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Notes to Accounts of J B Chemicals & Pharmaceuticals Ltd.

Mar 31, 2023

â¢ Claims against the Company not acknowledged as debts include claims relating to pricing, commission, etc.

â¢ It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the Company pending resolution of the respective proceedings, as it is determined only on receipt of judgements/decisions pending with various forum/authorities.

â¢ The Company''s pending litigations comprise of proceedings pending with various direct tax, indirect tax and other authorities. The Company has reviewed all its pending litigations and proceedings, and has adequately provided for where provisions are required and disclosed as contingent liabilities, where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statement.

â¢ Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd (UPLL), which was acquired by the Company on a going concern basis, had received demand notices from Department of Chemicals & Fertilizers, Govt. of India, New Delhi, demanding a sum of '' 461.47 lakhs in respect of the Bulk Drug Metronidazole and a further sum of ''591.05 lakhs in respect of the Bulk Drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the Bulk Drugs at alleged lower cost. The Company has filed Writ Petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone, and Writ Petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These Writ Petitions have been admitted, and the Hon. High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the Writ Petition on the Company furnishing security as per the Orders. The Company has already furnished the Bank Guarantee of '' 402.35 lakhs as Security. As per the legal advice received by the Company, there is no liability, and accordingly, no provision is being made in the Standalone Financial Statements for these claims and demands.

The Company does not expect the outcome of the matters stated above to have a material adverse impact on the Company''s financial condition, results of operations or cash flows.

Future cash outflows, in respect of above matters, are dependent on the outcome of certain event and/or decisions of the relevant authorities for the matters under dispute.

The Company does not expect any reimbursements in respect of the above contingent liabilities.

40. RESEARCH AND DEVELOPMENT EXPENDITURE

The aggregate amount of revenue expenditure incurred during the year on Research & Development and shown in the respective heads of account is '' 3,558.30 lakhs (Previous year '' 3,048.09 lakhs).

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

The method used for deriving sensitivity information and significant assumptions made did not change from the previous period.

ix. Investment Details:

The Company made annual contribution to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made or the break-down of the plan assets by investment type.

The Company expects to make a contribution of '' 480.96 lakhs (March 31, 2022: '' 1,147.67 lakhs) to the defined benefits plans during the next financial year.

x. Risk Exposure:

Through its defined benefits obligation, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest Rate Risk - The defined benefits obligation calculated uses a discount rate based on Government bonds. If bond yields fall, the defined benefits obligation will tend to increase.

Salary Inflation Risk - Higher than expected increase in salary will increase the defined benefits obligation.

Longevity Risk - The present value of the defined benefits plan liability is calculated by reference to the best estimate of the mortality of plan participants, both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Investment Return Risk - Lower the expected investment return, higher will be the defined benefits obligation. c. Compensated Absences:

The Company''s employees are entitled for compensated absences, which are allowed to be accumulated and encashed as per the Company''s rule. The liability of compensated absences, which is non-funded, has been provided based on report of independent actuary using "Projected Unit Credit Methodâ. Accordingly, the Company has made provision for compensated absences for the year of ''511.03 lakhs (previous year '' 382.01 lakhs) and accumulated liability is '' 1,766.38 lakhs as of March 31, 2023 (previous year '' 1,562.25 lakhs).

43. SEGMENT REPORTING

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the decision maker at respective entity level in assessing the performance and deciding on allocation of resources. The Company, accordingly, has only one reportable business segment, i.e., âPharmaceuticals''.

In accordance with paragraph 4 of the Indian Accounting Standard (Ind AS 108), segment information has been given in the Consolidated Financial Statements of the Company, and therefore, no separate disclosure on segment information is given in these Standalone Financial Statements.

*The options granted represent the original grants as reduced by the lapsed due to resignations. It also includes an aggregate number of 123,650 options granted to the eligible employees of the subsidiary companies.

The above options include total of 1,545,483 performance-based option. Each vested option entitles the option grantee to apply for and be allotted one (1) equity share of '' 2 each in the Company, and the exercise period in respect of all the options is a period of ten (10) years from the date of grant.

The Scheme is compliant with the provisions of Securities and Exchange Board of India (Share-Based Employee Benefits and Sweat Equity) Regulations, 2021, the Companies Act, 2013, and other applicable rules and regulations. The options granted, exercise price, vesting period, and other terms and conditions applicable to the grants made are in compliance with the Scheme and applicable regulations.

48. The Company has adopted Ind AS 116, effective annual reporting period beginning April 01, 2019 and applied this Standard to its leases, retrospectively, with the cumulative effect of initially applying the Standard, recognised on the date of initial application, that is, April 01,2019.

