. In accordance with the provisions of Ind AS 115, this arrangement has been considered as a "Service Concessionaire Arrangement" (SCA) and accordingly, revenue and costs are allocatable between those relating to lab setup services and those relating to operation and maintenance services. Further, the Company has acquired the right to charge the customer for the services to be rendered which has been assessed as an intangible asset.

Consequently, the amount of revenues from operations and lab setup expenses includes '' 19.86 million for year ended March 31, 2023 and '' 138.43 million for the year ended March 31, 2022, respectively representing the revenues relating to lab setup services provided under SCA, the costs of fulfilling the contract and the right to charge the customer for the services to be rendered, respectively.

45 Other Statutory Information

(i) The company has no transactions with companies struck off under Sec. 248 of the companies Act, 2013 or Sec. 560 of the Companies Act, 1956.

(ii) The company does not have 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

(iii) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) No Proceeding has been initiated or pending against the company under the Benami Transactions (Prohibition) Act, 1988 and the rules made thereunder.

(v) During the year, no scheme of arrangements has been approved by the competent authority in terms of Sec. 230 to 237 of the Act, in which the company is a party.

(vi) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies) including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vii) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

viii) The company has complied with the number of layers prescribed under Clause 87 of Sec. 2 of the Act read with the Companies (Restriction on number of layers) Rules 2017.

(ix) The company has not granted loans or advances in the nature of loans to the promoters, directors or KMP''s and the related parties as defined in the companies act, 2013 either severally or jointly with any other person that are repayable on demand or without specifying terms or period of repayment.

46 Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year classification and disclosure.

---

Mar 31, 2018

1.Financial risk management

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company’s risk assessment and management policies and processes. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk for the Company comprises primarily of currency and equity risk. Financial instruments affected by market risk include trade and other receivables and derivatives. The sensitivity analyses in the following sections relate to the position as at 31 March 2018 and 31 March 2017.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other postretirement obligations; provisions; and the non-financial assets.

The following assumptions have been made in calculating the sensitivity analyses:

(i) The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018 and 31 March 2017."

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency) in US Dollars (''USD'') and Euro, and foreign currency borrowings in USD.

* Holding all other variables constant

The Company’s investments in term deposits (i.e., certificates of deposit) with banks and therefore do not expose the Company to significant interest rates risk.

b) Credit risk

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

Trade and other receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial assets that are neither past due nor impaired

None of the Company’s cash equivalents, including term deposits (i.e., certificates of deposit) were past due or impaired as at 31 March 2018.

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

Financial instruments and cash deposits

Credit risk from balances with banks is managed by the Company’s finance team in accordance with the Company’s policy. Investments of surplus funds are made only with approved and reputed banks and within credit limits assigned to each bank. The amounts invested and details of relevant banks are reviewed by the Company''s Board of directors on annual basis.

c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out by the Company in accordance with practice and limits set by the management. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

3. Capital management

The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio :

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

4. Related Party disclosures

a) Name of the related parties and nature of relationship

Name of the related parties Nature of relationship

(i) Key Management Personnel

Dr S P Vasireddi Executive Chairman

Harita Vasireddi Managing Director

V Harriman Executive Director - Operations

V V Prasad Executive Director - Admn.

T S Ajai Independent Director

Dr Subba Rao Pavuluri Independent Director (upto 10/10/2017)

Prof D. Balasubramanian Independent Director

Rao Purnachandra Potarlanka Independent Director

V Prameela Rani Independent Director (w.e.f 01/12/2017)

A Venkataramana Company Secretary

Murali Mohana Rao Mokkapati Chief Financial Officer

(ii) Relatives of Key Management personnel

Sireesh Chandra Vungal Son of ED - Operations

Sudheshna Vungal Daughter of ED - Operations

Satya Sreenivas Neerukonda Son-in-law of ED - Admn.

Praveena Vasireddi Daughter of Executive Chairman

Sujani Vasireddi Daughter of ED - Admn.

(iii) Others

Ananth Technologies Limited Public company in which one of the directors of

the company is a director.

41 First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

A. Exemptions and exceptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions.

(i) Deemed cost for property, plant and equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value.

(ii) Estimates

The estimates as at 1 April 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2016 (transition date) and 31 March 2017.

(iii) De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

(iv) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

(v) Business combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

C. Notes to first-time adoption:

(I) Proposed dividend (including dividend distribution tax)

Under Indian GAAP, proposed dividends including dividend distribution tax (DDT) are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of ''.26.60 Millions for the year ended on 31 March 2016 recorded for dividend has been derecognized against retained earnings. Consequently, the total equity increased by an equivalent amount.

