Notes to Accounts of Innova Captab Ltd.

Mar 31, 2025

p) Provisions (other than for employee benefits)

A provision is recognized if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. If the effect of
the time value of money is material, provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is
recognized as a finance cost.

The amount recognized as a provision is the best
estimate of the consideration required to settle the
present obligation at reporting date, taking into
account the risks and uncertainties surrounding
the obligation. When some or all of the economic
benefits required to settle a provision are expected
to be recovered from a third party, the receivable is
recognized as an asset if it is virtually certain that
reimbursement will be received and the amount
of the receivable can be measured reliably. The
reimbursement is treated as a separate asset.
Provisions are reviewed at each reporting date and
adjusted to reflect current best estimates.

q) Contingent liabilities and contingent assets

Contingent liability is a possible obligation arising from
past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the
control of the entity or a present obligation that arises
from past events but is not recognized because it is
not probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation or the amount of the obligation cannot
be measured with sufficient reliability. The Company
does not recognize a contingent liability but discloses
its existence in the standalone financial statements.

Contingent assets usually arise from unplanned
or other unexpected events that give rise to the
possibility of an inflow of economic benefits to
the entity. Contingent assets are recognized when
the realization of income is virtually certain, then
the related asset is not a contingent asset and its
recognition is appropriate. A contingent asset is
disclosed where an inflow of economic benefits is
probable.

Contingent liabilities and contingent assets are
reviewed at each reporting date and adjusted to
reflect the current best estimates.

r) Commitments

Commitments include the amount of purchase order
(net of advances) issued to parties for completion of
assets. Commitments are reviewed at each reporting
date.

s) Operating segment

An operating segment is a component of the Company
that engages in business activities from which it
may earn revenues and incur expenses, including
revenues and expenses that relate to transactions
with any of the Company''s other components, and for
which discrete financial information is available. All
operating segments'' operating results are reviewed
regularly by the Company''s Chief Operating Decision
Maker (CODM) to make decisions about resources
to be allocated to the segments and assess their
performance.

t) Cash and cash equivalents

For the purpose of presentation in the Statement of
Cash Flows, cash and cash equivalents include cash
in hand, demand deposits held with banks, other short¬
term highly liquid investments with original maturities
of three months or less that are readily convertible to
known amounts of cash and which are subject to an
insignificant risk of changes in value.

u) Statement of Cash Flows

Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the Company are segregated.

v) Earnings per share

Basic earnings/ (loss) per share are calculated
by dividing the net profit/ (loss) for the period

attributable to equity shareholders by the weighted
average number of equity shares outstanding during
the period. The weighted average number of equity
shares outstanding during the year is adjusted for
events of bonus issue and share split. For the purpose
of calculating diluted earnings/ (loss) per share, the
net profit or loss for the period attributable to equity
shareholders and the weighted average number of
shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.

w) Corporate Social Responsibility (“CSR") expenditure

CSR expenditure incurred by the Company is charged
to the Statement of the Profit and Loss.

x) Share capital

Equity shares: Incremental costs directly attributable
to the issue of equity shares are recognized as
a deduction from equity. Income tax relating to
transaction costs of an equity transaction is
accounted for in accordance with Ind AS 12.
Preference shares: The Company compulsorily
convertible preference shares (“CCPS") are classified
as financial liabilities, because the instrument holders,
in terms of the underlying agreement, had exit rights
including requiring the Company to buy back shares
held by them where upon the conversion ratio is also
not fixed. Since both the conversion and redemption
feature is conditional upon an event not under the
control of the issuer, and may require entity to deliver
cash, which issuer cannot avoid, or convert the CCPS
into equity shares, where the fixed for fixed condition
is not met, therefore, CCPS have been considered a
“hybrid" financial liability.

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA") notifies new
standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. During the year ended 31 March 2025,
MCA has notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f. 01 April 2024. The Company has reviewed the
new pronouncements and based on its evaluation has
determined that it does not have any significant impact in
its financial statements. As at 31 March 2025, MCA has not
notified any new standards or amendments to the existing
standards which are applicable to the Company

NOTE 18 - SHARE CAPITAL (Contd.)

# The Company has allotted 1,412,430 equity shares having face value of '' 10 each in the conversion ratio of 1:1
towards Cumulative Compulsorily Convertible Preference Shares (“CCCPS") on 01 December 2023 at a price of '' 448
per share.

The Company has allotted 669,642 Pre Initial Public Offer (IPO) equity shares having face value of ''10 each on 03
December 2023 at a price of '' 448 per share.

The Company, at its IPO meeting held on 26 December 2023 approved allotment of 7,142,857 Equity Shares of ''10 each
pursuant to Initial Public Offering at a securities premium of '' 438 per share under Fresh Issue and offer for sale of
5,580,357 Equity Shares at an Offer Price of '' 448 per Equity Share, to the respective applicants in various categories,
in terms of the basis of allotment approved in consultation with the authorized representative of BSE Limited and NSE.
The equity shares of the Company were listed on BSE Limited and National Stock Exchange of India Limited on 29
December 2023. Refer Note 48

b. Defined benefit plans
Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed
five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of
service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each
completed year of service. The same is payable on termination of service or retirement or death whichever is earlier.
The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as
at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to
additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The obligations are measured at the present value of the estimated future cash flows. The discount rate used for
determining the present value of the obligation under defined benefit plans is based on the market yields on government
bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognized immediately in the
Other Comprehensive Income (OCI).

This is an unfunded benefit plan for qualifying employees. This scheme provides for a lump sum payment to vested
employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion
of five years of service.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the
defined benefit obligation will tend to increase.

Salary inflation risk:

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

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and
depends upon the combination of salary increase, discount rate and vesting criteria.

b. The fair value of non-current assets and non-current liabilities (except lease liabilities) are valued based upon discounted
cash flow valuation method. The valuation model considers the present value of expected payments, discounted using
risk adjusted discount rate. The own non-performance risk was assessed to be insignificant.

c. The fair valuation of financial assets and liabilities with short-term maturities is considered to be approximately equal
to their carrying amount, due to their short-term nature.