On initial application, the Company measures lease liability at the present value of the remaining lease payments, discounted using the lessee''s incremental borrowing rate at the date of initial application, and measure that right-of-use asset an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the Balance Sheet immediately before the date of initial application.

50. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

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

a) Credit Risk

b) Liquidity Risk

c) Market Risk

Risk Management Framework:

The Company''s Board of Directors has overall responsibility for establishment of the Company''s risk management framework. The Management is responsible for developing and monitoring the Company''s risk management policies, under the guidance of the Audit Committee. The Management identifies, evaluates and analyses the risks to which the Company is exposed to and set appropriate mitigation measures and controls to monitor such risk and adherence to limits.

The Management periodically reviews its risk policy and systems to assess need for changes in the policies to adapt to the changes in the market conditions and align the same to the business of the Company. The Management, through its interaction and training to concerned employees, aims to maintain a disciplined and constructive control environment in which concerned employees understand their roles and the obligations. The Audit Committee oversees how the 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 to which the Company is exposed. The Audit Committee is assisted in its role by the internal auditor wherever required. Internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

a) Credit Risk:

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

The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit standards and financial strength. The Company''s exposure and credit ratings of its counterparties are continuously monitored, and the aggregate value of transactions is reasonably spread amongst the several counterparties.

Credit risk arising from derivative financial instruments and other balances with banks is limited, and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the reputed credit rating agencies.

As regards, credit risk for investment in mutual funds, the Company limits its exposure to credit risk by investing mainly in debt schemes issued by the mutual funds wherein the fund manager invests asset under management in highly rated instruments which are of high credit ranking from rating agency like CRISIL or the equivalent rating agency. The Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, the Company adjusts its exposure to various counterparties from time to time.

Credit risk from trade receivables is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from stockist, distributors and direct customers, and are mostly non-interest bearing. Trade receivables generally ranges from 30-days to 180-days credit term. Credit limits are established for customers based on internal criteria and any deviation in credit limit require approval of Head of the Department depending upon the quantum and overall business risk. Majority of the customers have been doing business with the Company for more than 3 years, and they are being monitored by individual business managers who deals with those customers. The Management monitors trade receivables on regular basis and take the suitable action, where needed, to control the receivables crossing set criterias/limits. Also, in the case, of international business, particularly new customers, the Management reviews the business risk by evaluating economic situation of the country and the customers, and generally starts the relation either on advance payment or on the basis of confirmed irrevocable letter of credit.

wide base, and hence, the Management considers risk with respect to trade receivable as low. Of the trade receivables, balance at the end of the year, '' 4,418.39 lakhs (March 31, 2022: '' 5,851.88 lakhs) is due from 2 related parties and '' 6,210.79 lakhs (March 31,2022: ''6,845.93 lakhs) is due from a single counter party which is in excess of 10% of total trade receivables.

For trade receivables, as a practical expedient, the Company determines credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables, and is adjusted for forwardlooking estimates.

b) 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.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash or cash equivalent, available to meet all its normal operating commitments in a timely and cost-effective manner. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels. The Company aims to maintain the level of its cash and cash equivalents, and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next three to six months.

Exposure to Liquidity Risk

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

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk comprises three types of risks:

i. Interest Rate Risk,

ii. Currency Risk, and

iii. Equity Price Risk.

Financial instruments affected by market risk include borrowings, trade payables, investments, trade receivables, loans and derivative financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has not used any interest rate derivatives.

The Company''s exposure to changes in interest rates relates mainly to outstanding long term debt. Interest rate for these debts is fixed for initial 3 years, and thereafter, 1 year MCLR Rate prevailing at that point of time. At present, the company does not have any interest rate risk for these debts for a period of around more than 2 years.

ii) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. Primarily, the exposure in foreign currencies are denominated in USD, EURO, RUBLE, AED and AUD. At any point of time, the Company covers foreign currency risk by taking appropriate percentage of its net foreign currency exposure by entering into foreign exchange forward contracts on Anticipated Exposure basis, mostly with a maturity of less than one year from the reporting date. In respect of monetary assets and liabilities denominated other than in USD, EURO, RUBLE, AED and AUD, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address shortterm imbalances.

All such hedged transactions are carried out within the guidelines set by the Risk Management Committee. The Company does not enter into any derivative instruments for trading or speculative purposes.

Impact of Hedging Activities:

The Company uses foreign exchange forward contracts to hedge against the foreign currency risk of highly probable sales. Such derivative financial instruments are governed by the Company''s policies, approved by the Board of Directors, which provide written principles on the use of such instruments consistent with the Company''s risk management strategy. As the value of the derivative instrument generally changes in response to the value of the hedged item, the economic relationship is established.