(ii) Government grant

Under Indian GAAP, government grants could be recognized under the capital approach or the income approach. However, Ind AS requires government grants to be recognized using the deferred income approach. The Company received a grant of ''.6.64 millions during the year ended 31 March 2017. Consequently, the capital work-in-progress and corresponding deferred grant income has increased by an equivalent amount.

(iii) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind-AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to different temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of ''Nil (1 April 2016 : ''Nil).

(iv) Trade receivables

As per Ind AS 109, the Company is required to apply expected credit loss model for recognizing the allowance for doubtful debts. Under Indian GAAP, the Company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. As per the management''s assessment, due to ECL model, there is no additional impact on the allowance for doubtful debts.

(v) Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under Indian GAAP, these transaction costs incurred in connection with borrowings are amortized and charged to profit or loss thereon over the period of borrowings. There is no impact on borrowings, total equity and profit for the year on account of the aforesaid adjustment.

(vi) Remeasurements of post-employment benefit obligations

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit is reduced by Rs.8.38 Millions (corresponding tax impact of '' 2.90 Million has been considered) and remeasurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.

(vii) Retained earnings

Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.

(viii) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

(ix) Statement of cash flows

The transition from Indian GAAP to Ind AS had no material impact on the statement of cash flows.

---

Mar 31, 2016

Note : Information of related parties and the relationship is as identified by the Company on the basis of information available with them and relied upon by the auditors.

Note : As the liability for Gratuity is provided on actuarial basis for all the employees of the company including whole-time directors as a whole, amount pertaining to the Key Management Personnel and their relatives is not ascertainable and therefore not included in the above.

1.. Leases (AS-19) :

The Company has taken certain equipment under non canceleable operating lease agreements for a period of 36 months. The lease rental charge grouped under operating lease charges during the year ended March, 2016 is Rs.1,29,250/-(Previous year Rs.627,828/-) and maximum obligation on long-term non-cancelable operating lease payable as per the rentals stated in respective agreements are as follows :

2. Corporate Social Responsibility (CSR) : To comply with the Corporate Social Responsibility (CSR) requirements under the provisions of Section 135 (5) of the Companies Act, 2013 read with the Rules made there under, the Company has determined the eligible amount at Rs.18,96,478/- being the 2% of the average net profits of the Company in the three immediately preceding years. Against which, an amount of Rs.19,59,714/- (including Rs.63,236/- balance amount to be spent against previous year''s obligation) contributed during the year to Charitable Trusts for carrying out the activities specified by the Board and charged the same to statement of Profit and Loss.

3. Previous year''s figures have been regrouped / recasted wherever considered necessary to conform to the layout of the accounts adopted in the current year. Paise have been rounded off to the nearest rupee.

---

Mar 31, 2015

I) Cash credit from State Bank of India (Limit) Rs. 9,00,00,000/- (previous year Rs. 13,00,00,000/-) carrying interest @ 3.75% above base rate for CC (Hyp.) and for EPC and FBD as applicable to export finance(i.e., 3 Months average LIBOR 150 basis points), is secured by First charge (hypothecation) of all the current assets of the Company on exclusive basis as primary security and collaterally secured by extension of charge on the fixed assets of the Company and structures thereon alongwith EM of Company's land under Plot No. 141/2 & 142 admeasuring 1.66 Ac. situated at IDA, Phase-II, Cherlapally, R.R. Dist. and land under Plot No.5, Alexandria Knowledge Park, Phase-I admeasuring 52620 sq. yards situated at Turkapally Village, Shameerpet Mandal, R.R. Dist.

ii) There are no defaults as on the Balance Sheet date in repayment of the above loan and interest thereon.

2.1 Related party disclosures (AS-18)

Names of the Key Management Personnel related parties, nature of relationships and particulars of transactions with the said related parties during the year are as follows :

i) Names of the related parties and description of relationship.

