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Notes to Accounts of Caplin Point Laboratories Ltd.

Mar 31, 2023

(i) The title deeds of immovable properties included in fixed assets are held in the name of the Company, except for a land and building for '' 17.38 Crores purchased by the Company during the financial year 2020-21 through e-auction from Punjab National Bank under the SARFAESI Act, 2002 and rules thereof, for which the transfer of title is in progress. In respect of immovable properties taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company.

(ii) Gross Block for 31st March 2023 includes '' 4.86 Crores (PY: '' 4.86 Crores) of government grant in the nature of waiver of duty on purchase of plant and machinery & lab equipment. Accumulated Depreciation for Plant & Machinery as at 31st March 2023 includes '' 3.06 Crores (PY: '' 2.19 Crores) on such government grant.

(i) The title deeds of immovable properties included in fixed assets are held in the name of the Company, except for one property (land and factory building) for '' 17.38 Crores purchased by the Company during the financial year 2020-21 through e-auction from Punjab National Bank under the SARFAESI Act, 2002 and rules thereof, for which the transfer of title is in progress. In respect of immovable properties taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company.

(ii) Gross Block for 31st March 2022 includes '' 4.86 Crores (PY: '' 4.86 Crores) of government grant in the nature of waiver of duty on purchase of plant and machinery & lab equipments. Accumulated Depreciation for Plant & Machinery as at 31st March 2022 includes '' 2.19 Crores (PY: '' 1.37 Crores) on such government grant.

(i) The Shares of Company''s Subsidiary entity in Colombia namely Caplin Point laboratories Colombia, SAS has been transferred to the Company''s wholly owned subsidiary Caplin Point Far East Limited on 28th March 2023

(ii) The ESOP''s issued by the Company to the employees of its subsidiary amounting to '' 1.39 Cr (PY: '' 4.50 Cr) is considered as part of its cost of investment.

(iii) The Company''s Associate entity in China namely Hainan Jointown Caplinpoint Pharmaceutical Company Limited has since been liquidated and the amount invested by the Company in this joint venture has been received in full in FY 22-23.

b) Rights, preference & restrictions attached to shares Equity Shares

The Company has only one class of equity shares having a par value of '' 2/- per share. Each holder of equity share is entitled to one Vote per Share.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

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

Nature of Reserve

a) Capital Reserve

The Capital Reserve has been created on restructuring of the Capital of the Company under a scheme of amalgamation.

b) Securities Premium

Securities Premium account has been created on issue of shares under employee stock option scheme.

c) General Reserve

The General Reserve is created by time to time transfer of profits from retained earnings for appropriation purposes. As the General Reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to the statement of profit and loss.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

NOTE 36: BALANCES WITH SCHEDULED BANKS IN DEPOSIT ACCOUNTS INCLUDES:

(a) Bank Deposit Accounts under Note no: 11 for the current year include '' 4.68 Crores (as at 31.03.2022''0.02 Crores) earmarked as lien towards Margin for Letter of Credit and Bank Guarantee .

NOTE 37: EMPLOYEE BENEFITS(i) Defined Contribution Plan:

Contributions to defined contributions schemes as employees'' state insurance, labour welfare fund, etc are charged as expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company''s provident fund contributions is made to a Government administered fund and charged as expense to the Statement of Profit and Loss. The contributions payable to these plans are at the rates specified in the rules of the schemes.

The Company recognized '' 1.94 Crores (Previous year '' 1.70 Crores ) towards provident and pension fund contributions, '' 0.22 Crores (previous year '' 0.18 Crores) towards ESI in the Statement of Profit and Loss. (refer Note-28 & 40)

(ii) Defined Benefit Plan:a. Gratuity

The Company has an obligation towrads gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contributions to Life Insurance Corporation of India (LIC). The Company accounts for the liability for gratuity benefits payable in the future based on acturial valuation

b. Compensated Absences

The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows.

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Longevity risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years.

FINANCIAL INSTRUMENTS:NOTE 45: FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT A. Accounting classification and fair values:

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

The Company''s board of directors have overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management framework. The Company''s risk management policies are established to set appropriate risk limits and to monitor risks and adherence to limits. risk management policies and systems are reviewed periodically to reflect changes in market condition and the Company''s activities. The Company through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

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

i. Credit Risk:

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of the customers to which the Company grants credit terms in the normal course of business.

Trade Receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants the credit terms in the normal course of business.

Expected credit loss assessment

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g timeliness of payments, available information, etc) and applying experienced credit judgement.

Exposures to the customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses, if any. Historical trends of impairment of trade receivables reflects no credit losses. Given that the macroecomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of “no credit loss” to continue.

No allowance for impairment in respect trade and other receivables was provided during the year and immediate preceding year.

Cash and cash equivalents

As at the year end, the Company held cash and cash equivalents of '' 122.02 Crores (31.03.2022''81.01 Crores). The cash and cash equivalents are held with banks with good credit rating.

Other Bank balances

As at the year end, the Company held other Bank balance of '' 149.36 Crores (31.03.2022''235.07 Crores). The balances are held with banks with good credit rating.

Investment in mutual funds & Corporate Bonds

As at the year end, the Company held Investment in Mutual Fund & Corporate Bonds of '' 227.47 Crores (31.03.2022''86.98 Crores).The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non - performance by these counter-parties.

Other financial asset

As at the year end, the Company held Inter Corporate Deposits/Bank Deposits of '' 51.01 Crores (31.03.2022''142.50 Crores) under other financial asset.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The company was sanctioned working capital limits to the extent of '' 57.6 crores on the basis of security of Land and Factory building and Current Assets by various Banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds which carry no/low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintain financial flexibility.

iii) 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 receivable and payable. We are exposed to market risk primarily related to foreign exchange rate risk as the Comapny''s product is exported to various countries and a certain portion of its export is sourced thorough import. Thus our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company does not use any derivative to manage market risk since certain degree of a natural hedge available in the form of foregin currency realised from exports are paid against imports.

Currency risk

The Company is exposed to currency risk on account of its export and import of pharmaceuticals and import of raw material, capital goods,etc. The functional currency of the Company is Indian Rupee, where as majority of its export and imports are settled through USD($).

Sensitivity analysis

A reasonable strengthening (weakening) of the Indian Rupee against US dollars as at March 31 would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amount shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

1% appreciation / depreciation of the respective foreign currencies with respect to functional currency of the Company would result in increase / decrease in the profit before taxes by approximately '' 1.01 Crore for the year ended March 31, 2023 ('' 0.56 Crores for the year ended March 31, 2022)

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/ borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

As on 31 March 2023 and 31 March 2022, the Company has not availed any long term borrowings except for loans on certain vehicles in previous year on fixed rate basis.Further, the Company has not availed any fund based working capital lines.

Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, change in interest rates at the reporting date would not affect profit or loss.