Hedge effectiveness is determined at the inception of hedge relationship, and through periodic prospective effectiveness assessment to ensure that an economic relationship exists between the hedged item and hedging instruments. It is calculated by comparing changes in fair value of the hedged item, with the changes in fair value of the hedging instruments.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in profit or loss at the time of the hedge relationship rebalancing.

The Company does not have any material exposure to equity price risk, as there is no major investment in equity, except in its own subsidiaries, and accordingly, exposure to risk of changes in price is very low.

51. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity share capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to safeguard the Company''s ability to remain as a going concern and to maintain and optimal capital structure, so as to maximise shareholder''s value.

The Company manages its capital structure and makes adjustments in the light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. To maintain or adjust the capital structure, the Company may adjust the dividend payment

54. RECLASSIFICATION NOTE

The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to make them comparable.

55. UNFORESEEABLE LOSSES

The Company has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company did not have any long-term contracts (including derivative contracts) for which there were any material foreseeable losses.

56. IMPACT OF CODE ON SOCIAL SECURITY, 2020

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

57. EvENTS AFTER THE REPORTING PERIOD

Dividend:

The Board of Directors has recommended a final dividend of '' 9.25 per fully paid-up equity shares (face value of '' 2/- each) amounting to '' 7,157.43 lakhs for the financial year 2022-23, which is based on relevant share capital as on March 31,2023. The actual dividend amount will be dependent on the relevant share capital outstanding as on record date/book closure. The recommended dividend is subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.

Sub-Division of Equity Shares:

The Board of Directors of the Company, at its meeting held on May 24, 2023, has approved sub-division of each equity share of face value of '' 2 fully paid-up into 2 equity shares of face value of '' 1 each fully paid-up, subject to approval of the shareholders at the ensuing Annual General Meeting of the Company.

58. UNCERTAINTIES Relating TO The Geopolitical SITUATION IN RUSSIA AND UKRAINE

The Company considered the uncertainties relating to the geopolitical situation in Russia and Ukraine, in assessing the recoverability of receivables, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. Based on its judgement, estimates and assumptions, including sensitivity analysis, the Company expects to fully recover the carrying amount of receivables, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions.

59. 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 that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly, lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2022

- Mody Family members holding 1.91% have been re-classified from Promoter/ Promoter group to Public on receipt of Stock exchange approval wef November 2, 2021. Therefore, during the year aggregate promoter/ promoter group holding in the Company decreased from 55. 91% to 54%.

Terms and rights attached to 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 and carries identical right as to dividend. These shares are not subject to any restrictions. The Company declares and pays dividend in Indian Rupees. 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 of the Company, the holders of equity shares will be entitled to receive 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 shareholder.

Aggregate number of bonus shares issued, shares issued for consideration other than cash during the period of five years immediately preceding the reporting date

The Company has not issued any bonus shares, shares for consideration other than cash during five years immediately preceding the reporting date.

Buy-back of Equity Shares

For the period of five years immediately preceding the date as at which the Balance Sheet is prepared, the Company has bought back, in aggregate, 7,537,878 (as at Previous year: 7,537,878) equity shares of '' 2 each.

Equity shares reserved for issue under employee stock options scheme

For number of stock options against which equity shares to be issued by the Company upon vesting and exercise of those stock options by the option holders as per the relevant schemes - refer note 48.

For movement from the beginning of the reporting period to the end of the reporting period, please refer "Standalone Statement of Changes in Equityâ.

Nature and Purpose of Reserves

A. Investment Allowance Reserve (utilised) and Capital Reserve (transferred from Amalgamating Company)

This Reserve was created on amalgamation of J. B. Chemicals and Pharmaceuticals P Ltd. with this Company w.e.f. April 1, 1984 (appointed date).

B. Capital Reserve

Arose pursuant to forfeiture and reissue of shares.

C. Contingency Reserve

This reserve has been created out of retained earnings, as a matter of prudence, to take care of any unforeseen adverse contingencies.

D. Securities Premium Reserve

The amount received in excess of face value of the equity shares is recognised in Securities Premium. In case of equity-settled share-based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. This reserve is utilised in accordance with the provisions of the Act.

E. Capital Redemption Reserve

Transfered from general reserve on account of buy back of shares as per Section 69 of the Companies Act, 2013.

F. General Reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to General Reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to General Reserve is not required under the Companies Act, 2013. The General reserve is used from time to time to transfer profit from retained earnings for appropriation purpose.

G. Retained Earnings

Retained Earnings are the profits that the company has earned till date, less any transfer to General Reserve, dividends or other distribution paid to shareholders.

H. Employee Stock Options Reserve

Employee stock options reserve is used to record the share-based payments, expense under the various ESOP schemes as per SEBI regulations. The reserve is used for the settlement of ESOP (refer note 48).