A) Key Management Personnel

Dr S P Vasireddi Executive Chairman

Harita Vasireddi Managing Director

V Harriman Executive Director - Operations

V V Prasad Executive Director - Administration

A Venkataramana Company Secretary

Sankaraiah Peram Chief Financial Officer

B) Relatives of Key Management Personnel

Swarnalatha Vasireddi Wife of Executive Chairman

Sireesh Chandra Vungal Son of ED - Operations

Sudheshna Vungal Daughter of ED - Operations

Satya Sreenivas Neerukonda Son-in-Law of ED - Administration

Rajeswari Vungal Wife of ED - Operations

Praveena Vasireddi Daughter of Executive Chairman

C) Other related parties Ananth Technologies Limited (Companies in which Bloomedha Info Solutions Limited some of the Directors or other relatives are interested)

Note : Information of related parties and the relationship is as identified by the Company on the basis of information available with them and relied upon by the auditors.

ii) Aggregate Related Party transactions for the year 2013-14

Note : As the liability for Gratuity is provided on actuarial basis for all the employees of the company including whole-time directors as a whole, amount pertaining to the Key Management Personnel and their relatives is not ascertainable and therefore not included in the above.

2.2. Leases (AS-19) :

The Company has taken certain equipment under non canceleable operating lease agreements for a period of 36 months. The lease rental charge grouped under operating lease charges during the year ended March, 2015 is Rs. 627,828/- (Previous year Rs. 17,351,782/-) and maximum obligation on long- term non-cancelable operating lease payable as per the rentals stated in respective agreements are as follows :

Note : The Company's appeals against the orders of Commissioner of Service Tax , Hyderabad - III for the financial years 2005-06 to 2009-10 and 2010-11 before the CESTAT, South Zone Bench, Bangalore were disposed in favour of the Company.

3. Corporate Social Responsibility (CSR) : To comply with the Corporate Social Responsibility (CSR) requirements under the provisions of Section 135 (5) of the Companies Act, 2013 read with the Rules made, thereunder, the Company has determined the eligible amount at Rs. 4,67,236/- being the 2% of the average net profits of the Company in the three immediately preceding years. Against which, an amount of Rs. 4,04,000/- contributed during the year to Charitable Trust for carrying out the activities specified by the Board and charged the same to statement of P&L .

4. Previous year's figures have been regrouped / recasted wherever considered necessary to conform to the layout of the accounts adopted in the current year. Paise have been rounded off to the nearest rupee.

---

Mar 31, 2014

1. As at As at 31.03.2014 31.03.2013 Rs. Rs.

1) CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

I) Contingent liabilities

a) Claims against the company not acknowledged as debt : i) Disputed service tax demand for the year 2005-06 to 2009-10 277,846,538 277,846,538

ii) Disputed service tax deducted for the year 2010-11 60,335,240 60,335,240

iii) Disputed Lease charges on equipment Nil 15,476,286

b) Guarantees issued by bank 1,36,58,296 12,594,172

II) Commitments b) Other Comitantes : a) Future minimum lease payments under operating lease 646,250 1,412,953

TOTAL 352,486,324 367,665,189

i) The Company has filed appeal and for stay of demand against the order of Commissioner of Service Tax, Hyderabad-III against the Service Tax demand of Rs.277,846,538/- (Service tax of Rs.138,923,269/- & penalty of Rs.138,923,269/-) for financial year 2005-06 to 2009-10 before the CESTAT, South Zonal Bench, Bangalore. The CESTAT has directed the company to pay an amount of Rs.20,000,000/- and granted stay for the balance demand. Accordingly, company has paid the same and the appeal is pending disposal. The legal counsel has confirmed the validity of the Company''s claim. Hence, the same is shown as a contingent liability.

ii) The Company has filed appeal and for stay of demand against the order of commissioner of Service Tax, Hyderabad - III against the Service Tax demand of Rs.60,335,240/- (Service tax of Rs.30,167,620/- and penalty of Rs.30,167,620/-) for financial year 2010-11 before the CESTAT, South Zonal Bench, Bangalore. On appeal, the CESTAT has stayed the demand and the appeal is pending disposal. The legal counsel has confirmed the validity of the Company''s claim. Hence, the same is shown as a contingent liability.