There are no transfers between level 1, level 2 and level 3 during the year presented.

NOTE 42 (a) - FINANCIAL RISK MANAGEMENT
Risk management framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s board of director oversees the
management of these risks. The Company''s board of director is responsible to ensure that Company''s financial risk
activities which are governed by appropriate policies and procedures and that financial risks are identified, measured and
managed in accordance with the Company''s policies and risk objectives. The Board of directors reviews and agrees policies
for managing each of these risks, which are summarized below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises interest rate risk and currency risk financial instruments affected by market
risk include trade receivables, trade payables and borrowings. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters while optimizing the return.

(a) Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily
to the Company''s borrowings with floating interest rates. The Company is exposed to interest rate risk because
funds are borrowed at floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for
changes in variable interest rate. The exposure of the Company''s borrowing to interest rate changes as reported
to the management at the end of the reporting year are as follows:

The exposure of the Company''s borrowing to floating interest rate as reported at the end of the reporting year are
as follows:

(b) Currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing
foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to
exchange rate fluctuations between the functional currency and other currencies from the Company''s operating
activities.

The Company does not enter into trade financial instruments including derivative financial instruments for hedging
its foreign currency risk.

Exposure to currency risk:

The carrying amount of the Company''s foreign currency denominated monetary assets and monetary liabilities at
the end of each reporting year are as follows:

(ii) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables, loans and investments) and from its financing activities, including deposits with banks. Management has
a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

(a) Trade receivables

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

Based on internal assessment which is driven by the historical experience/current facts available in relation to
default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company
estimates its allowance for trade receivable using lifetime expected credit loss. Individual receivables which are
known to be uncollectible are written off by reducing the carrying amount of trade receivable and the amount of
the loss is recognized in the Statement of Profit and Loss within other expenses.

The Company''s exposure to credit risk for trade receivables by geographic region is as follows:

Out of the above foreign currency exposures, none of the monetary assets and liabilities are hedged by a derivative
instrument or otherwise.

Sensitivity analysis:

The following table details the Company''s sensitivity to a 5% increase and decrease in the '' against relevant
foreign currencies. 5% is the rate used in order to determine the sensitivity analysis considering the past trends
and expectations of the management for changes in the foreign currency exchange rate. The sensitivity analysis
includes the outstanding foreign currency denominated monetary items and adjust their transaction at the year
end for 5% change in foreign currency rates. A positive number below indicates a increase in profit or equity where
the '' strengthens 5% against the relevant foreign currency. For a 5% weakening of the '' against the relevant
foreign currency, there would be a comparable impact on the profit or equity balance below would be negative.
This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities
outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain
constant and ignores any impact of forecast sales and purchases.

(b) Security deposits

The Company furnished security deposits as margin money deposits to bank. The Company considers that its
deposits have low credit risk or negligible risk of default as the parties are well established entities and have
strong capacity to meet the obligations. Also, where the Company expects that there is an uncertainty in the
recovery of deposit, it provides for suitable impairment on the same.

(c) Financial guarantee

The Company provides financial guarantees to banks in respect of credit facilities availed by the subsidiaries from
banks to cover the loss on the credit extended to subsidiaries. The Company manages and controls credit risk by
setting limits on the amount of risk it is willing to accept for individual entities within the group, and by monitoring
exposures in relation to such limits. It is the responsibility of the Board of directors to review and manage credit risk.
The Company has assessed the credit risk associated with its financial guarantee contracts for allowance for
Expected Credit Loss (ECL) as at the year end. The Company makes use of various reasonable supportive forward¬
looking parameters which are both qualitative as well as quantitative while determining the change in credit risk
and the probability of default. The Company''s maximum exposure relating to financial guarantees as on 31 March
2025 is '' Nil million (31 March 2024: '' 300 million). Considering the creditworthiness of entities within the group
in respect of which financial guarantees have been given to banks, the management believes that the subsidiaries
have a low risk of default and do not have any amounts past due. Accordingly, no allowance for expected credit
loss needs to be recognised as at year end.

(iii) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to
meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash
management system. It maintains adequate sources of financing including loans from banks at an optimized cost.

NOTE 43 (i) - CONTINGENT LIABILITIES

The claims against the Company not acknowledged as debts comprise mainly pending lawsuits/claims against the Company,
proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings
and has made adequate provisions, wherever required. The Company does not reasonably expect the outcome of these
proceedings to have a material impact on its financial statements. As on 31 March 2025, there are no claims against the
Company not acknowledged as debt that require disclosure under contingent liabilities in the financial statements.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted
payments:

(iv) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the
same geographical region, or have economic features that would cause their ability to meet contractual obligations
to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative
sensitivity of the Company''s performance to developments affecting a particular industry. In order to avoid excessive
concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance
of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

NOTE 42 (b) - CAPITAL RISK MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to
maximize the shareholder value.

NOTE 46 - OTHER MATTER

During the year ended 31 March 2024, The Company has acquired Sharon Bio Medicine Limited (“Sharon") through Univentis
Medicare Limited (“UML") , an entity undergoing the corporate insolvency resolution process (“CIRP") under the Insolvency
and Bankruptcy Code, 2016 (“IBC") before the Hon''ble National Company Law Tribunal, Mumbai Bench (“NCLT") since April
2017. Sharon is engaged in the business of manufacturing of intermediates and active pharmaceutical ingredients and
finished dosages. It also offers contract manufacturing services for formulations and performs pre-clinical and toxicology
research services. In accordance with the terms of the Resolution Plan approved by the NCLT, UML infused '' 1,954.00
million ('' 1,944.00 million as loan and '' 10.00 million as equity share capital) into Sharon on 26 June 2023 and closure of
implementation pursuant to the Resolution Plan was achieved on 30 June 2023. Following such infusion of funds by UML,
Sharon became a wholly owned subsidiary of UML. UML availed a term loan of 1,450.00 million from HDFC bank for purpose
of aforesaid infusion into Sharon. The Guarantee for this loan was given by the holding Company which was subsequently
satisfied on 21 November 2023. The term loan is fully repaid by the UML during the financials year 2023-24.