I. Cash Flow Hedge Reserve

For the forward contracts designated as cash flow hedges, the effective portion of the fair value of forward contracts is recognised in cash flow hedging reserve under other equity. Upon de-recognition, amounts accumulated in other comprehensive income are taken to profit or loss at the same time as the related cash flow (refer note 51C (ii)a,b and c).

38 A. COMMITMENTS AND CONTINGENCIES:

Commitments

â¢ Capital Commitments:

('' in lakhs)
Particulars	As at March 31,2022	As at March 31, 2021
Estimated amounts of contracts remaining to be executed on capital account and not	1,493.75	414.74
provided (net of advances)

â¢ Other Commitments:

The Company has imported capital goods including spares under the Export Promotion Capital Goods Scheme (EPCG) utilising the benefit of zero rate or concessional rate of Customs duty. These benefits are subject to the fulfilment of certain export obligation within the stipulated period of time under the EPCG Scheme. Such export obligation remaining to be fulfilled at the year-end is as follows:

('' in lakhs)
Particulars		As at March 31,2022	As at March 31, 2021
Export obligati	on under EPCG Scheme	405.85	4,870.73

CONTINGENCIES

â¢ Claim against the Company not acknowledged as debt include claim relating to pricing, commission, etc.

â¢ It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of our pending resolution of the respective proceedings as it is determined only on receipt of judgements/decisions pending with various forum/ authorities.

â¢ The Company does not expect any reimbursements in respect of the above contingent liabilities.

â¢ The Company''s pending litigations comprise of proceedings pending with various direct tax, indirect tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities, where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.

â¢ Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd (UPLL), which was acquired by the Company on a going concern basis, had received demand notices from Department of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of '' 461.47 lakhs in respect of the Bulk Drug Metronidazole and a further sum of '' 591.05 lakhs in respect of the Bulk Drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the Bulk Drugs at alleged lower cost. The Company has filed Writ Petitions bearing No 446 of 2008 in respect of demand for Oxyphenbutazone and Writ Petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These Writ Petitions have been admitted and the Hon. High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the Writ Petition on the Company furnishing security as per the Orders. The Company has already furnished the Bank Guarantee of '' 402.35 lakhs as Security. As per the legal advice received by the Company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

41. Pursuant to the Business Transfer Agreement between the Company and Lekar Pharma Limited:

Pursuant to the Business Transfer Agreement, entered during the previous year, between the Company and Lekar Pharma Limited ("the Sellerâ), a related party up to August 31,2020, the Company has acquired the Pharmaceutical Business Undertaking of the Seller as a going concern by way of a slump sale for a consideration of '' 850.00 lakhs. An amount of '' 431.92 lakhs, being the excess of consideration paid, as above, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed of '' 418.08 lakhs has been recognised as Goodwill.

The sensitivity analysis above has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The method used for deriving sensitivity information and significant assumptions made did not change from the previous period.

ix. Investment Details:

The Company made annual contribution to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made or the break-down of the plan assets by investment type.

The Company expects to make a contribution of '' 1,147.67 lakhs (March 31,2021: '' 970.23 lakhs) to the defined benefits plans during the next financial year.

x. Risk exposure

Through its defined benefits obligation, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk - The defined benefits obligation calculated uses a discount rate based on Government bonds. If bond yields fall, the defined benefits obligation will tend to increase.

Salary inflation risk - Higher than expected increase in salary will increase the defined benefits obligation.

Longevity risk - The present value of the defined benefits plan liability is calculated by reference to the best estimate of the mortality of plan participants, both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Investment return risk - Lower the expected investment return, higher will be the defined benefits obligation.

c. Compensated Absences:

The Company''s employees are entitled for compensated absences, which are allowed to be accumulated and encashed as per the Company''s rule. The liability of compensated absences, which is non-funded, has been provided based on report of independent actuary using "Projected Unit Credit Methodâ. Accordingly, the Company has made provision for compensated absences for the year of '' 382.01 lakhs (Previous Year '' 477.17 lakhs) and accumulated liability is '' 1,562.25 lakhs as of March 31, 2022 (Previous Year '' 1,395.94 lakhs).

44. SEGMENT REPORTING

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the decision maker''s at respective entity level in assessing the performance and deciding on allocation of resources. The Company, accordingly has only one reportable business segment i.e., âPharmaceuticals''.

In accordance with paragraph 4 of the Indian Accounting Standard (Ind AS 108), segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these standalone financial statements.

45. DEFERRED TAX

The major components of deferred tax liabilities and assets arising on account of timing differences are as follows:

As at March 31, 2022

51. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

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

a) Credit Risk

b) Liquidity Risk

c) Market Risk

Risk Management framework

Company''s Board of Directors has overall responsibility for establishment of the Company''s risk management framework. The Management is responsible for developing and monitoring the Company''s risk management policies, under the guidance of Audit Committee. The Management identifies, evaluates and analyses the risks to which the Company is exposed to and set appropriate mitigation measures and controls to monitor such risk.