---

Mar 31, 2013

I) Cash credit from State Bank of India (Limit) Rs. 130,000,000/- (previous yearRs.. 110,000,000/-) carrying interest @ 7% above base rate for CC(Hyp.) and 2.75% above base rate for EPC and FBD, is secured by First charge (hypothecation) of all the current assets of the Company on exclusive basis as primary security and collaterally secured by extension of charge on the fixed assets of the Company and structures thereon along with EM of Company''s land under Plot No. 141/2 & 142 admeasuring 1.66 Ac. situated at IDA, Phase-ll, Cherlapally, R.R. Dist. and land under Plot No.5, Alexandria Knowledge Park, Phase-1 admeasuring 52620 sq. yards situated at Turkapally Village, Shameerpet Mandal, R.R. Dist.

ii) Working capital facility from HSBC Ltd (consisting of PCFC loan and Vendor Finance repayable in foreign currency and Indian Rupees respectively) carried interest @ LIBOR 3.67% and 14% per annum is secured by first pari passu charge on entire current assets of the company both present and future and second pari passu charge on movable fixed assets of the company both present and future.

iii) There are no defaults as on the Balance Sheet date in repayment ofthe above loans and interest thereon.

iv) Corporate Loan from State Bank of India carrying interest @7% above base rate, is secured by First charge on fixed assets of the company and structures thereon along with EM of company''s land under Plot No. 141/2 & 142 admeasuring 1.66 Ac. situated at IDA, Phase-ll, Cherlapally, R.R. Dist. and land under Plot No.5, Alexandria Knowledge Park, Phase-1 admeasuring 52620 sq. yards situated atTurkapally Village, Shameerpet Mandal, R.R. Dist. The loan is repayable in monthly installments of Rs..5,00,000/- each.

v) Term Loan from The Hongkong and Shanghai Banking Corporation Limited (HSBC Bank) repayable in foreign currency was secured by pari passu charge on entire movable and immovable fixed assets of the company, both present and future as primary security and extension of pari passu charge on entire current assets of the company both present and future. The loan amount was carrying interest of LIBOR 65 bps to 150 bps repayable in quarterly installments as per the sanctioned letter. The entire loan amount was repaid before the end of the year.

As at As at 31.03.2013 31.03.2012 Rs. Rs.

1) CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

1.1 Contingent liabilities

a) Claims against the company not acknowledged as debt:

i) Disputed service tax demand for the year 2005-06 to 2009-10 277,846,538 277,846,538 (See note (a) below)

ii) Disputed service tax deducted for the year 2010-11 60,335,240 - (See note (b) below)

iii) Disputed Lease charges on equipment 15,476,286 -

b) Guarantees issued by bank . 12,594,172 16,174,626

1.2 Commitments

a) Future minimum lease payments under operating lease 1,412,953 25,950,271

TOTAL 367,665,189 319,971,435

#The Company has filed an appeal and for stay of demand against the order of Commissioner of Service Tax, Hyderabad-Ill against the demand ofRs.. 277,846,538/-(Service tax ofRs.. 138,923,269/-and penalty ofRs.. 138,923,269/-) before the CESTAT, South Zonal Bench, Bangalore. The CESTAT has directed the company to pay an amount of Rs..20,000,000/- after hearing the stay of demand petition and company has paid Rs.. 20,000,000/-as per the above order. The appeal is pending for disposal. The legal counsel has confirmed the validity of the Company''s claim. Hence no provision is made for this liability.

The Company has filed an appeal against the order of commissioner of Service Tax, Hyderabad - III against the demand of Rs.. 60,335,240/- (Service tax ofRs.. 30,167,620/- and penalty ofRs.. 30,167,620/-) before the CESTAT, South Zonal Bench, Bangalore. The appeal is pending for disposal. The legal counsel has confirmed the validity of the Company''s claim. Hence no provision is made for this liability.

---

Mar 31, 2012

1) LONG-TERM BORROWINGS

i) Corporate Loan from State Bank of India was secured by hypothecation of equipment procured with the loan as primary security and extension of pari passu charge on other fixed assets of the Company, other than the assets which were acquired with Hire Purchase loans, Grants and Soft loans from Government and other institutions. The loan was also secured by second charge on current assets of the company on pari passu basis. The loan was carrying interest of 16.75% repayable in monthly installments of Rs. 5,00,000/- each.

ii) Term Loan from The Hongkong and Shanghai Banking Corporation Limited (HSBC Bank) repayable in foreign currency was secured by pari passu charge on entire movable and immovable fixed assets of the company, both present and future as primary security and extension of pari passu charge on entire current assets of the company both present and future. The loan amount was carrying interest of LIBOR plus 65 bps to 150 bps, repayable in quarterly installments as per the sanction letter.

Note: There are no continuing defaults as on the Balance sheet date in repayment of all the above loans and interest thereon.