NOTE 47 - OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(ii) The Company does not have any transactions/outstanding balances with companies struck off under section 248 of
the Companies Act, 2013 or section 560 of the Companies Act, 1956.

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

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

(v) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries"),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Further
the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been
complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering Act,
2002 (15 of 2003).

(vi) 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.

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

(viii) The Company have not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

(ix) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

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

(xi) The Company is not a Core Investment Company (as per the provisions of the Core Investment Companies (Reserve
Bank) Directions, 2016).

(xii) The Company has used borrowing for the purpose for which they have been obtained.

NOTE - 48

The Company has completed its IPO of 12,723,214 equity shares of face value '' 10 each at an issue price of '' 448 per share
(including a share premium of '' 438 per share) and as a result the equity shares of the Company were listed on National
Stock Exchange of India Limited (''NSE'') and BSE Limited (''BSE'') on 29 December 2023. The issue comprised of a fresh
issue of 7,142,857 equity shares aggregating to '' 3,200.00 million and offer for sale of 5,580,357 equity shares by selling
shareholders aggregating to '' 2,500.00 million.

The Company has estimated '' 478.39 million as IPO related expenses and allocated such expenses between the Company (''
272.79 million of this amount, '' 263.17 million has been adjusted to the security premium account) and selling shareholders
('' 205.60 million) in proportion to the equity shares allotted to the public as fresh issue by the Company and under offer for
sale by selling shareholder respectively. Out of the total IPO proceeds the fund available in escrow account is '' 2.13 million
for remitting funds for pending IPO related expenses (including '' 3.88 million is payable to selling shareholders on account
of IPO expenses incurred on behalf of the Company).

The Company has received an amount of '' 2,931.09 million (net of IPO expenses of '' 268.91 million) from proceeds out of
fresh issue of equity shares. The utilization of the net IPO proceeds is summarized below

As per our report of even date attached.

For B S R & Co. LLP For and on behalf of Board of Directors of

Chartered Accountants Innova Captab Limited

Firm registration number: 101248W/W-100022

Gaurav Mahajan Manoj Kumar Lohariwala Vinay Lohariwala

Partner Chairman & Wholetime Director Managing Director

Membership Number: 507857 DIN: 00144656 DIN: 00144700

Place: Panchkula Lokesh Bhasin Neeharika Shukla

Date: 19 May 2025 Chief Financial Officer Company Secretary

M.No.: A42724

Place: Panchkula
Date: 19 May 2025

---

Mar 31, 2024

p) Provisions (other than for employee benefits)

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The reimbursement is treated as a separate asset. Provisions are reviewed at each reporting date and adjusted to reflect current best estimates.

q) Contingent liabilities and contingent assets

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. Contingent assets are recognized when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. A contingent asset is disclosed where an inflow of economic benefits is probable.

Contingent liabilities and contingent assets are reviewed at each reporting date and adjusted to reflect the current best estimates.

r) Commitments

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Commitments are reviewed at each reporting date.

s) Operating segment

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All

operating segments'' operating results are reviewed regularly by the Company''s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

t) Cash and cash equivalents

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash in hand, demand deposits held with banks, other shortterm highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

u) Statement of Cash Flows

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

v) Earnings per share

Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue and share split. For the purpose of calculating diluted earnings/ (loss) per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding

during the period are adjusted for the effects of all dilutive potential equity shares.

w) Corporate Social Responsibility (“CSR") expenditure

CSR expenditure incurred by the Company is charged to the Statement of the Profit and Loss.

x) Share capital

Equity shares: Incremental costs directly attributable to the issue of equity shares are recognized as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

Preference shares: The Company compulsorily convertible preference shares ("CCPS") are classified as financial liabilities, because the instrument holders, in terms of the underlying agreement, had exit rights including requiring the Company to buy back shares held by them where upon the conversion ratio is also not fixed. Since both the conversion and redemption feature is conditional upon an event not under the control of the issuer, and may require entity to deliver cash, which issuer cannot avoid, or convert the CCPS into equity shares, where the fixed for fixed condition is not met, therefore, CCPS have been considered a "hybrid" financial liability.

NOTE 4. RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the period ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standard applicable to the Company that has not been applied.

NOTE 21. BORROWINGS (Contd.)

(j) Unconditional and irrevocable personal guarantee of Manoj Kumar Lohariwala, Vinay Kumar Lohariwala and Gian Prakash Agarwal for '' 750 each.

(k) Primary stock and debtors of the Subsidiary Company.

(l) Entire fixed assets (movable and immovable) (present and future) of the Holding Company created out of bank finance.

(m) Entire movable fixed assets of the Innova Captab (partnership firm) that were acquired by the Holding Company as part of slump sale from Innova Captab (partnership firm) as at 31 March 2021.

(n) Stocks of raw material, stock-in-process, finished goods including stocks in transit and receivables arising there from both present and future of Innova Captab (partnership firm).

(o) Stocks of raw material, stock-in-process, finished goods including stocks in transit and receivables arising there from both present and future of the Holding Company.

Note III: Closure of Charges

The Company is in process of closure of charges related to the loan repaid as at year ended on 31 March 2024.

Note IV: Deposit from directors

The Company had taken deposits from Manoj Kumar Lohariwala and Vinay Kumar Lohariwala, that carry interest rate of 7% per annum and were repayable on demand. The terms of repayment were amended in year ending on 31 March 2023 on the basis addendum to the loan agreement ("addendum") dated 31 March 2022 and as per the addendum, deposits are repayable on 30 March 2027. The same is repaid during the year ended 31 March 2024.