The Management periodically reviews its risk policy and systems to assess need for changes in the policies to adapt to the changes in market conditions and align the same to the business of the Company. The Management through its interaction and training to concerned employees aims to maintain a disciplined and constructive control environment in which concerned employees understand their roles and obligations. The Audit Committee oversees how the 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 to which the Company is exposed. The Audit Committee is assisted in its role by the internal auditor wherever required. Internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

a) Credit Risk:

The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit standards and financial strength. The Company''s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the several counterparties.

Credit risk arising from derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the reputed credit rating agencies.

As regards credit risk for investment in mutual funds, the Company limits its exposure to credit risk by investing mainly in debt schemes issued by the mutual funds wherein the fund manager invests asset under The Management in highly rated instruments which are of high credit ranking from rating agency like CRISIL or the equivalent rating agency. The Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, the Company adjusts its exposure to various counterparties from time to time.

Credit risk from trade receivables is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from stockist, distributors and direct customers and are mostly non-interest bearing. Trade receivables generally ranges from 30-days to 180-days credit term. Credit limits are established for customers based on internal criteria and any deviation in credit limit require approval of Head of the department depending upon the quantum and overall business risk. Majority of the customers have been doing business with the company for more than 3 years and they are being monitored by individual business managers who deals with those customers. The Management monitors trade receivables on regular basis and take suitable action where needed to control the receivables crossing set criteria / limits. Also, in case of international business, particularly new customers, the Management reviews the business risk by evaluating economic situation of the country and the customers and generally starts the relation either on advance payment or on the basis of confirmed irrevocable letter of credit.

The Management does an impairment analysis at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. Further, the Company''s customers base is widely distributed both economically as well as geographically and in view of the same, the quantum risk also gets spread across wide base and hence the Management considers risk with respect to trade receivable as low. Of the trade receivables balance at the end of the year, '' 5,851.88 lakhs (March 31, 2021: '' 6,335.07 lakhs) is due from 2 related parties and '' 6,845.93 lakhs (March 31, 2021: '' 6,284.42 lakhs) is due from a single counter party which is in excess of 10% of total trade receivables.

b) 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.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash or cash equivalents available to meet all its normal operating commitments in a timely and cost-effective manner. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels. The Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next three to six months.

c) 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 conditions. Market risk comprises three types of risks;

i. Interest Rate Risk

ii. Currency Risk and

iii. Equity Price Risk.

Financial instruments affected by market risk include borrowings, trade payables, investments, trade receivables, loans and derivative financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Interest Rate Risk:

ii) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. Primarily, the exposure in foreign currencies are denominated in USD, EURO, RUBLE and AED. At any point of time, the Company covers foreign currency risk by taking appropriate percentage of its net foreign currency exposure by entering into forward exchange contracts on past performance basis mostly with a maturity of less than one year from the reporting date. In respect of monetary assets and liabilities denominated other than in USD, EURO, RUBLE and AED, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

All such hedged transactions are carried out within the guidelines set by the risk management committee. The Company does not enter into any derivative instruments for trading or speculative purposes.

Impact of hedging activities

The Company uses foreign exchange forward contracts to hedge against the foreign currency risk of highly probable sales. Such derivative financial instruments are governed by the Company''s policies approved by the Board of Directors, which provide written principles on the use of such instruments consistent with the Company''s risk management strategy. As the value of the derivative instrument generally changes in response to the value of the hedged item, the economic relationship is established.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in profit or loss at the time of the hedge relationship rebalancing.

The Company is mainly exposed to changes in USD, EURO, RUBLE, AED and AUD. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD, EURO, RUBLE, AED and AUD against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents the Management''s assessment of reasonably possible change in foreign exchange rate.

iii) Equity Price Risk:

The Company does not have any exposure to equity price risk, as there is no major investment in equity except in its own subsidiaries and accordingly, exposure to risk of changes in price is very low.

52. CAPITAL MANAGEMENT:

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or buy back of shares. The current capital structure of the company is equity based with low financing through borrowings. The company is not subject to any externally imposed capital requirement.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2022 and March 31,2021.

55. RECLASSIFICATION NOTE

The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to make them comparable.

56. UNFORESEEABLE LOSSES

The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company did not have any long term contracts (including derivative contracts) for which there were any material foreseeable losses.