Commodity rate risk

The Company''s operating activity involve purchase of Active Pharmaceutical Ingredients (API) and other direct materials, whose prices are exposed to the risk of fluctuation over short period of time. The commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As on 31 March 2023, 31 March 2022, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

NOTE 47: CAPITAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on the capital as well as the level of dividends to ordinary shareholders.

As on date the Company has no borrowings.

NOTE 48: SEGMENT REPORTING

The company is engaged in manufacture of pharmaceuticals formulations which is the only business segment determined in accordance with the IndAS 108, “Operating segment”. Hence there are no reportable business segments to be disclosed as required by the said standard.

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

(ii) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(iii) The Company does not have any borrowings from banks or financial institutions against security of its current assets.

(iv) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

(v) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(vi) No Scheme of Arrangements has been approved by the competent Authority in terms of sections 230 to 237 of the Companies Act 2013,during the year

(vii) Utilisation of borrowed funds and share premium

I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)

(ix) The Company has not traded or invested in crypto currency or virtual currency during the year.

(x) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

NOTE 51: DISCLOSURE AS PER REGULATION 34(3) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

The Company has given Loan to Caplin Steriles Ltd (Subsidiary Company) amounting to '' 156 Crs as at 31st March 2023. (The maximum amount of loan outstanding during the year is '' 156 Crs) for its Capex purposes. The terms of such transaction have been recorded in writing.

NOTE 52: NOTE ON SOCIAL SECURITY CODE 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

NOTE 53: Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure. The accompanying notes are an integral part of the standalone financial statements.


Mar 31, 2022

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

NOTE 37: BALANCES WiTH SCHEDULED BANKS iN DEPOSiT ACCOUNTS iNCLUDES:

(a) Bank Deposit Accounts under Note no: 11 for the current year include '' 0.02 Crores (as at 31.03.2021''0.36 Crores) earmarked as lien towards Margin for Letter of Credit and Bank Guarantee .

NOTE 38: EMPLOYEE BENEFiTS(i) Defined Contribution Plan:

Contributions to defined contributions schemes as employees'' state insurance, labour welfare fund, etc are charged as expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company''s provident fund contributions is made to a Government administered fund and charged as expense to the Statement of Profit and Loss. The contributions payable to these plans are at the rates specified in the rules of the schemes.

The Company recognized '' 1.70 Crores (Previous year '' 1.48 Crores ) towards provident and pension fund contributions in the Statement of Profit and Loss.

(ii) Defined Benefit Plan:a. Gratuity

The Company has an obligation towrads gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to Life Insurance Corporation of India (LIC). The Company accounts for the liability for gratuity benefits payable in the future based on acturial valuation

b. Compensated Absences

The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each Balance Sheet date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet date.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows.

interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Longevity risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

FINANCIAL INSTRUMENTS:NOTE 46: FINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENT A. Accounting classification and fair values:

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

The Company''s board of directors have overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management framework. The Company''s risk management policies are established to set appropriate risk limits and to monitor risks and adherence to limits. risk management policies and systems are reviewed periodically to reflect changes in market condition and the Company''s activities. The Company through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

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

i. Credit Risk:

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of the customers to which the Company grants credit terms in the normal course of business.

Expected credit loss assessment

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g timeliness of payments, available information, etc) and applying experienced credit judgement.

Exposures to the customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses, if any. Historical trends of impairment of trade receivables reflects no credit losses. Given that the macroecomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of “no credit loss” to continue.

No allowance for impairment in respect of trade and other receivables was provided during the year and immediate preceding year.

Cash and cash equivalents

As at the year end, the Company held cash and cash equivalents of '' 81.01 Crores (31.03.2021''148.82 Crores). The cash and cash equivalents are held with banks with good credit rating.

Other Bank balances

As at the year end, the Company held other Bank balance of '' 235.07 Crores (31.03.2021''196.67 Crores). The balances are held with banks with good credit rating.

Investment in mutual funds

As at the year end, the Company held Investment in Mutual Fund of '' 51.97 Crores (31.03.2021''10.54 Crores).The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non - performance by these counter-parties.

Other financial asset

As at the year end, the Company held Inter Corporate Deposits/Bank Deposits of '' 143.58 Crores (31.03.2021''21.24 Crores) under other financial asset.

i. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company has not availed any fund based working capital facilities from banks and financial institutions. The Company has obtained nonfund based working capital lines from banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds which carry no/low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintain financial flexibility.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

iii) 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 receivable and payable. We are exposed to market risk primarily related to foreign exchange rate risk as the Comapny''s product is exported to variuos countries and a certain portion of its export is sourced thorough import. Thus our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company does not use any derivative to manage market risk since certain degree of a natural hedge is available in the form of foregin currency realised from exports are paid against imports.

Currency risk

The Company is exposed to currency risk on account of its exoprt and import of pharmaceuticals and import of raw material, capital goods,etc . The functional currency of the Company is Indian Rupee, where as majority of its export and imports are settled through USD($).

Sensitivity analysis

A reasonable strengthening (weakening) of the Indian Rupee against US dollars as at March 31 would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amount shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

1% appreciation / depreciation of the respective foreign currencies with respect to functional currency of the Company would result in increase / decrease in the profit before taxes by approximately '' 0.56 Crore for the year ended March 31, 2022 ('' 1.23 Crores for the year ended March 31, 2021)

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/ borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

As on 31 March 2022 and 31 March 2021, the Company has not availed any long term borrowings except for loans on certain vehicles in previous year on fixed rate basis.Further, the Company has not availed any fund based working capital lines.

Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, change in interest rates at the reporting date would not affect profit or loss.

Commodity rate risk

The Company''s operating activity involve purchase of Active Pharmaceutical Ingredients (API) and other direct materials, whose prices are exposed to the risk of fluctuation over short period of time. The commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As on 31 March 2022, 31 March 2021, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

Risk due to outbreak of COVID 19 pandemic

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of receivables, inventories and investments. In developing the assumptions relating to the possible future uncertainities in the global economic conditions because of this pandemic, the Company has used internal and external sources of information and based on the current estimates arrived at using the said assumptions, the Company expects to recover the carrying amount of receivables, inventories and investments. As the outbreak continues to evolve, the company will continue to closely monitor any material changes to future economic conditions.

NOTE 48: CAPiTAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on the capital as well as the level of dividends to ordinary shareholders. As on date the Company has no borrowings.

NOTE 49: SEGMENT REPORTiNG

The company is engaged in manufacture of pharmaceuticals formulations which is the only business segment determined in accordance with the IndAS 108, “Operating segment”. Hence there are no reportable business segments to be disclosed as required by the said standard.

NOTE 50: DiSCLOSURE OF TRANSACTiON WiTH STRUCK OFF COMPANiES

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

NOTE 51: ADDiTiONAL REGuLATORY Information REQuIRED BY SCHEDuLE iii TO THE COMPANiES ACT, 2013

(i) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(iv) Utilisation of borrowed funds and share premium

I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(v) The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

(vi) The Company has not traded or invested in crypto currency or virtual currency during the year.