Note V: Cumulative compulsorily convertible preference shares

The Company had issued 1,412,430 cumulative compulsorily convertible preference share (''CCCPS'') at face value of '' 10 and at premium of '' 344 per CCCPS, during the year ended on 31 March 2023. The CCCPS holders of the Company, in terms of the underlying agreement, have exit rights that include requiring the Company to buy back shares held by them upon occurrence of an event not under the control of the Company and where upon the conversion, the ratio of conversion is also not fixed but dependent upon share price at time of occurrence of such event. Accordingly, since both the conversion and redemption feature is conditional upon an event not under the control of the issuer, and may require entity to deliver cash, which issuer cannot avoid, or convert the CCCPS into equity shares, where the fixed condition is not met, therefore, CCCPS have been considered a "non-current hybrid" financial liability, with a host non-derivative liability component for the interest and principal amount amounting to '' 401.30 and a separable derivative component amounting to '' 98.70 on the initial date of recognition as both the ratio and timing of conversion was uncertain. As per the requirements of IND AS 109, the derivative component has been re-measured at fair value of '' Nil (31 March 2023: '' 78.94) on reporting date and the change in fair value of '' 19.36 has been recognized as a loss in the Statement of Profit and Loss for the year ended 31 March 2024 (31 March 2023: Gain of '' 19.76).

b. Defined benefit plans Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of service are entitled to specific benefit. The level of benefit provided depends on the member''s length of service and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on termination of service or retirement or death whichever is earlier. The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognized immediately in the Other Comprehensive Income (OCI).

This is an unfunded benefit plan for qualifying employees. This scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

NOTE 45(a). FINANCIAL RISK MANAGEMENT Risk management framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s board of director oversees the management of these risks. The Company''s board of director is responsible to ensure that Company''s financial risk activities which are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of directors reviews and agrees policies for managing each of these risks, which are summarized below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk and currency risk financial instruments affected by market risk include trade receivables, trade payables and borrowings. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

(a) Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s borrowings with floating interest rates. The Company is exposed to interest rate risk because funds are borrowed at floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The exposure of the Company''s borrowing to interest rate changes as reported to the management at the end of the reporting year are as follows:

(b) Currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company''s operating activities.

The Company does not enter into trade financial instruments including derivative financial instruments for hedging its foreign currency risk.

(ii) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

(a) Trade receivables

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

Based on internal assessment which is driven by the historical experience/current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. Individual receivables which are

(b) Security deposits

The Company furnished security deposits as margin money deposits to bank. The Company considers that its deposits have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Also, where the Company expects that there is an uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

(c) Financial guarantee

The Company provides financial guarantees to banks in respect of credit facilities availed by the subsidiaries from banks to cover the loss on the credit extended to subsidiaries. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual entities within the group, and by monitoring exposures in relation to such limits. It is the responsibility of the Board of directors to review and manage credit risk. The Company has assessed the credit risk associated with its financial guarantee contracts for allowance for Expected Credit Loss (ECL) as at the year end. The Company makes use of various reasonable supportive forwardlooking parameters which are both qualitative as well as quantitative while determining the change in credit risk and the probability of default. The Company''s maximum exposure relating to financial guarantees as on 31 March 2024 is '' 300.00 (31 March 2023: '' 650.00). Considering the creditworthiness of entities within the group in respect of which financial guarantees have been given to banks, the management believes that the subsidiaries have a low risk of default and do not have any amounts past due. Accordingly, no allowance for expected credit loss needs to be recognized as at year end.

(iv) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

NOTE 45(b). CAPITAL RISK MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, business strategies and future commitments. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, trade payables and borrowings, less cash and cash equivalents and other bank balances.

During the year ended 31 March 2024, The Company has acquired Sharon Bio Medicine Limited ("Sharon"), an entity undergoing the corporate insolvency resolution process ("CIRP") under the Insolvency and Bankruptcy Code, 2016 ("IBC") before the Hon''ble National Company Law Tribunal, Mumbai Bench ("NCLT") since April 2017. Sharon is engaged in the business of manufacturing of intermediates and active pharmaceutical ingredients and finished dosages. It also offers contract manufacturing services for formulations and performs pre-clinical and toxicology research services. The Company has submitted a resolution plan dated 22 August 2022 (as modified on 06 October 2023) ("Resolution Plan") in relation to the CIRP involving Sharon. The Resolution Plan was approved by the committee of creditors on 16 November 2023 by a majority of 79.28% and subsequently an application for approval of the Resolution Plan was filed by the resolution professional with the Hon''ble National Company Law Tribunal, Mumbai Bench ("NCLT"). In line with the resolution plan and as per board resolution passed by the board of directors of Univentis Medicare Limited ("UML'') on 20 March 2023, it was decided that acquisition of Sharon would be done through UML.

The Resolution Plan was approved by the NCLT pursuant to its order dated 17 May 2023 and in accordance with the terms of the Resolution Plan approved by the NCLT, UML infused '' 1,954.00 ('' 1,944.00 as loan and '' 10.00 as equity share capital) into Sharon on 26 June 2023 and closure of implementation pursuant to the Resolution Plan was achieved on 30 June 2023. Following such infusion of funds by UML, Sharon became a wholly owned subsidiary of UML. UML availed a loan of '' 1,450.00 from HDFC bank for purpose of aforesaid infusion into Sharon. The Guarantee for this loan was given by the Company. Further, as per the affidavit filed by resolution professional on behalf of Company, it was submitted before NCLT that following the acquisition of Sharon by UML, Sharon would merge into UML. However, given that the resolution application did not record the fact of such merger, the merger application was rejected by NCLT vide order dated 16 October 2023.