57. IMPACT OF CODE ON SOCIAL SECURITY, 2020

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

58. EVENTS AFTER THE REPORTING PERIOD

a) Dividend

The Board of Directors has recommended a final dividend of '' 8.00 per fully paid-up equity shares (face value of '' 2/- each) amounting to '' 6182.56 lakhs for the financial year 2021-22, which is based on relevant share capital as on March 31,2022. The actual dividend amount will be dependent on the relevant share capital outstanding as on record date / book closure. The recommended dividend is subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.

b) Acquisition of trademark assignment of Azmarda from Novartis AG:

On April 01,2022, the Board of Directors of the Company approved the trademark assignment of Azmarda brand, for use and commercialisation within India, from Novartis AG, Switzerland for a consideration of USD 32.5 million (INR ~ 246,00 lakhs). The transaction was completed on April 11, 2022.

59. ESTIMATION OF UNCERTAINTIES RELATING TO THE GLOBAL HEALTH PANDEMIC FROM COVID-19 ("COVID-19")

Based on the internal and external information available up to the date of approval of these financial statements by the Board of Directors, the Company continues to believe that the impact of Covid-19 on its business, assets, internal financial controls, profitability and liquidity, both present and future, would be limited and there is no indication of any material impact on the carrying amounts of inventories, tangible and intangible assets, investments, trade receivables and other financial assets. However, concerns of Covid-19 pandemic still continue as availability of vaccine on mass scale may take time and hence, the Company continues to follow necessary safety guidelines. The eventual outcome of the impact of the global health pandemic may be different from those estimated as on the date of approval of these financial statements and the Management will continue to closely monitor the changes to economic conditions in future and its impact on the Company.

60. 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 that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2018

1. GENERAL INFORMATION

J. B. Chemicals & Pharmaceuticals Limited (the Company) is a public limited company incorporated in India (CIN: L24390MH1976PLC019380) having its registered office in Mumbai. The Company is engaged in the business of manufacture and marketing of diverse range of pharmaceuticals formulations, herbal remedies and APIs.

These standalone financial statements for the year ended March 31, 2018 were approved for the issue by the Board of Directors vide their resolution dated May 25, 2018.

2. STANDARDS ISSUED BUT NOT YET EFFECTIVE:

On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 1, 2018.

2.1 Issue of Ind AS 115 - Revenue from Contracts with Customers

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

2.2 Amendment to Existing issued Ind AS

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

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

ii. Ind AS 40 - Investment Property

iii. Ind AS 12 - Income Taxes

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

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

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

3. KEY ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS:

The preparation of the Companyâs financial statements requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The Company evaluates these estimates and assumptions based on the most recently available information.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:

a) Income taxes and Deferred tax assets:

The Companyâs tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Deferred tax asset is recognised for all the deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. The management assumes that taxable profit will be available while recognizing the deferred tax assets.

b) Property, Plant and Equipment:

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life as prescribed in the Schedule II of the Companies Act, 2013 and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

c) Intangible assets:

Internal technical or user teamassesses the remaining useful lives of Intangible assets. Management believes that assigned useful lives are reasonable.

d) Impairment of non-financial assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Units (CGUâs) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.

e) Impairment of financial assets:

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

f) Recognition and measurement of defined benefit obligation:

The obligation arising from the defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation and vested future benefits and life expectancy. The discount rate is determined with reference to market yields at the end of the reporting period on the government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations.

g) Recognition and measurement of other provisions:

The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the balance sheet date. The actual outflow of resources at a future date may, therefore, vary from the figure included in other provisions.

h) Contingencies:

Management Judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against Company as it is not possible to predict the outcome of pending matters with accuracy.

i) Allowances for uncollected trade receivable and advances:

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated amounts which are irrecoverable. Individual trade receivables are written off when management deems them not collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets. The impairment provisions for financial assets are based on assumption about risk of default and expected loss rates. Judgement in making these assumptions and selecting the inputs to the impairment calculation are based on past history, existing market condition as well as forward looking estimates at the end of each reporting period.

The Company has only one class of issued shares having par value of Rs.2/-. Each holder of equity shares is entitled to one vote per share and carries identical right as to dividend. These shares are not subject to any restrictions.

Buy-back of Equity Shares

The Board of Directors, at its meeting held on May 23, 2017, approved a proposal for the Company to buy-back its fully paid-up equity shares of face value of Rs.2/- each from the eligible equity shareholders of the Company for an amount not exceeding Rs.5,000 lakhs, representing 3.85% of the paid up equity share capital and free reserves (including securities premium account) as per audited standalone financial statement of the Company as at March 31, 2017 and was within the statutory limit applicable for buy-back with authority of Board of Directors. The Buy-back offer comprised a purchase of 1,250,000 equity shares representing 1.47% of the paid up equity shares of the Company at a price of Rs.400/- per Equity share. The buy-back was offered to all eligible equity shareholders of the Company as on the Record Date (i.e June 2, 2017) on a proportionate basis through the âTender offerâ route. The Company completed the buy-back on July 25, 2017 and 1,250,000 equity shares were extinguished on July 27, 2017. The Company has funded the buy-back from its general reserve. In accordance with Section 69 of the Companies Act, 2013, the Company has created âCapital Redemption Reserveâ of Rs.25 lakhs equal to the nominal value of the shares bought back as an appropriation from general reserve.