(vii) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(viii) No Scheme of Arrangements have been approved by the Competent Authority in terms of Sections 230 to 237 of the Companies Act,2013,during the year

NOTE 52: DiSCLOSURE AS PER REGULATiON 34(3) OF THE SEBi (LiSTiNG OBLiGATiONS AND DiSCLOSURE REQUiREMENTS) REGULATiONS, 2015

The Company has given Loan to Caplin Steriles Ltd (Subsidiary Company) amounting to '' 39.75 Crs as at 31st March 2022. (The maximum amount of loan outstanding during the year is '' 39.75 Crs) for its Capex purposes. The terms of such transaction have been recorded in writing.

NOTE 53: NOTE ON SOciAL SEcURiTY cODE 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

NOTE 54: PREViOUS YEAR’S FiGURES HAVE BEEN Regrouped / REcLASSIFIED WHEREVER NEcESSARY TO cORRESPOND WiTH THE cURRENT YEAR’S cLASSiFicATiON / DiScLOSURE.

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


Mar 31, 2018

NOTE 1 DESCRIPTION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

IA. Company Overview:

Caplin Point Laboratories Limited (“Caplin Point” or “the Company”) incorporated in 1990, headquartered and having its registered office in Chennai, Tamil Nadu, India. The Company is into the business of pharmaceuticals - producing, developing and marketing wide range of generic formulations and branded products and exporting to overseas market. The Company’s principal research and development facilities are located in Tamil Nadu, India; its principal manufacturing facilities are located in Puducherry and Tamil Nadu, India. The Company’s shares listed on the Bombay Stock Exchange and the National Stock Exchange in India.

b) Rights, preference & restrictions attached to shares Equity Shares

The Company has only one class of equity shares having a par value of RS.2/- per share. Each holder of equity share is entitled to one Vote per Share.

The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

(i) (a) The Scheme consists of 3,75,000 equity shares of RS.2/- each (ie 75,000 equity shares of RS.10/- each as on 1 April, 2016) of whicRs.80,250 shares of RS.2/- each granted (ie 16050 shares of RS.10 each) as on 1st April 2016.

(b) During the year ended 31st MarcRs.2017, 26,750 shares of RS.2/- each, from the above said 80,250 shares were allotted.

(c) During the year ended 31st MarcRs.2018, further 26,750 shares of RS.2/- each, from the above said 80250 shares were allotted, and 2,94,000 shares has been further granted.

(ii) The Scheme consists of 5,00,000 equity shares RS.2/- each of whicRs.76,500 granted during the year.

f) No shares have been allotted without payment being received in cash or by way of bonus shares during the period of five years immediately preceding the balance sheet date

Nature of Reserve

a) Capital Reserve

The Capital Reserve has been created on restructuring of the Capital of the Company under a scheme of amalgamation.

b) Securities Premium

Securities Premium account has been created on issue of shares under employee stock option scheme.

c) General Reserve

The General Reserve is created by time to time transfer of profits from retained earnings for appropriation purposes. As the General Reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to the statement of profit and loss.

i) Foreign Currency Term Loan availed is secured by first charge on the plant & machinery of the Company’s unit at Gummidipoondi

ii) Obligations under Hire purchase are secured against relevant fixed assets obtained under Hire Purchase Finance Terms of Repayments

a) Secured Loans from Banks are repayable in equal monthly instalment.

b) Vehicle loans from Banks and other financial institutions are repayable in equal monthly instalments.

c) The rate of interest on vehicle loans vary between 10% to 12% per annum.

NOTE 2 DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the Financial Year end together with Interest Paid / Payable under this Act have not been provided.

NOTE 3 BALANCES WITH SCHEDULED BANKS IN DEPOSIT ACCOUNTS INCLUDES:

(a) Bank Deposit Accounts under Note no: 9 for the current year include RS. 485.68 lakhs earmarked as lien towards Margin for Letter of Credit and Bank Guarantee (as at 31.03.2017 RS.1280.91 lakhs, as at 1.04. 2016 RS.81.09 lakhs).

NOTE 4 BALANCE WITH NON SCHEDULED BANKS

Details of balances kept with non-scheduled banks as on balance sheet dates and the maximum balances kept with non-scheduled banks during the Financial Year are as follows:

NOTE 5

The Company had revalued the land, where the factory/office building is situated, during the period ended June 30, 2008 to the extent of RS.439.36 Lakhs and the gain on the revaluation of land to the extent of RS.373.38 Lakhs was credited to the Revaluation Reserve and such gain available in revaluation reserve acount has been transferred to Retained earnings account.

NOTE 6 EMPLOYEE BENEFITS (i) Defined Contribution Plan:

The Company makes monthly contribution for qualifying employees towards provident / retirement fund administered and managed by the Government of India under defined contribution plans .

The Company recognized RS.159.72 lakhs (previous year RS.132.20 lakhs ) towards provident and pension fund contributions in the Statement of Profit and Loss.

(ii) Defined Benefit Plan:

The Company makes contributions to the group gratuity scheme administered by the LIC, a funded defined benefit plan for qualifying employees.

The following table sets out the status of the gratuity plan and reconciliation of opening and closing balances of the present value of defined benefit obligation.

NOTE 7 OPERATING LEASES

Operating lease commitments - Company as lessee

Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable / cancellable at the option of either of the parties.

There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments (includes R&D unit) recognised in the Statement of Profit and Loss is RS.114.85 Lakhs (Previous Financial Year RS.118.48 Lakhs).

The Company has entered into long term leasing arrangements for land which are in the nature of finance lease. These arrangements do not involve any material recurring payments.

NOTE 8 EARNINGS IN FOREIGN EXCHANGE (ON ACCRUAL BASIS)

FOB Value of Exports - RS.40,990.23 Lakhs. (Previous Financial year - RS.32,561.26 Lakhs)

NOTE 9 AMOUNT DUE TO INVESTOR EDUCATION AND PROTECTION FUND

The due amount of RS. 8.71 lakhs were duly credited to investor education and protection fund during the year and there is no outstanding due in this regard as of end of the Financial Year.

NOTE 10 RELATED PARTY DISCLOSURES, AS REQUIRED BY INDIAN ACCOUNTING STANDARD 24 (IND AS 24) ARE GIVEN BELOW.

(a) Related parties and nature of relationship

(b) Key managerial personnel

Dr. Sridhar Ganesan - Managing Director from 28.03.2015

Dr. B. Philip Ashok Karunakaran - Whole Time Director from 07.08.2017

Mr. M Jayapal - Whole Time Director retired on 28.03.2018

Mr. D.P.Mishra - Whole Time Director upto 30.04.2016

Mr. D Muralidharan - Chief Financial Officer from 19-02-2016

Mr. Vinod Kumar S - Company Secretary from 13-04-2015

* Provision for contribution to gratuity fund, leave encashment on retirement and other defined benefits which are made based on acturial valuation on an overall Company basis are not included in remuneration to key management personnel.

(i) Includes stock compensation expense of RS.54.25 Lakhs and RS.54.25 Lakhs for the year ended MarcRs.31, 2018 and For year ended MarcRs.31, 2017, respectively.