2) SHORT TERM BORROWINGS

i) Cash credit from State Bank of India (limit) Rs. 110,000,000 (Previous Year Rs. 120,000,000) carried interest @ 16.75% and secured by hypothecation of all the current assets of the Company as primary security by way of pari passu charge and extension of parri passu charge on land, buildings and fixed assets of the company, other than the assets which are acquired with Hire Purchase loans, Soft loan from Technology Development Board and grants from Government and other Institutions.

ii) Working capital facility from HSBC Bank (consisting of PCFC loan and Vendor Finance repayable in foreign currency and Indian Rupees respectively) carried interest @ LIBOR plus 3.67% and 14% per annum is secured by first pari passu charge on entire current assets of the company both present and future and second pari passu charge on movable fixed assets of the company both present and future.

iii) There are no continuing defaults as on the Balance sheet date in repayment of the above loans and interest thereon.

3.1 Related party disclosures (AS-18)

Names of the related parties and nature of relationships and particulars of transactions with the said related parties during the year are as follows :

i) Names of the related parties and description of relationship.

A) Key Management Personnel

Dr S P Vasireddi Chairman & Managing Director

V Harriman Director-Technical

V V Prasad Executive Director

Harita Vasireddi Director-Quality

B) Relatives of Key Management Personnel

Swarnalatha Vasireddi Wife of Managing Director

Sireesh Chandra Vungal Son of Director Technical

Sujani Vasireddi Daughter of Executive Director

Satya Sreenivas Neerukonda Son-in-Law of Executive Director

Rajeswari Vungal Wife of Director Technical

C) Associates Vimta Specialities Limited

D) Other related parties Ananth Technologies Limited Bloomedha Info Solutions Limited

Note : Information of related parties and the relationship is as identified by the Company on the basis of information available with them and relied upon by the auditors.

4.1. Leases (AS-19) :

The Company has taken certain equipment under non canceleable operating lease agreements for a period of 36 months. The lease rental charge grouped under operating lease charges during the year ended March, 2012 is Rs. 2,02,02,764/- (Previous year Rs. 2,30,39,190/-) and maximum obligation on long-term non-cancelable operating lease payable as per the rentals stated in respective agreements are as follows:

---

Mar 31, 2011

1. Secured Loans

I) Cash credit from State Bank of India - limit ` 1200 lakhs,

Outstanding -Rs.1323.17 lakhs (previous year Rs. 900 lakhs and Rs. 1021.44 lakhs respectively) is secured by hypothecation of all the current assets of the Company as primary security by way of pari passu charge and extension of pari passu charge on land, buildings and fixed assets of the Company, other than the assets which are acquired with Hire Purchase loans, Soft loan from Technology Development Board and grants from Government and other Institutions.

ii) Corporate Loan from State Bank of India limit Rs. 250 lakhs; outstanding Rs. 75.77 lakhs (previous year Rs. Nil) is secured by hypothecation of equipment procured with the loan as primary security and extension of pari passu charge on other fixed assets of the Company other than the assets which are acquired with Hire Purchase loans, Technology Development Board and Grants from Government and other institutions. In addition, also secured by second charge on current assets on pari passu basis.

iii) Term Loan from The Hongkong and Shanghai Banking Corporation Limited (HSBC Bank) repayable in foreign currency limit of Rs. 1000 lakhs and outstanding Rs. 546.71 lakhs (previous year Rs. 1000 lakhs and Rs. 887.02 lakhs respectively) is secured by pari passu charge on entire movable and immovable fixed assets of the Company, other than the assets which are acquired with Hire purchase loans, Soft loan from Technology Development Board and Grants from Government and other Institutions both present and future as primary security and extension of pari passu charge on entire current assets of the Company both present and future.

iv) Working capital facility from HSBC Bank aggregating is Rs.650 lakhs (consisting of PCFC loan and Vendor Finance repayable in foreign currency and Indian Rupees), outstanding of ` 472.88 lakhs repayable in Foreign Currency and Rs. Nil in Indian Rupees (Previous year Rs. 473.38 lakhs repayable in foreign currency and Rs. 114.11 lakhs in Indian rupees) is secured by first pari passu charge on entire current assets of the Company other than the assets which are acquired with Hire purchase loans, Soft loan from Technology Development Board and Grants from Government and other Institutions both present and future and second pari passu charge on movable fixed assets of the Company both present and future.

v) Soft loan from Technology Development Board, Limit Rs. 485 lakhs, outstanding Rs. 107.98 lakhs, (previous year Rs. 485 lakhs and ` 243.98 lakhs respectively) is secured by hypothecation of plant and equipment procured with the said loan.