''The erstwhile Resolution Applicant Peter Back Und Peter Vermoegenssverwaltung ("PBP") in lieu of performance bank guarantee is forfeited by way of the NCLT Order and accordingly sum of '' 10.06 crores appearing as Share application money but pending for allotment, has been transferred to State bank of India by the Abhyudaya Bank.

It is pertinent to note that Sharon was a listed entity as on date when acquisition was made by UML. As of today, all administrative tasks relating to implementation of Resolution Plan are complete and approval for application of delisting has been received by Sharon from stock exchange on 13 February 2024 confirming that the scrips of Sharon will be delisted from the Exchange records w.e.f. 20 February 2024.

Also, during the year ended 31 March 2023, following major events took place at Sharon:

a) A fire broke out at API Unit at Plot No. 6, MIDC Area, Taloja on 26 February 2023 around 8.50 AM in Production Line -II. Property, plant and equipment having gross value '' 23.56 with its written down value '' 9.68 and Stock (Finished Goods) worth '' 1.10 were destroyed in the fire. The above assets were insured for which company has filed a claim of '' 52.30 for property, plant and equipment and '' 1.10 for inventory. The reinstatement of Production Line-II has been completed and the Company has started the production activities from 22 March 2024.The Company is expecting the insurance proceeds to be received by end of June 2024.

b) On 09 March 2023, a search and Investigation was conducted by the Central Bureau of Investigation ("CBI") simultaneously at all business locations of the Company, including the Dehradun Plant, API unit at Taloja, Toxicology unit at Taloja, Satra Plaza and Corporate Office at Vashi, and the same continued overnight and was concluded on 10 March 2023. During the course of investigation, the CBI officials made enquiries with the management of the Company, sought information from the key personnel and seized certain documents which are relevant for their investigation. It is pertinent to note that the CBI officials have seized and taken complete control over the server and other related accounting and secretarial records from the premises of the Corporate Office of the Company at Vashi and have carried the server with them for investigation purposes. They have also instructed the Company personnel at Toxicology unit to surrender the server at the earliest, which was handed over to CBI on 06 April 2023. As per the management''s assessment this search and seizure did not impact the ongoing operations of Sharon as the Company had adequate data recovery measures in place. Further, the search and seizure, pertained to erstwhile promoters of Sharon and with respect to trading activities for the years priors to Pre-CIRP period and bears no negative/adverse impact on the Company.

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions/outstanding balances with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

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

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

(v) During the year ended 31 March 2024, the Company has provided a total unsecured loan of '' 1,366.00 to its Univentis medicare limited ("UML'') out of which '' 100.00 was provided to the Company during the period ended 30 June 2023 out of which '' 10.00 has been invested by the UML in Sharon Bio-medicine Limited on 26 June 2023 subsequent to this Sharon Bio-Medicine Limited became wholly owned subsidiary on 30 June 2023 and rest as unsecured loan to SBML and balance amount out of '' 1,366.00 utilised toward repayment of HDFC bank term loan. Apart from this, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Further the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering Act, 2002 (15 of 2003).

(vi) 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 has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

(ix) The Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

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

(xii) The Company is not a Core Investment Company (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016).

(xiii) The Company has used borrowing for the purpose for which they have been obtained.

NOTE 51. ''The Company has completed its IPO of 12,723,214 equity shares of face value '' 10 each at an issue price of '' 448 per share (including a share premium of '' 438 per share) and as a result the equity shares of the Company were listed on National Stock Exchange of India Limited (''NSE'') and BSE Limited (''BSE'') on 29 December 2023. The issue comprised of a fresh issue of 7,142,857 equity shares aggregating to '' 3,200.00 and offer for sale of 5,580,357 equity shares by selling shareholders aggregating to '' 2,500.00.

The Company has estimated '' 478.39 as IPO related expenses and allocated such expenses between the Company ('' 272.29 of this amount, '' 263.17 has been adjusted to the security premium account) and selling shareholders ('' 205.60) in proportion to the equity shares allotted to the public as fresh issue by the Company and under offer for sale by selling shareholder respectively. Out of the total IPO proceeds the fund available in monitoring agency account is '' 94.93 for remitting funds for pending IPO related expenses.

The Company has received an amount of '' 2,931.09 (net of IPO expenses of '' 268.91) from proceeds out of fresh issue of equity shares.Out of these proceeds, '' 3.88 is payable to selling shareholders on account of IPO expenses incurred on behalf of the Company. The utilization of the net IPO proceeds is summarised below

As per our report of even date attached.

For B S R & Co. LLP For and on behalf of Board of Directors of

Chartered Accountants Innova Captab Limited

Firm registration number: 101248W/W-100022

Gaurav Mahajan Manoj Kumar Lohariwala Vinay Kumar Lohariwala

Partner Chairman & Wholetime Director Managing Director

Membership Number : 507857 DIN : 00144656 DIN : 00144700

Lokesh Bhasin Neeharika Shukla

Chief Financial Officer Company Secretary

M.No.: A42724

Place: Panchkula Place: Panchkula

Date: 29 May 2024 Date: 29 May 2024

---

Mar 31, 2023

f. The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

g. The Company has also taken certain office premises and residential premises (used as guest house) on lease with contract terms within one year. These leases are short-term. The Company has elected not to recognize right-of-use-assets and lease liabilities tor these leases. The expenses relating to short-term leases for which the recognition exemption has been applied have been charged to the Statement of Profit and Loss on straight line basis.

* On 28 June 2022, the Company has filed Draft Red Herring Prospectus with SEBI in connection with the proposed Initial Public Offer (''IPO¹'') of equity shares of the Company by way of fresh issue and an offer for sale by lire selling shareholders. Accordingly, expenses incurred by the Company in connection with filing of Draft Red Herring Prospectus amounting to INR 46.25 (31 March 2022TNR 12.14, 31 March 2021:1NR Nil) is presented as "IPO expenses recoverable" included under "other current financial assets" as it is shall be partly recovered from the selling shareholders (as per die offer agreement) and INR 39.19 (31 March 2022: INR 12.14, 31 March 2021: INR Nil) is included in prepaid expenses under "other current assets" as it is shall be partly adjusted towards the securities premium.