(ii) Mr. Dr. B. Philip Ashok Karunakaran has been appointed as Whole-time Director w.e.f. 07.08.2017

(iii) Mr. M Jayapal, Whole Time Director retired on 28.03.2018

(iv) Mr. D. P. Mishra stepped down from the position of Whole-time Director w.e.f. 01.05.2016 and continues to be a Non Executive, Non independent Director.

NOTE 11

Total Share Capital of Argus Salud Pharma LLP is RS. 99.10 Lakhs (RS. 99.10 Lakhs) out of whicRs.99.90% of shares is held by the Company and 0.10% is held by May India Property Private Limited and their profit sharing ratio is 99.90% and 0.10% respectively (Previous year 99.90% and 0.10% respectively).

NOTE 12 FINANCIAL INSTRUMENTS:

Financial Instruments - Fair value and risk management

A. Accounting classification and fair values:

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

B. Measurement of fair values:

Valuation techniques and significant unobservable inputs:

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, for financial instruments measured at fair value in the statement of financial position, as well as the significant unobservable inputs used:

C. Financial risk management:

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the risk management framework. The Company’s risk management policies are established to set appropriate risk limits and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in market condition and the Company’s activities. The Company through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

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

i. Credit Risk:

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of the customers to which the Company grants credit terms in the normal course of business.

Trade Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants the credit terms in the normal course of business.

Expected credit loss assessment

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g timelines of payments, available information, etc) and applying experienced credit judgement.

Exposures to the customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses, if any. Historical trends of impairment of trade receivables reflects no credit losses. Given that the macroecomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of “no credit loss” to continue.

No allowance for impairment in respect trade and other receivables was provided during the year and immediate preceding year.

Cash and cash equivalents

As at the year end, the Company held cash and cash equivalents of RS.1139.31 lakhs (31.03.2017 RS.2695.74 lakhs, 1.04.2016 RS.1528.28 lakhs). The cash and cash equivalents are held with banks with good credit rating.

Other Bank balances

Other bank balances are held with bank with good credit rating.

Investment in mutual funds

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non - performance by these counter-parties.

Other financial asset

Other financial assets are neither past due nor impaired.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has not availed any fund based working capital facilities from banks and financial institutions. The Company has obtained non-fund based working capital lines from banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds which carry no/low mark to market risks. The Company monitors funding options available in the debt and capital markets with a view to maintain financial flexibility.

iii) 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 receivable and payable. We are exposed to market risk primarily related to foreign exchange rate risk as the Comapny’s product is exported to variuos countries and a certain portion of its export is sourced thorough import. Thus our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company does not use any derivative to manage market risk since certain degree of a natural hedge available in the form of foregin currency realised from exports are paid against imports.

Currency risk

The Company is exposed to currency risk on account of its exoprt and import of pharmaceuticals and import of raw material, capital goods,etc . The functional currency of the Company is Indian Rupee, where as majority of its export and imports are settled through USD($).

Exposure to Currency risk

Following is the currency profile of non-derivative finnacial assets and financial liabilities

Sensitivity analysis

A reasonable strengthening /weakening of the Indian Rupee against US dollars as at MarcRs.31 would affect the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amount shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

10% appreciation / depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease / increase in the profit before taxes by approximately RS.785.72 Lakhs for the year ended MarcRs.31, 2018 (RS.358.98 Lakhs for the year ended MarcRs.31, 2017)

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/ borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

As on 31 MarcRs.2018 and 31 MarcRs.2017, the Company has not availed any long term borrowings except for loans on certain vehicles on fixed rate basis. Further, the Company has not availed any fund based working capital lines.

Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, change in interest rates at the reporting date would not affect profit or loss.

Commodity rate risk

The Company’s operating activity involve purchase of Active Pharmaceutical Ingredients (API) and other direct materials, whose prices are exposed to the risk of fluctuation over short period of time. The commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As on 31 MarcRs.2018, 31 MarcRs.2017, 1 April 2016, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

NOTE 13 CAPITAL MANAGEMENT

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on the capital as well as the level of dividends to ordinary shareholders.

As on date the Company has no borrowings except for certain vehicle loans.

NOTE 14 FIRST TIME ADOPTION TO IND AS Transition to Ind AS:

For the purposes of reporting as set out in Note 1B(a), the Company has transitioned basis of accounting from Indian generally accepted accounting principles [‘IGAAP’] to Ind AS. The accounting policies set out in Note 1B have been applied in preparing the financial statements for the year ended 31 MarcRs.2018, the comparative information presented in these financial statements for the year ended 31 MarcRs.2017 and in preparation of an opening Ind AS balance sheet as at 1 April 2016.

In preparing opening Ind AS balance sheet, the Company has adjusted amounts reported in financial statements prepared in accordance with IGAAP On transition, the Company did not revise estimates previously made under IGAAP except where required by Ind AS.

C. Reconciliation of statement of Cash Flows

There were no material differences between the Statement of Cash Flows presented under Ind AS and under IGAAP Notes to the reconciliation:

1. Proposed Dividend

Under previous GAAP, proposed dividend are recognised in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognised 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.

2. Fair valuation of mutual fund investment

Under previous GAAP, mutual fund investments were carried at cost and only mark to market losses were recognised in Statement of Profit and Loss. Under Ind AS, mutual fund investments are fair valued at the period end and resulting mark to market loss or gain is transferred to Statement of Profit and Loss.

3. Lease rent straight lining impact

Lease rentals straight-lined under previous GAAP, to the extent linked to inflation are (created)/reversed under Ind AS 17.

4. Fair valuation of non-current security deposits

Under previous GAAP, security deposits are carried at their book values. Under Ind AS, non-cancellable deposits (other than statutory in nature) are required to be measured at their fair values at inception using an appropriate discounting rate.

5. Fair value of Gratuity Asset

Fair value impact of Gratuity Asset under Ind AS has been accounted for.

6. Deferred Tax impact

Deferred tax impact on account of Ind AS transition as discussed above has been accounted under deferred tax.

NOTE 15

The Company operates in one segment only viz., pharmaceutical formulations.

NOTE 16

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


Mar 31, 2017

NOTE 1. CONTINGENT LIABILITIES (to the extent not provided for)

a) Outstanding Bank Guarantee given to the Customs department and otRs,ers H300 Lakhs (Previous Financial Year - RS,20.00 Lakhs)

b) Outstanding Letters of Credit: RS,106.67 lakhs (Previous Financial Year - RS,11.73 lakhs)

NOTE 2. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the Financial Year end together with Interest Paid / Payable under this Act have not been given.

NOTE 3. Balances with Scheduled banks in deposit accounts includes:

(a) Bank Deposit Accounts under Note no: 16 for the current year include RS,1280.91 lakhs earmarked as lien towards Margin for Letter of Credit and Bank Guarantee. (Previous Financial Year RS,81.09 Lakhs)

(b) Retention deposit under lien towards pre shipment credit - RS,144.09 Lakhs (Previous Financial Year - RS,134.67 Lakhs)

The Company had revalued the land, where the factory/office building is situated, during the period ended June 30, 2008 to the extent of RS,439.36 Lakhs and the gain on the revaluation of land to the extent of RS,373.38 Lakhs was credited to the Revaluation Reserve.