Nature and purpose of reserves

A. Capital Reserves (transferred from amalgamating company)

This Reserve was created on amalgamation of J. B. Chemicals and Pharmaceuticals Pvt. Ltd. with this Company w.e.f. April 1, 1984 (appointed date).

B. Capital Reserve

Arose pursuant to forfeiture and reissue of shares.

C. Contingency Reserve

This Reserve has been created out of retained earnings, as a matter of prudence, to take care of any unforseen adverse contingencies.

D. Securities Premium Reserve

The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as Securities Premium Reserve.

E. Capital Redemption Reserve

Transfer from General Reserve on account of buy back of shares as per Section 69 of the Companies Act, 2013.

F. General Reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to General Reserve pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to General Reserve is not required under the Companies Act, 2013.

G. Retained Earnings

Retained Earnings are the profits that the Company has earned till date, less any transfer to General Reserve, dividends or other distribution paid to shareholders.

Government grant has been received for the purpose of purchase of certain items of Property, Plant & Equipment. The condition against which the grant is received is the export obligation to be fulfilled within certain specified period. (refer note no. 38)

The above infromation regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

The delayed payment has been computed having regard to specified credit period of 45 days under Micro, Small and Medium Enterprise Development Act, 2006. However there is no delay in terms of agreed credit terms with these suppliers.

4. COMMITMENTS & CONTINGENCIES:

COMMITMENTS

- Capital Commitments:

- Other Commitments:

The Company has imported capital goods including spares under the Export Promotion Capital Goods Scheme (EPCG) utilizing the benefit of zero rate or concessional rate of Customs duty. These benefits are subject to the fulfilment of certain export obligation within the stipulated period of time under the EPCG Scheme. Such export obligation remaining to be fulfilled at the year-end is as follows:

CONTINGENCIES

- Claim against the company not acknowledged as debts

Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the Company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs.461.47 lakhs in respect of the Bulk Drug Metronidazole and a further sum of Rs.591.05 lakhs in respect of the Bulk Drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the Bulk Drugs at alleged lower cost. UPLL has filed review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The Company has filed Writ Petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & Writ Petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These Writ Petitions have been admitted and the Hon. High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the Writ Petition on the Company furnishing security as per the Orders. The Company has already furnished the Bank Guarantee of Rs.402.35 lakhs as Security. As per the legal advice received by the Company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

5. Travelling expenses of field personnel include incidental expenses on conveyance, postage, stationery and miscellaneous expenses etc.

6. Details of Research & Development Expenditure incurred during the year at the following R&D Centers:

7. Excise Duty under âOther expensesâ includes the differential excise duty on closing stock and opening stock of finished goods and excise duty paid on the goods distributed as free goods/medical samples amounting to Rs. (39.28) lakhs (Previous year Rs.525.81 lakhs).

8. In accordance with Ind AS 18 on âRevenueâ and Schedule III to the Companies Act, 2013, Sales for the previous year ended March 31, 2017 and for the period April 1, 2017 to June 30, 2017 were reported gross of Excise Duty and net of Value Added Tax (VAT)/ Sales Tax. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Services Tax (GST) with effect from July 1, 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST and accordingly the same is not recognized as part of sales as per the requirements of Ind AS 18. Accordingly, Revenue from operation for the year ended March 31, 2018 are not comparable with the figures of the previous year.

9. EMPLOYEE BENEFITS:

a. Defined Contribution Plan

Contribution to defined contribution plan, recognized as expense for the year are as under:

b. Defined Benefit Plan- gratuity

Gratuity is payable to all eligible employees of the Company on retirement, death, permanent disablement and resignation in terms of the provision of the Payment of Gratuity Act, 1972. The benefits would be paid at the time of separation.

ix. Investment details:

The Company made annual contribution to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made or the break-down of the plan assets by investment type.

10. SEGMENT REPORTING:

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the decision maker, in assessing the performance and deciding on allocation of resources. The Companyâs decision maker are the Chairman and Whole time directors and the Company has only one reportable business segment i.e. âPharmaceuticalsâ.