* 1.41 million Compulsorily convertible preference share of INR 10 each have issued during the year ending 31 March 2023 and are classified as financial liability.

a) Rights, preferences and restrictions attached to equity shares

As per the memorandum of association, the Company’s authorized share capital consist of equity shares. All equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Shareholders are entitled to one vote per equity share held in the Company. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

b) Rights, preferences and restrictions attached to Compulsorily convertible preference share.

During year ended 31 March 2023, 1,412,430 compulsorily convertible preference shares ("CCPS") have been issued as fully paid with a par value of INR 354 per share (31 March 2022: nil, 31 March 2021: Nil). The CCPS holders of the company, in terms of the underlying agreement, have exit rights including requiring the Company to buy back shares held by them where upon the conversion ratio is also not fixed. Each CCPS shall entitle its holder to preferential dividend at the rate of 0.01% (zero point zero one percent) per annum (“Preferential Dividend”) of its face value. The Preferential Dividend is participative and cumulative and shall accrue from year to year. In addition to the Preferential Dividend, each CCPS shall entitle its holder to also participate pari passu in any dividends paid to the holders of common equity shares of the Company (“Equity Shares”) on a prorata as converted basis.The holders of the CCPS shall not be entitled to vote on any matter except to the extent permitted under the Companies Act 2013 or other applicable laws.

Note Tfl: Deposit from directors

The Company had taken deposits from Manoj Kumar Lohariwala and Vinay Kumar Lohariwala, that carry interest rate of 7% per annum and were repayable on demand and were therefore classified as current borrowings for the year ending 31 March 2021. The terms of repayment were amended in year ending on 31 March 2022 on the basis addendum to the loan agreement ("addendum") dated 31 March 2022 and as per the addendum, deposits arc repayable on 30 March 2027 and therefore have been classified accordingly to non current borrowings.Furthcr deposits from directors include total loan of 1NR 102.50 (31 March 2022: INR 202.50) from Gian Parkash Agganval who ceased to be a director with effect from 1 April 2022.

Note IV: Compulsorily convertible preference shares

The company has issued 1,412,430 compulsorily convertible preference share (‘CCPS’) at face value of INR 10 and at premium of INR 344 per CCPS, during the year ended on 31 March 2023. The CCPS holders of the company, in terms of the underlying agreement, had exit rights that include requiring the company to buy back shares held by them upon occurrence of an event not under the control of five company and where upon the conversion, the ratio of conversion is also not fixed but dependent upon share price at time of occurrence of such event. Accordingly, since both the conversion and redemption feature is conditional upon an event not under the control of the issuer, and may require entity to deliver cash, which issuer cannot avoid, or convert the CCPS into equity shares, where the fixed for fixed condition is not met, therefore, CCPS have been considered a “non-current hybrid” financial liability, with a host non-derivative liability component for the interest and principal amount amounting to 401.30 million and a separable derivative component amounting to INR 98.70 million on the initial date of recognition as both the ratio and timing of conversion is uncertain . As per the requirements of IND AS 109, the derivative component has been re-measured at fair value on reporting date, amounting to INR 78.94 million and the change in fair value of liability of INR 19.76 million has been recognized as an income in the Statement of Profit and Loss for the year ended March 31, 2023.

The quarterly retums/statement of current assets as submitted to banks compared to books of accounts reflected material discrepancies in above mentioned quarters as the Company had not considered goods-in-transit while reporting the balance of inventories, had adjusted the advances from customers while reporting the balance of trade receivables and had adjusted advances to vendors while reporting the balance of trade payables as at respective quarter ends.

Further, the quarterly retums/statement of current assets submitted to banks were prepared before incorporating tire impact of certain adjustments pertaining to cut off of revenue and purchase, overhead loading in inventories, accrual of interest towards MSME vendors as the Company did not have a formal quarterly closing process for its books of accounts. The Company has subsequently improved its processes for better reporting and submission of such data.

I). Further, in the year ended 31 March 2023 and 31 March 2022, the actual utilizadon of working capital remained within the bank sanction limits.

Also, the Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. The information regarding Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. Refer note 40 for the disclosure in respect of amounts payable to such enterprises as at year end that has been made in the Financial Information based on information available with the Company.

^Includes dues to related parties. Refer note 40

Note: The equity shares and basic/diluted earnings per share lias been presented to reflect the adjustments for sub-division of shares and issue of bonus shares in the year ending 31 March 2023 in accordance with hid AS 33 - Earnings per Share.

Note 38 - Segment information

Tiie Board of Directors monitors the operating results of tin''s segment for the ptupose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the Financial Information. For management purpose, the Company lias identified " Dings and phannaceutical products" as single operating segment.

iii) Non-current assets

The Company has common non-current assets for business in domestic and overseas markets. Hence, separate figures for non-current assets/ additions to property, plant and equipment have not been furnished, c. Information about major customers (from external customers)

For year ended 31 March 2023, one customers of the Company constituted more than 10% of tire total revenue of Company amounting to INR 1106.25 (31 March 2022, one customers of the Company constituted more than 10% of the total revenue of Company amounting to INR 1046.19)

Note 39 - Employee benefits a. Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, towards Provident Fund and Employee State Insurance Scheme (''ESI'') which are collectively defined as defined contribution plans. The Group has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund and ESI are as follows:

b. Defined benefit plans Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employees who have completed five years of sendee are entitled to specific benefit. The level of benefit provided depends on die member''s length of sendee and salary retirement age. The employee is entitled to a benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on termination of sendee or retirement or death whichever is earlier.