NOTE 4

The following table sets out the status of the gratuity plan as required under AS15 and reconciliation of opening and closing balances of the present value of defined benefit obligation;

The estimates of future salary increases are considered in actuarial valuation taking in to account inflation, seniority, promotion and other relevant facts such as supply and demand factors in the employment market.

NOTE 5. OPERATING LEASES

The Company has entered into cancellable lease agreements for office facilities. Lease Payments (includes R&D facilities) recognized in the Statement of Profit & Loss for the Financial Year RS,118.48 Lakhs. (Previous Financial Year RS,66.46 Lakhs). The company has not entered into any non cancellable operating and finance leases.

Details of forward contract outstanding on account of hedging as at the end of the Financial Year: Nil (Previous Financial Year: Nil)

(i) 9 Months Period and Financial Year ended March 31, 2016, includes RS,4 lakhs pertaining to FY 2014-15.

FOB Value of Exports - RS,32561.26 Lakhs. (Previous Financial Year - RS,21,580.53 Lakhs)

Dividend payment in foreign currency paid during the Financial Year RS,2.72 Lakhs -( Previous Financial Year RS,8.35 Lakhs).

(i) Diluted Earnings per share for the 9 months period and Financial Year ended March 31, 2016 on the basis of the sub divided face value of equity shares of H2/- each is H6/-.

NOTE 6. AMOUNT DUE TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts due and outstanding to be credited to investor education and protection fund as of end of the Financial Year.

(b) Key managerial personnel

Dr. Sridhar Ganesan - Managing Director from 28.03.2015

Mr. M Jayapal - Whole Time Director from 28.03.2015

Mr. D.P.Mishra - Whole Time Director up to 30.04.2016

Mr. Hariharaponnambalam. P - Chief Financial Officer from 06-05-2015 up to 18-02-2016

Mr. D Muralidharan - Chief Financial Officer from 19-02-2016

Mr. Vinod Kumar S - Company Secretary from 13-04-2015

(i). Includes stock compensation expense of RS,54.25 Lakhs and RS,9.05 Lakhs for the year ended March 31, 2017 and for the 9 Months Period and Financial Year ended March 31, 2016, respectively.

(ii). Mr.D.PMishra stepped down from the position of Whole-time Director w.e.f. 01.05.2016 and continues to be a Director.

(iii). Mr. Harihara Ponnambalam Resigned w.e.f. 18.02.2016.

NOTE 7.

Total Share Capital of Argus Salud Pharma LLP is RS,99.10 Lakhs (RS,99.10 Lakhs) out of which 99.90% of shares is held by the Company and 0.10% is held by May India Property Private Limited and their profit sharing ratio is 99.90% and 0.10% respectively (Previous year 99.90% and 0.10% respectively).

NOTE 8.

The Company operates in one segment only viz., pharmaceutical formulations.

The amount of dividends proposed to be distributed to equity shareholders for the Year is RS,1133.65 lakhs i.e RS,1.50 paise per equity share of RS,2/-each.

NOTE 9.

On account of creation of additional capacity in CP I factory at Suthukeny, Puducherry during the year and by shifting of resources from CP III factory, Baddi, Himachal Pradesh to CP I factory, the Company ceases to carry out manufacturing activities at CP III factory.

NOTE 10.

Figures for the current financial year are for the 12 months ended March 31, 2017 as against the 9 months period for the previous financial year ended March 31, 2016 and hence figures are not comparable.

NOTE 11.

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2016

NOTE 1. CAPITAL COMMITMENT

The estimated amount of unexecuted capital contracts (net of advances and deposits) - Rs. 307.67 Lakhs (Previous Year - Rs. 358.73 Lakhs) NOTE 29 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

a) Outstanding Bank Guarantee given to the Customs department and others Rs.20.00 Lakhs (Previous Year - Rs. 76.82 Lakhs)

b) Outstanding Letters of Credit: Rs.11.73 lakhs (Previous Year - Rs. 287.97 lakhs)

NOTE 2. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the 9 Months Period and Financial Year end together with Interest Paid / Payable under this Act have not been given.

NOTE 3. BALANCES WITH SCHEDULED BANKS IN DEPOSIT ACCOUNTS INCLUDES:

(a) Other Bank balances for the current year include Rs.81.09 lakhs earmarked as lien towards Margin for letter of Credit and Bank Guarantee. (Pr. Yr. Rs. 107.66 Lakhs)

(b) Retention deposit under lien towards pre shipment credit - Rs. 134.67 Lakhs (Previous year - Rs. 126.40 Lakhs)

NOTE 4.

The Company had revalued the land, where the factory/office building is situated, during the period ended June 30, 2008 to the extent of Rs. 439.36 Lakhs and the gain on the revaluation of land to the extent of Rs. 373.38 Lakhs was credited to the Revaluation Reserve.

NOTE 5. OPERATING LEASES

The Company has entered into cancellable lease agreements for office facilities. Lease Payments recognised in the Statement of Profit & Loss for the 9 Months Period and Financial Year Rs. 64.19 Lakhs. (Previous year Rs.109.24 Lakhs). The company has not entered into any non cancellable operating and finance leases.

NOTE 6.

Total Share Capital of Argus Salud Pharma LLP is Rs. 99.10 Lakhs (Rs. 99.10 Lakhs) out of which 99.9% of shares is held by the Company and 0.10% is held by May India Property Private Limited and their profit sharing ratio is 99.90% and 0.10% respectively. (Previous year 99.90% and 0.10% respectively).

NOTE 7. EARNINGS IN FOREIGN EXCHANGE (ON ACCRUAL BASIS)

FOB Value of Exports - Rs. 21580.53 Lakhs. (Previous Year - Rs. 22016.90 Lakhs)

NOTE 8. AMOUNT DUE TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts due and outstanding to be credited to investor education and protection fund as of end of the 9 Months Period and Financial Year,

NOTE 9.

The Company''s factory unit at Baddi in Himachal Pradesh is entitled for exemption under section 80IC of the Income Tax Act and also from Central Excise and Salt Act from the date of commencement of production (24-09-2005).

NOTE 10

The Company operates in one segment only viz., pharmaceuticals formulations.

NOTE 11.

During the previous year ended June 30, 2015 depreciation of Rs.48.87 (net of deferred tax impact) had been adjusted to the opening balance of surplus in the Statement of profit and loss as at July 1, 2014, with corresponding adjustment to net book value of fixed assets, in accordance with the transitional provisions of Schedule II of the Act.

NOTE 12.

Figures for the current financial year are for the 9 months period ended 31st March 2016 as against the 12 months period for the previous financial year ended 30th June 2015 and hence figures are not comparable.

NOTE 13.