2. Current Liabilities and Provisions

a) Sundry Creditors

I) Amounts due to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in schedule 8, Current Liabilities) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and small enterprises as at 31st March, 2011 are as under :-

Note : Information on SSI Units and the Units covered under Micro, Small and Medium Enterprise Development Act, 2006 is based on the information collected by the Management from the vendors and relied upon by the auditors.

b) Service Tax Demand

Out of the Service tax demand of Rs. 68.86 lakhs raised on the Company in earlier years, the Commissioner (Appeals) - III gave a relief of Rs. 65.17 lakhs to the Company. For the balance demand of Rs. 3.69 lakhs, the Company has filed an appeal before CESTAT, South Zonal Branch, Bangalore and the appeal is pending before them. The legal counsel has confirmed the validity of the Company's claim. Hence no provision is made for this liability. It is shown as a contingent liability. (Refer Sch.10)

c) Export Obligations

In order to obtain Import Licenses under the Export Promotion Capital Goods Scheme of Government of India, the Company has given an undertaking to fulfill certain quantified export obligations. In case of non-fulfillment of such obligations, the Company shall be liable to pay the concessions in duty availed and interest on unfulfilled export obligations under the said scheme. Till 31.03.2011, the Company has fulfilled the required export obligations under the scheme and hence no liability is foreseen on account of this. Accordingly no liability is provided for on account of this.

d) Cess U/s.441A of Companies Act, 1956 As the Central Government has not yet notified the date for levy of Cess u/s 441A of the Companies Act, 1956, no provision has been made for the same.

e) Foreign currency exposure not hedged : Foreign currency exposure not hedged by a derivative instrument or otherwise on account of Borrowings from Banks, including interest accrued thereon - USD 2293720 (Previous year USD 3050001).

3. Current Assets, Loans & Advances : In the opinion of Management, Current Assets, Loans & Advances have a value and realization will be equal to the amount at which they are stated in the Balance Sheet and provision for all known unrecoverable items has been made.

4. Related party disclosures

Pursuant to Accounting Standard-18 (AS-18) issued by the ICAI, the names of the related parties and nature of relationships and particulars of transactions with the said related parties during the year are as follows :

i) Names of the related parties and description of relationship.

A) Key Management Personnel

Dr S P Vasireddi Chairman & Managing Director V Harriman Director - Technical V V Prasad Executive Director Harita Vasireddi Director - Quality

B) Relatives of Key Management Personnel

V Swarnalatha General Manager V Sireesh Chandra Manager-IT V Sujani Asst. Manager-Fin. & Admn. N Satya Sreenivas Manager-BD. V Rajeswari Owner of Chennai Office Premises

C) Associates Vimta Specialities Limited

D) Other related Ananth Technologies Limited Parties L V Prasad Eye Institute

Note : Information of related parties and the relationship is as identified by the Company on the basis of information available with them and relied upon by the auditors.

As the liability for Gratuity is provided on actuarial basis for all the employees of the Company as a whole, the amount pertaining to the Key Management Personnel and their relatives is not ascertainable and therefore not included above.

5. Operating Leases :

The Company has taken certain equipment under non cancelable operating lease agreements for a period of 36 months. The lease rental charge grouped under operating lease charges during the year ended March, 2011 is Rs. 230.39 lakhs (Previous year Rs. 22.04 lakhs) and maximum obligation on long-term non-cancelable operating lease payable as per the rentals stated in respective agreements are as follows :

e) Value of all imported and indigenous raw materials, spare parts & components consumed during the year and the percentage of each to the total consumption

The Company is not carrying on any manufacturing activities but engaged in the business of Contract Research and Testing in the fields of Clinical and Pre Clinical Studies, Clinical Reference, Analytical Testing, Advanced Molecular Biology and Environmental studies. The Company’s business requires variety of chemicals and consumables in small quantities and does not require any raw materials. It is not practicable to furnish the quantitative details of these chemicals & consumables as number of small quantities are consumed. Hence, aggregate value of all imported and indigenous chemicals & consumables and spares & components consumed and the percentage of each to the total consumption are furnished below :

6. Information to be furnished under Sec. 22 of Micro, Small and Medium Enterprises Development Act, 2006 in relation to dues and interest payable on the dues to micro, small and medium enterprises is — Nil

7. As per the provisions of Income tax Act, 1961 applicable for the current year, no tax needs to be deducted at source from the proposed dividend on equity shares.