The present value of the obligation under such defined benefit plan is determined based on an actuarial valuation as at the reporting date using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligations are measured at the present value of the estimated future cash flows. The discount rate used for detenuiniug the present value of the obligation under defined benefit plans is based on the market yields on government bonds as at the date of actuarial valuation. Actuarial gains and losses (net of tax) are recognized immediately in the Other Comprehensive Income (OCl).

This is an unfunded benefit plan for qualifying employees. This scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service. _i

The above defined benefit plan exposes file Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

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

Demographic risk:

This is die risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating die sensitivity of the defined benefit obligation to significant actuarial assumptions the same methods (present value of defined benefit obligation calculated with the projected unit credit method at die end of die reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior year.

“ The Company has guaranteed an amount of INR 350.00 (31 March 2022: Nil) to I1DFC Bank on behalf of its Univentis Medicare Limited in relation to acquisition of Sharon Bio-Medicine Limited and has guaranteed an amount of INR 300.00 (31 March 2022: Nil) to HDFC Bank on behalf of Univentis Medicare Limited in relation to the short term borrowing facilities availed by the Subsidiary Company.

## Refer note 19 for details of personal guarantee provided by Vinay Kumar Lohariwala, Manoj Kumar Lohariwala and Gian Parkash Aggarwal lor the borrowing facilities availed by tire Company. Also, the subsidiary company has acquired an wholly owned subsidiary subsequent to year ending on 31 March 2023 as per the provisions of Insolvency and Bankruptcy Code (refer note 46 for further details). Tire resolution plan required a performance guarantee to be furnished by Company, which was issued by the Subsidiary Company on behalf of the Company and was approved in extra ordinary general meeting of shareholding of the Subsidiary Company on 4 November 2022.

D. Terms and conditions of transactions with related parties

The transaction with related patties are made on terms equivalent to those that prevail in aim’s length transactions and within ordinary course of business. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

E. Refer note 15 and 16 for IPO expenses recoverable.

Note 41 - Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Ministry of Micro, Small and .Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondences with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, die disclosure in respect of amounts payable to such enterprises as at the year end has been made in the Financial Information based on information available with the Company as under:

a. The carrying value of investment in Shivalik Solid Waste Management Limited was INR 2,500/-. Fair value of this investment is not considered to be material. As per paragraph 10 of Ind AS 27, the Company has elected to measure its investment in Univentis Medicare Limited (Subsidiary of the Company), at its cost.

b. The Company’s non-current borrowings have been contracted at market rates of interest. Accordingly, the carrying value of such non-current borrowings approximates fair value. Further, in accordance with amendment Ministry of Corporate Affairs notified in Ind AS 113 on 30 March 2019, fair value measurement of lease liabilities is not required. Fair value of other non-current other financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

c. Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

d. The fair value of separable derivative component has been derived by using Discounted cash flow method with terminal growth of 5% and weighted average cost of capital at 13%. (level-3). Refer below'' details for valuation technique and unobservable inputs for the assets or liabilities.

Note 43(a) - Financial risk management Risk management framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s board of director oversees the management of these risks. Tire Company’s board of director is responsible to ensure that Company’s financial risk activities which are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The board of directors reviews and agrees policies for managing each of these risks, which are summarized below.

(i) Market risk

Market risk is the risk that the fair value of fitUire cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rale risk and currency risk financial instruments affected by market risk include trade receivables, trade payables and borrowings. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

(a) Interest Rate Risk

Interest rate risk is the risk that the fiihtre cash flows of a financial instrument will OucUiate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floating interest rates. The Company is exposed to interest rate risk because funds are borrowed at floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the reporting year at e as follows:

The exposure of die Company’s borrowing to floating interest rate as reported at die end of the reporting year are as follows:_

(b) Currency risk

Foreign currency risk is the risk that the fitUire cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluchiation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating activities.

The Company does not enter into trade financial instruments including derivative financial instruments for hedging its foreign currency risk.

Exposure lo currency risk ;

The carrying amount of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of each reporting year are as follows:

Sensitivity analysis:

The following table details the Company’s sensitivity to a 5% increase and decrease in the 1NR against relevant foreign currencies 5% is the rate used in order to determine the sensitivity analysis considering the past trends and expectations of the management for changes in the foreign currency exchange rate. The sensitivity analysis includes die outstanding foreign currency denominated monetary items and adjust their transaction at die year end for 5% change in foreign currency rates. A positive number below indicates a increase in profit or equity where die INR strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there wotdd be a comparable impact on the profit or equity balance below would be negative. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the period end. This analysis assumes diat all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases._

(ii) Credit risk

Credit risk is the risk diat counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

(a) Trade receivables

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

Based on intcnial assessment which is driven by the historical experience/current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivable and die amount of the loss is recognized in the Statement of Profit and Loss within other expenses.

(c) Security deposits

The Company furnished security deposits as margin money deposits to bank. The Company considers that its deposits have low credit risk or negligible risk of default as the parties are well established entities and have strong capacity to meet the obligations. Also, where the Company expects that there is an uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

(iii) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optiini7.ed cost.

(iv) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or odtcr conditions. Concentrations indicate tire relative sensitivity of the Company’s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Note 43(b)- Capital risk management

For the purpose of the Company’s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, business strategies and fimire commitments. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Tire Company includes within net debt, trade payables and borrowings, less cash and cash equivalents and other bank balances.