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Jun 30, 2015

NOTE 1 CAPITAL COMMITMENT

The estimated amount of unexecuted capital contracts (net of advances and deposits) – Rs.358.73 Lakhs (Previous Year – Rs.1239.93 Lakhs)

NOTE 2 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

a) Outstanding Bank Guarantee given to the Customs department and others Rs.76.82 Lakhs (Previous Year - Rs.36.56 Lakhs)

b) Outstanding Letters of Credit: Rs.287.97 lakhs (Previous Year – Rs.438.29 lakhs)

NOTE 3 DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the year end together with Interest Paid / Payable under this Act have not been given.

NOTE 4 BALANCES WITH SCHEDULED BANKS IN DEPOSIT ACCOUNTS INCLUDES:

(a) Other Bank balances for the current year include Rs.107.66 lakhs earmarked as lien towards Margin for letter of Credit and Bank Guarantee.( Pr. Yr. Rs.107.66 Lakhs)

(b) Retention deposit under lien towards pre shipment credit – Rs.126.40 Lakhs (Previous year – Rs.62.16 Lakhs)

NOTE 5 BALANCE WITH NON SCHEDULED BANKS

Details of balances kept with non-scheduled banks as on balance sheet dates and the maximum balances kept with non-scheduled banks during the year are as follows:

NOTE 6

The Company had revalued the land, where the factory/office building is situated, during the period ended June 30, 2008 to the extent of Rs.439.36 Lakhs and the gain on the revaluation of land to the extent of Rs.373.38 Lakhs was credited to the Revaluation Reserve.

NOTE 7 EMPLOYEE BENEFITS

The following table sets out the status of the gratuity plan as required under AS15 and reconciliation of opening and closing balances of the present value of defined benefit obligation;

NOTE 8 OPERATING LEASES

The Company has entered into cancellable lease agreements for office facilities. Lease Payments recognised in the Statement of Profit & Loss for the year Rs.109.24 Lakhs. (Previous year Rs.93.38 Lakhs). The company has not entered into any non cancellable operating and finance leases.

NOTE 9

Total Share Capital of Argus Salud Pharma LLP is Rs.99.10 Lakhs (Rs.10 Lakhs) out of which 99.9% of shares is held by the Company and 0.10% is held by May India Property Private Limited and their profit sharing ratio is 99.9% and 0.10% respectively.(Previous year 99% and 1% respectively).

NOTE 10 EARNINGS IN FOREIGN EXCHANGE (ON ACCRUAL BASIS)

FOB Value of Exports – Rs.22016.90 Lakhs. (Previous Year – Rs.15101.57 Lakhs)

NOTE 11 AMOUNT DUE TO INVESTOR EDUCATION AND PROTECTION FUND

There are no amounts due and outstanding to be credited to investor education and protection fund as of end of the year.

NOTE 12 DISCLOSURE IN ACCORDANCE WITH THE ACCOUNTING STANDARD 18 – "RELATED PARTY DISCLOSURES" ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA.

(a) Related parties and nature of relationship

Mr. Vivek Siddharth, – Relative of Chairman

Argus Salud Pharma LLP – Related Entity

(b) Key management personnel

Dr. Sridhar Ganesan – Managing Director from 28.03.2015 (Whole Time Director from 25.08.2014)

Mr. M Jayapal – Whole Time Director from 28.03.2015 (Managing Director till 27.03.2015)

Mr. D.P.Mishra – Whole Time Director

Mr. S. Mohanraj – Chief Financial Officer & Company Secretary upto 13.02.2015

Mr.Harihara Ponnambalam P – Chief Financial Officer from 06.05.2015

Mr. Vinod Kumar S – Company Secretary from 13.04.2015

NOTE 13

The Company's factory unit at Baddi in Himachal Pradesh is entitled for exemption under section 80IC of the Income Tax Act and also from Central Excise and Salt Act from the date of commencement of production (24-09-2005).

NOTE 14

The Company operates in one segment only viz., Pharmaceuticals formulations.

NOTE 15

With effect from April 1, 2014, pursuant to the requirement of Companies Act, 2013(the 'Act'), the company has revised the useful life of its fixed assets, as specified in Schedule II of the Act, based on technical evaluation. As a result of this change,the depreciation charge is higher by Rs.127.11 lakhs for the year ended June 30, 2015. In respect of assets whose useful life is already exhausted as on July 1, 2014, depreciation impact on such assets has been adjusted in the Reserves and Surplus in accordance with the requirements of Schedule II of the Act

NOTE 16

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Jun 30, 2014

1. Rights, preference & restrictions attached to shares Equity Shares

The Company has only one class of equity shares having a par value of 10/- per share. Each shareholder is eligible for one Vote per Share. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim Dividend

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all preferential amounts, in proportion to their shareholding

I) Packing Credit and Other short term borrowings are secured by first charge on Buildings of the Company and hypothecation of Stock in Trade, Receivables, lien on deposits of the Company with the Bank. In addition to the above, the loans are also secured by second charge on Plant and Machineries of the Company, present & future in addition to the personal guarantee by the promoter and few shareholders of the Company.

2. Capital Commitment

The estimated amount of unexecuted capital contracts (net of advances and deposits) - Rs. 1239.93 Lakhs (Previous Year - Rs 1964.85 Lakhs)

3. Contingent Liabilities

a) Outstanding Bank Guarantee given to the Customs department and others Rs. 36.56 Lakhs (Previous Year - Rs. 21.05 Lakhs)

b) Outstanding Letters of Credit: Rs.438.29 lakhs (Previous Year - Nil)

4. Dues to Micro, Small and Medium Enterprises

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the year end together with Interest Paid / Payable under this Act have not been given.

5. Balances with Scheduled banks in deposit accounts includes:

(a) Other Bank balances for the current year include Rs. 107.66 lakhs earmarked as lien towards Margin for letter of Credit and Bank Guarantee. (Pr.Yr. Rs. 100 Lakhs)

(b) Retention deposit under lien towards pre shipment credit - Rs. 62.16 Lakhs (Previous year - Rs. 127.20 Lakhs)

6. Amount Due to Investor Education and Protection fund

There are no amounts due and outstanding to be credited to investor education and protection fund.

7. Disclosure In accordance with the Accounting Standard 18 - "Related Party Disclosures" Issued by the Institute of Chartered Accountants of India as identified by the company and relied upon by the auditors.