8. Previous year's figures have been regrouped / recasted wherever considered necessary to conform to the layout of the accounts adopted in the current year.

9. Paise are rounded off to the nearest rupee.

10. Information pursuant to the provisions of part IV of schedule VI of the companies Act, 1956.

---

Mar 31, 2010

1. Secured Loans

i) Cash credit limit ` 900 lakhs, Outstanding - ` 1021.44 lakhs (previous year ` 1000 lakhs and ` 1095.23 lakhs respectively) from State Bank of India is secured by hypothecation of all the current assets of the Company as primary security by way of pari passu charge and extension of parri passu charge on land, buildings and fixed assets of the company, other than the assets which are acquired with Hire Purchase loans, Soft loan from Technology Development Board and grants from Government and other Institutions.

ii) Term Loans repayable in foreign currency from State Bank of India (limit ` 3300 lakhs; outstanding ` NIL lakhs) (previous year ` 3300 lakhs and ` 868.92 lakhs respectively) are secured by equitable mortgage of land and hypothecation of buildings situated at Plot Nos. 141/2 & 142, IDA Phase II, Cherlapally, Hyderabad and Plot No: 5, Alexandria Knowledge Park (formerly known as S P Bio-Tech Park), Genome Valley, Hyderabad and hypothecation of equipment procured with the term loans as primary security by way of pari passu charge and extension of pari passu charge on other fixed assets of the Company situated at other places, other than the assets which are acquired with Hire Purchase loans, Grants and Soft loans from Government and other institutions.

iii) Term Loan repayable in foreign currency from The Hongkong and Shanghai Banking Corporation Limited (HSBC Bank) limit of ` 1000 lakhs and outstanding of ` 887.02 lakhs (previous year ` 1000 Lakhs and ` 154.64 lakhs respectively) is secured by pari passu charge on entire movable and immovable fixed assets of the company, both present and future as primary security and extension of pari passu charge on entire current assets of the company both present and future.

iv) Working capital facilities from HSBC Bank aggregating is ` 650 lakhs consisting of PCFC loan and Vendor Finance repayable in foreign currency and Indian Rupees respectively, outstanding of ` 473.39 lakhs in Foreign Currency and ` 114.12 lakhs in Indian Rupees aggregating to ` 587.51 lakhs (Previous year ` Nil) is secured by first pari passu charge on entire current assets of the company both present and future and second pari passu charge on movable fixed assets of the company both present and future.

v) Soft loan from Technology Development Board, Limit ` 485 lakhs, outstanding ` 243.98 lakhs, (previous year ` 485 lakhs and ` 343.51 lakhs respectively) is secured by hypothecation of plant and equipment procured with the said loan.

2. Current Liabilities and Provisions

a) Sundry Creditors

i) Name(s) of small scale industrial undertakings to whom the Company owe any sum together with interest outstanding for more than 30 days - Nil (Previous year Nil)

ii) The amount due to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in schedule 8, Current Liabilities) has been determined to the extent such parties have been identified on the basis of information available with the company. The disclosures relating to Micro and small enterprises as at 31st March, 2010 are as under :-

(in Rs.)

Sl. Description As at As at No. 31.03.2010 31.03.2009

1. The principal amount remaining

unpaid at the end of accounting year Nil Nil

2. The interest due thereon remaining

unpaid to supplier as at the end of Nil Nil

accounting year

3. The amount of interest paid in terms of

Section 16, along with the amount of the Nil Nil

payment made to the supplier beyond

the appointed day during the year.

4. The amount of interest due and

payable for the period of delay in Nil Nil

making payment (which have been paid

but beyond the appointed day during

the year) but without adding the interest

specified under this act.

5. The amount of interest accrued

during the year and remaining unpaid Nil Nil

at the end of the accounting year.

6. The amount of further interest

remaining due and payable even in the Nil Nil

succeeding years, until such date when

the interest dues as above are actually paid to the small enterprises, for the

purpose of disallowance as a

deductable expenditure under Sec. 23.