(i) For assessment year 2017-2018, the Income tax Assessing Officer had raised the demand of [NR 13.09 vide order dated 15 December 2019. On 19 July 2021. the Assistant Commissioner of Income Tax reduced ihe demand to INR 0.60. The Company is of tire view that the demand of [NR 0.6 has been raised erroneously and accordingly, the Company has filed an application for rectification with the Deputy Commissioner of Income Tax to contest the demand. No tax expense has been accnted in Financial Statement for the tax demand raised as tire Company is contesting the demand and die management, including its tax advisors, believe that its position will be likely be upheld in appellate process and die ultimate outcome of the proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

Note 46-Subsequcnt events

Subsequent to year ended on 31 March 2023, The Company acquired Sharon Bio Medicine Limited (“Sharon”), an entity undergoing the coqiorate insolvency resolution process ("CIRP”) under die Insolvency and Bankruptcy Code, 2016 (“IBC”) before the Hon’blc National Company Law Tribunal, Mumbai Bench ("NCLT”) since April 2017. Sharon is engaged in the business of manufacturing of intermediates and active pharmaceutical ingredients and finished dosages. It also offers contract manufacturing services for formulations. It also performs pre-clinical and toxicology research services. The company submitted a resolution plan dated 22 August 2022 (as modified on 6 October 2022) (“Resolution Plan”) in relation to die CIRP involving Sharon. The Resolution Plan was approved by the committee of creditors on 16 November 2022 by a majority of 79.28% and subsequently an application for approval of the Resolution Plan was filed by the resolution professional with the I Ion''ble National Company Law Tribunal, Mumbai Bench (“NCLT’). In line with die resolution plan, it was decided diat acquisition of Sharon would be done through Univentis medicare limited ("UML") as per board resolution passed by the board of directors of UML on 20 March 2023. The resolution plan also required a performance guarantee to be furnished by Company, which was issued by UML on behalf of die company and was approved in extra ordinary general meeting of shareholding of UML on 4 November 2022.

The Resolution Plan was approved by the NCLT pursuant to its order dated May 17, 2023 and implementation of the Resolution Plan commenced subsequently. In accordance with the terms of the Resolution Plan approved by the NCLT, Univentis medicare limited ("UML'''') infused Rs. 1,954.00 (Rs. 1,944.00 as loan and Rs. 10 as equity share capital) into Sharon on June 26, 2023 and closure of implementation pursuant to die Resolution Plan was achieved on 30 June 2023. Following such infusion of fluids by UML, Sharon became a wholly owned subsidiary of UML. UML availed a loan of 1,450 from HDFC bank for purpose of aforesaid infusion into UML. The Guarantee for diis loan was given by the company.

Further, as per die affidavit filed by resolution professional on behalf of Company, it was submitted before NCLT that following the acquisition of Sharon by UML, Sharon would merge into UML. However, given diat the order dated May 17, 2023 did not record the fact of such merger, the monitoring committee of Sharon (as constituted pursuant to the Resolution Plan) filed an application dated June 16, 2023 before the NCLT requesting for a rectification of such order dated May 17, 2023 and clarification therein to specifically mention the fact of the proposed merger of Sharon into UML. The application dated June 16, 2023 was reserved for order on June 20, 2023 and the final copy of die order is awaited.

However, Peter Beck und Partner Vermoegensverwaltung GiVIBI I (the “Appellant”, who is a financial creditor of Sharon) filed an appeal dated June 30, 2023 before the NCLAT against the order dated May 17, 2023 with Sharon, the resolution professional, Ernst & Young LLP who were the advisors to the monitoring committee of Sharon, our Company, committee of creditors and UML being named as the respondents (together, the “Respondents”, and such appeal, the “Appeal”). The Appeal was filed alleging violation of the provisions of die IBC in that (he approved resolution plan allegedly discriminates within the creditors of die same class including die Appellant, who was an unsecured financial creditor of Sharon, as no payment was being made to die Appellant. The first hearing of the matter was held on 31 July 2023 in which die judgement was reserved. As per legal assessment undertaken by die company, the present appeal raises no grounds permissible tinder Section 61 of the Code to challenge the Approval Order.

As part of implementation of plan, following administrative tasks are still being undertaken by the group:

a) The payments to various stakeholders as envisaged in plan are underway by monitoring committee in terms of resolution plan.

b) Sharon was a fisted company and the delisting process has been initiated which would be completed once die payments to all public shareholders are completed.

c) As part of plan implementation, all die pre-CIRP dues and liabilities have been extinguished. The process of formal closure at various forums is underway.

Also, during the year ending on 31 March 2023, following major events took place at Sharon:

a) A Fire Broke out at API Unit at Plot No. 6, MIDC Area, Taloja on February 26, 2023 around 8.50 AM in Production Line -II. Property, plant and equipment having gross value Rs. 23.56 with its written down value Rs. 9.68 and Stock (Finished Goods) worth Rs. 1.10 were destroyed in the fire. The above assets were insured for which company has filed a claim of Rs. 40.96 for property, plant and equipment and Rs. 1.10 for inventory.

b) On 9 March 2023, a search and Investigation was conducted by die Central Bureau of Investigation ("CBt") simultaneously at all business locations of the Company, including the Dehradun Plant, API unit at Taloja, Toxicology unit at Taloja, Satra Plaza and Corporate Office at Vasili, and the same continued overnight and was concluded on March 10, 2023. During die course of investigation, the CBI officials made enquiries with the management of the company, sought information from die key personnel and seized certain documents which are relevant for their investigation. It is pertinent to note diat die CBI officials have seized and taken complete control over the server and other related accounting and secretarial records from the premises of the Corporate Office of the Company at Vasili and have carried the server with them for investigation purposes. They have also instructed the company personnel at Toxicology unit to surrender the server at the earliest, which was handed over to CBI on April 06, 2023. As per the management''s assessment this search and seizure did not impact the ongoing operations of Sharon as die company had adequate data recovery measures in place. Further, the search and seizure, pertained to erstwhile promotors of Sharon and bears no negative/adverse impact on the Company.

Note 47: Other Statu to 17 Information

(i) Tlie Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Betiami property.

(ii) The Company does not have any transactions with companies struck off.

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

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

(v) 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

(vi) 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

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

(viii) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or government or any government authority.

(ix) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

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

(xi) The Company including tire “Companies in the Group” (as per die provisions of the Core Investment Companies (Reserve Rank) Directions, 2016) do not have any Core Investment Company (“CIC”)

Note 48 - Ratios as per the Schedule III requirements