(a) Related parties and nature of relationship

Mr. Vivek Siddharth, - Relative of Chairman

Argus Salud Pharma LLP - Related Entity

(b) Key management personnel

Mr. M. Jayapal - Managing Director

Mr. D. P. Mishra - Whole Tine Director

Mr. Vivek Siddharth, - Chief Operating Officer

Mr. S. Mohanraj - Chief Financial Officer & Company Secretary


Jun 30, 2013

1 Capital Commitment

The estimated amount o! unexecuted capita! contracts (net of advances and deposits) Ks. 1964.85 I akhs (Previous Year ~ Ks. 2Hl«.t.2 I.aklis)

2 Contingent Liabilities

a ) Outstanding Bank Guarantee given io the Customs department and others Rs. 2!.05 lakhs (Previous Year Rs. 21.55 lakhs)

b) Outstanding Letters of Credit: Nil (Previous Year Rs.1S9.9l lakhs) c ) Disputed statutory dues:

3 Dues to Micro, Small and Medium Enterprises the Companv has not received information from Vendors regarding their status under the Micro, Small and Medium Pnterprises Development Act 200o ,md hence disclosure relating to amount unpaid as at the vear end together with Interest Paid / Payable under this Act have not been given

4) Balances with Scheduled banks in deposit accounts includes:

(a) Other Hank balances tor the current vear include Rs. IttO lakhs earmarked as lien towards Margin tor letter of

Credit and Bank Guarantee. (Previous Year Rs.92.70 lakhs) (c) Retention deposit under lien Inwards pre shipment credit Rs. 127,211 lakhs (Previous year Rs. 1 (22.95 I .akhs).

5 The Companv had revalued the land, where the factory/office building is situated, during the period ended 30th lune 200H to the extent oi Rs. 4».3h l.akhs and the gain on the revaluation of land to the evlent of Rs, 373.38 ( akhs was credited to the Revaluation Reserve.

6 Operating Leases

The Company has entered into cancellable lease agreements for office facilities. Lease Payments recognised in the Profit and Loss Account for the year Rs. 56.78 Lakhs. (Previous Year Rs. 46.19 Lakhs). The Company has not entered into any non cancellable operating and finance leases.

7 Earnings in Foreign Exchange (On Accrual basis)

FOB Value of Exports Rs in Lakhs. 108 46.63 (Previous Year Rs. in Lakhs 8973.82)

8 The Company''s factory unit at; BaUrfi in Himachal Pradesh is entitled for exemption under section 801C of the Income Tax Act and also from Central Excise an
9 The Company operates in one segment only viz., pharmaceutical formulations.

10 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Jun 30, 2012

A) Rights, preference & restrictions attached to shares Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one Vote per Share.

The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim Dividend

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all preferential amounts, in proportion of their shareholding

1. Capital Commitment

The estimated amount of unexecuted capital contracts (net of advances and deposits) - Rs. 2818.62 Lakhs (Previous Year - Rs. 1282.84 Lakhs)

2. Contingent Liabilities

(a) Outstanding Bank Guarantee given to the Customs department and others Rs. 21.55 Lakhs (Previous Year - Rs. 8.35 Lakhs)

(b) Outstanding Letters of Credit Rs. 189.91 Lakhs (Previous Year - 63.62 Lakhs)

(c) Disputed statutory dues:

3. Dues to Micro, Small and Medium Enterprises

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the year end together with Interest Paid / Payable under this Act have not been given.

4. Balances with Scheduled banks in deposit accounts includes:

(a) Deposits under lien towards Bank Guarantee - Rs in Lakhs. 3.35- (Previous Year - 3.48)

(b) Margin on Letters of Credits outstanding - Rs. In Lakhs 89.35 (Previous Year 121.67)

(c) Retention deposit under lien towards pre shipment credit - Rs. In Lakhs 1122.95 (Previous year - 1056.56).

5. The Company had revalued the land, where the factory/office building is situated, during the period ended 30"' June 2008 to the extent of Rs in Lakhs. 439.36 and the gain on the revaluation of land to the extent of Rs.in Lakhs 373.38 was credited to the Revaluation Reserve.

6. Total Share Capital of Argus Salud Pharma LLP is Rs. 10.00 Lakhs out of which 99% of shares is eld by the Company and 1% is held by May India Property Private Limited

7. Earnings in Foreign Exchange (On Accrual basis)

FOB Value of Exports - Rs in Lakhs. 8973.82 (Previous Year - Rs. in Lakhs - 6952.99)

8. Amount Due to Investor Education and Protection fund

There are no amounts due and outstanding to be credited to investor education and protection fund.

9. Disclosure in accordance with the Accounting Standard 18 - "Related Party Disclosures" issued by the Institute of Chartered Accountants of India as identified by the company and relied upon by the auditors.

(a) Related parties and nature of relationship

- Mr. Vivek Siddharth, relative of Chairman - Argus Salud Pharma LLP - Related Entity

(b) Key management personnel

- Mr. M Jayapal - Managing Director - Mr. D. P. Mishra - Whole Time Director

10. The Company's factory unit at Baddi in Himachal Pradesh is entitled for exemption under section 80IC of the Income Tax Act and also from Central Excise and Salt Act from the date of commencement of production (24-09-2005).

11. The Company operates in one segment only viz., pharmaceutical formulations.

12. The Revised Schedule VI has become effective from 1stApril 2011, for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in theiinancial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Jun 30, 2011

1. Capital Commitment

The estimated amount of unexecuted capital contracts (net of advances and deposits) - Rs.1282.84 lacs (Previous Year- Rs.192.27 lacs)

2. Contingent Liabilities

(a) Outstanding Bank Guarantee given to the Customs department and others Rs.835,000 /- (Previous Year - Rs.919,000/-)

(b) Outstanding Letters of Credit Rs. 6,362,000/- (Previous Year - 3,975,697/-)

3. Secured Loans

The Working capital facility of Packing Credit and Bills Discounting is secured by hypothecation of stocK in trade, receivables, and lien on deposits of the company with the Bank. The facility is also secured by first charge on the Corporate Office Building and Factory Buildings of the company and also personally guaranteed by the promoter, a Director and few shareholders of the Company.

4. Dues to Micro, Small and Medium Enterprises

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the year end together with Interest Paid / Payable under this Act have not been given.

5. Balances with Scheduled banks in deposit accounts includes:

(a) Deposits under lien towards Bank Guarantee - Rs.348,586/- (Previous Year - Rs. 344,527/-)

(b) Margin on Letters of Credits outstanding - Rs.12,167,034/- (Previous Year Rs. 6,125,741/-)

(c) Retention deposit under lien towards pre shipment credit - Rs.105,656,397/- (Previous year - Rs. 91,136,230/-).

6. The Company had revalued the land, where the factory/office building is situated, during the period ended 30th June 2008 to the extent of Rs. 43,935,500/- and the gain on the revaluation of land to the extent of Rs. 37,337,799/- was credited to the Revaluation Reserve.

7. Balances of debtors, loans, advances and deposits, including items which are subject to confirmation, have, in the opinion of the management, a value on realization in the ordinary course of business at least equal to the amount at which they are stated and creditors are stated at the value which they are liable to be paid.

8. Employee Benefits

The following table sets out the status of the gratuity plan as required under AS15 and reconciliation of opening and closing balances of the present value of defined benefit obligation;

The above defined obligation liability as at the Balance Sheet date is wholly funded by the company

The estimates of future salary increases are considered in actuarial valuation taking in to account inflation, seniority, promotion and other relevant facts such as supply and demand factors in the employment market.