Note : Information on SSI Units and the Units covered under Micro, Small and Medium Enterprise Development Act, 2006 is based on the information collected by the Management from the vendors and relied upon by the auditors.

b) Income Tax Demand

An aggregate demand of Rs. 89.90 lakhs has been raised on the Company in the Income-tax assessments completed for assessment years 2002-03 to 2004-05, rejecting the claim of the Company for deduction of income from exports from its total income. The Companys legal counsel has confirmed the validity of the deductions claimed by the Company. The Company has deposited the demands in full under protest and disputed before the Appellate Authorities and the same are pending before ITAT, Hyderabad as on date. In view of the above, no provision is made for the said demand of Rs. 89.90 lakhs in the books of account. The same is reflected in the contingent liabilities.(Refer Sch. 10)

c) Service Tax Demand

A Service tax demand of Rs. 68.86 lakhs has been raised on the company for the period from 01.04.2003 to 31.01.2006 and the company has contested the same before Commissioner (Appeals) - III and got a relief of Rs. 65.17 lakhs. For the balance demand of Rs.3.69 lakhs, the Company has filed an appeal before CESTAT, South Zonal Branch, Bangalore and the appeal is pending before them. The legal counsel has confirmed the validity of the companys claim. Hence no provision is made for this demand liability. It is shown as a contingent liability.(Refer Sch.10)

d) Export Obligations

In order to obtain Import Licenses under the Export Promotion Capital Goods Scheme of Government of India, the Company has given an undertaking to fulfill certain quantified export obligations. In case of non-fulfillment of such obligations, the Company shall be liable to pay the concessions in duty availed and interest on unfulfilled export obligations under the said scheme. Till 31.03.2010, the Company has fulfilled the required export obligations under the scheme and hence no liability is foreseen on account of this. Accordingly no liability is provided for on account of this.

e) Cess U/s.441A of Companies Act, 1956

As the Central Government has not yet notified the date for levy of Cess u/s 441A of the Companies Act, 1956, no provision has been made for the same.

f) Foreign currency exposure not hedged :

Foreign currency exposure not hedged by a derivative instrument or otherwise on account of Borrowings from Banks, including interest accrued thereon - USD 3050001 (Previous year USD 2109000).

3. Current Assets, Loans & Advances : In the opinion of Management, Current Assets, Loans & Advances have a value and realization will be equal to the amount at which they are stated in the Balance Sheet and provision for all known unrecoverable items has been made.

5. Related party disclosures

Pursuant to Accounting Standard-18 (AS-18) issued by the ICAI, the names of the related parties and nature of relationships and particulars of transactions with the said related parties during the year are as follows :

i) Names of the related parties and description of relationship.

A) Key Management Personnel

Dr S P Vasireddi Chairman & Managing Director

V Harriman Director - Technical

V V Prasad Executive Director

Harita Vasireddi Director - Quality

B) Relatives of Key Management Personnel

V Swarnalatha General Manager

V Sireesh Chandra Manager-II

V Sujani Asst. Manager-Fin. & Admn.

N Satya Sreenivas Manager-BD.

V Rajeswari Owner of Chennai Office Premises

C) Associates Vimta Specialities Limited

D) Other related parties Ananth Technologies Limited

L V Prasad Eye Institute

Note : Information of related parties and the relationship is as identified by the Company on the basis of information available with them and relied upon by the auditors.

e) Value of all imported and indigenous raw materials, spare parts & components consumed during the year and the percentage of each to the total consumption

f) Managerial Remuneration

Notes:

i) The above amount consists of remuneration paid up to 25.03.2010 in accordance with the terms of appointment approved by the members in the general meeting held on 19.09.2009 and for the balance period in accordance with the terms of appointment approved by the Board in its meeting held on 26.03.2010, which requires approval of shareholders by way of Special resolution.

ii) As the net profit computed in accordance with the provisions of Sec.349 of the Companies Act, 1956 is inadequate to pay the remuneration and commission to the Managing and other whole-time directors as per Section 198, minimum remuneration permissible under Clause B of Section II of Part II of Schedule XIII to the Companies Act, 1956 is paid.

iii) Perquisites include Companys contribution towards PF and other non-monetary benefits valued as per Income Tax Rules.

iv) As the liability for Gratuity is provided on actuarial basis for all the employees of the company as a whole, the amount pertaining to the Directors is not ascertainable and therefore not included above.

6. Information to be furnished under Sec. 22 of Micro, Small and Medium Enterprises Development Act, 2006 in relation to dues and interest payable on the dues to micro, small and medium enterprises is — Nil

7. As per the provisions of Income tax Act, 1961 applicable for the current year, no tax needs to be deducted at source from the proposed dividend on equity shares.

8. Previous years figures have been regrouped / recasted wherever considered necessary to conform to the layout of the accounts adopted in the current year.

9. Paise are rounded off to the nearest rupee.

10. Information pursuant to the provisions of part IV of schedule VI of the companies Act, 1956.