9. Operating Leases

The company has entered into cancelable lease agreements for office facilities, office and residential premises of employees. Lease payments recognized in the Profit & Loss Account for the year - Rs. 4,141,039/-(Previous Year - Rs. 3,722,054/-). The Company has not entered into any non cancelable operating leases and finance leases.

10.Amount Due to Investor Education and Protection fund

There are no amounts due and outstanding to be credited to investor education and protection fund. 23. Proposed Dividend

Dividend Proposed by the Board of Directors is provided in the books of accounts pending approval at the Annual General Meeting.

11. The Company's factory unit at Baddi in Himachal Pradesh is entitled for exemption under section 80IC of the Income Tax Act and also from Central Excise and Salt Act from the date of commencement of production (24-09-2005).

12.The Company operates in one segment only viz., pharmaceutical formulations.

13. Previous year figures have been regrouped wherever necessary to conform to current year's classification


Jun 30, 2010

1. Capital Commitment

The estimated amount of unexecuted capita! contracts (net of advances and deposits) - Rs. 191.27 lakhs-(Previous Year- Rs.161.97 lakhs)

2 Contingent Liabilities

(a) Outstanding Bank Guarantee given to the Customs department and others Rs.919,000 /- (Previous Year - Rs.3,784,865/-)

(b) Outstanding Letters of Credit Rs. 3,975,697/- (Previous Year - Nil)

(c) There is an income tax demand to the extent of Rs.5,708,773/- towards tax for the assess- ment year 1995-96. The Company has filed an appeal against the assessment order of Commissioner of Income Tax (Appeals) on the points of dispute with the income Tax Appel- late Tribunal which is pending.

(d) For the Assessment Year 2002-03 the loss was assessed by Assistant Commissioner of Income Tax as Rs.Nil, while the company has incurred a loss of Rs.190.93 lakhs. The Company has filed an appeal with the Commissioner of Income Tax (Appeais) against the Assessment Order of the Assistant Commissioner of Income tax which is pending.

(e) For the Assessment Year 2001-02, of erstwhile May India Laboratories Pvt Ltd (since merged with this Company), orders were received from Assistant Commissioner of income Tax with demands amounting to Rs.11.01 lakhs. The Company has filed an appeal with the Commis- sioner of Income Tax (Appeals) against the Assessment Order of the Assistant Commis- sioner of Income tax which is pending,

(f) For the Assessment Year 2002-03, of erstwhile May India Laboratories Pvt Ltd (since merged with this Company), orders were received from Assistant Commissioner of Income Tax with demands amounting to Rs.25.96 lakhs. The Company has filed an appeal with the Commis- sioner of Income Tax (Appeals) against the Assessment Order of the Assistant Commis- sioner of Income tax which is pending.

(g) For the Assessment Year 2004-05, of erstwhile May India Laboratories Pvt Ltd (since merged with this Company), orders were received from Assistant Commissioner of Income Tax with demands amounting to Rs.7.61 lakhs. The Company has filed an appeal with the Commis- sioner of Income Tax (Appeals) against the Assessment Order of the Assistant Commis- sioner of Income tax which is pending.

(h) In the Order from the Joint Commissioner of Central Excise, Puducherry in the order dated 28-04-2009 forthe period from 08-01-2005 to 31-07-2005, an amount of Rs. 4.54 lakhs has been ascertained as interest on the excise duty paid on physician samples. The Company has preferred an appeal before the Commissioner of Appeals, Central Excise, Chennai which is pending.

(i) Excise Duty receivable includes Excise Duty Rebate claim of Rs. 2,272,402/- pending with the Department of Central Excise with regard to the operations of erstwhile May (India) Labo- ratories Private Limited, the Company amalgamated with this Company with effect from 1st April 2006. The Company has filed all the evidences to the Department of Central Excise

3. Secured Loans

The Working capital facility of Packing Credit and Bills Discounting is secured by hypothecation of stock in trade, receivables, and lien on deposits of the company with the Bank. The facility is also secured by first charge on the Corporate Office Building and Factory Buildings of the company and also personally guaranteed by the promoter, a Director and few shareholders of the Company.

4. Dues to Micro, Small and Medium Enterprises

The Company has not received information from Vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosure relating to amount unpaid as at the year end together with Interest Paid / Payable under this Act have not been given.

5. Balances with Scheduled banks in deposit accounts includes:

(a) Deposits under lien towards Bank Guarantee - Rs.344,527/- (Previous Year - Rs. 991,065/-)

(b) Margin on Letters of Credits outstanding Rs.6,125,741/- (Previous Year Rs.8,036,457/-)

(c) Retention deposit under lien towards pre shipment credit - Rs 91,136,230/- (Previous year - Rs. 74,640,855/-).

6. The Company had revalued the land, where the factory/office building is situated, during the period ended 30th June 2008 to the extent of Rs. 43,935,500/- and the gain on the revaluation of land to the extent of Rs. 37,337,799/- was credited to the Revaluation Reserve.

7. Balances of debtors, loans, advances and deposits, including items which are subject to confirmation, have, in the opinion of the management, a value on realization in the ordinary course of business at least equal to the amount at which they are stated and creditors are stated at the value which they are liable to be paid.

8. Operating Leases

The company has entered into cancelable lease agreements for office facilities, office and residential premises of employees. Lease payments recognized in the Profit & Loss Account for the year - Rs. 3,722,054/- (Previous Year - Rs.3,789,090/-). The Company has not entered into any non cancelable operating leases and finance leases.

9 Amount Due to Investor Education and Protection fund

There are no amounts due and outstanding to be credited to investor education and protection fund.

10. Proposed Divided

Dividend Proposed by the Board of Directors is provided in the books of accounts pending approval attheAnnual General Meeting.

11. Disclosure in accordance with the Accounting Standard 18 - "Related Party Disclosures" issued by the Institute of Chartered Accountants of India as identified by the company and relied upon by the auditors.

(a) Related parties and nature of relationship Mr. C C Paarthipan, Chairman

Mr. Vivek Siddharth, relative of Chairman Mrs. Krishnapriya Mishra , relative of a Director Argus Salud Pharma LLP - Related Entity

(b) Key management personnel

Mr. M Jayapal - Managing Director

Mr. K Kanmani Portko - Whole Time Director **

** From 1st Jan 09 to 6th Aug 2009

12. Due to Disturbances and damages by mob to plant and stock at our Puducherry Unit, it has not been functioning since January 2008. Arising out of the closure of the unit at Puducherry, all the workers and management staffs have been settled. However, a section of the management staff have raised dispute with the labour department and the conciliation proceedings are in progress. The Company has since started restructuring its manufacturing operations at Puducherry and has recommenced its operations, subsequent to the closure of the financial year in a phased manner.

13. The Companys factory unit at Baddi in Himachal Pradesh is availing exemption under section 80IC of the Income Tax Act and also from Central Excise and Salt Act from the date of commencement of production (24-09-2005).

14. The Company operates in one segment only viz., pharmaceutical formulations.

15. Previous year figures have been regrouped wherever necessary to conform to current years classi- fication

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