11. RELATED PARTY DISCLOSURE:

Related party disclosure as required by Ind AS 24, âRelated Party Disclosuresâ notified under Section 133 of the Companies Act, 2013, are given below:

Names and Relationships of the Related Parties:

I Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories

b. Unique Pharmaceutical Laboratories FZE

c. Biotech Laboratories (Pty.) Ltd. (Through Unique Pharmaceutical Laboratories FZE )

II Associate Concerns/Trusts/Companies with whom transactions have taken place during the year:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Lekar Pharma Ltd.

g. J.B. Mody Enterprises LLP

h. Ansuya Mody Enterprises LLP

i. Dinesh Mody Ventures LLP

j. Kumud Mody Ventures LLP

k. Shirish Mody Enterprises LLP

l. Bharati Mody Ventures LLP

m. Synit Drugs Pvt. Ltd.

n. Unique Pharmaceutical Laboratories Ltd.

o. Ifiunik Pharmaceuticals Ltd.

p. Namplas Chemicals Pvt. Ltd.

q. Gemma Jewellery Pvt. Ltd

r. Jyotindra Mody Ventures LLP

s. D. B. Mody Entreprises LLP

t. Shirish Mody Property LLP

III Key Management Personnel (KMP):

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

d. Shri Bharat P Mehta

e. Shri Pranabh D. Mody

f. Shri Kamlesh L. Udani

g. Shri Nirav S. Mody

h. Shri Jay B. Mehta

i. Mrs. K. V. Gosalia

j. D. B. Mody â HUF

k. S. B. Mody - HUF

IV Relative of KMP:

a. Mrs. Kumud D. Mody

b. Mrs. Bharati S. Mody

c. Mrs. Pallavi B. Mehta

d. Mrs. Purvi U. Asher

e. Mrs. Deepali A. Jasani

f. Mrs. Priti R. Shah

12. OPERATING LEASES:

The Company has entered into cancellable operating leases in respect of office premises, godown and others, which are cancellable by giving appropriate notices as per respective agreements. During the year Rs.858.20 lakhs (Previous year Rs.822.03 lakhs) has been charged to Statement of Profit and Loss on account of compensation rent.

13. CSR EXPENDITURE:

Gross amount required to be spent during the year Rs.391.86 lakhs (Previous year Rs.346.39 lakhs).

14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:

The Companyâs financial liabilities comprise mainly of borrowings, trade payables and other payables. The Companyâs financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

Company has exposure to following risks arising from financial instruments:

a) Credit risk

b) Liquidity risk

c) Market risk

Risk management framework

Companyâs board of directors has overall responsibility for establishment of Companyâs risk management framework. Management is responsible for developing and monitoring Companyâs risk management policies, under the guidance of Audit Committee. Management identifies, evaluate and analyses the risks to which the Company is exposed to and set appropriate risk limits and controls to monitor risks and adherence to limits.

Management periodically reviews its risk policy and systems to assess need for changes in the policies to adapt to the changes in market conditions and align the same to the business of the Company. Management through its interaction and training to concerned employees aims to maintain a disciplined and constructive control environment in which concerned employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks to which Company is exposed. The Audit Committee is assisted in its role by the internal auditor wherever required. Internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

a) Credit risk:

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

The Company has adopted a policy of only dealing with counter parties that have sufficiently high credit standards and financial strength. The Companyâs exposure and credit ratings of its counter parties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the several counter parties.

As regard, credit risk for investment in mutual funds, the Company limits its exposure to credit risk by investing mainly in debt securities issued by mutual funds which are of high credit ranking from rating agency like CRISIL or the equivalent rating agency. Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, Company adjusts its exposure to various counterparties from time to time.

Credit risk from trade receivables is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from stockist, distributors and direct customers and are non-interest bearing. Trade receivables generally ranges from 30 days to 180 days credit term. Credit limits are established for all customers based on internal criteria and any deviation in credit limit require approval of Head of the department and / or Directors depending upon the quantum and overall business risk. Majority of the customers have been doing business with the Company for more than 3 years and they are being monitored by individual business managers who deals with those customers. Management monitors trade receivables on regular basis and take suitable action where needed to control the receivables crossing set criteria / limits. Also, in case of international business, particularly new customers, management reviews the business risk by evaluating economic situation of the country and the customers and generally starts the relation either on advance payment or on the basis of confirmed irrevocable letter of credit.

Management does an impairment analysis at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. Further, the Companyâs customers base is widely distributed both economically as well as geographically and in view of the same, the quantum risk also gets spread across wide base and hence management considers risk with respect to trade receivable as low.

For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

b) Liquidity risk:

Liquidity risk is the risk that Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. Companyâs objective is to, at all times maintain optimum level of liquidity to meet its cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash or cash equivalent available to meet all its normal operating commitments in a timely and cost effective manner. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels. Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next three to six months.

c) 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 three types of risks:

i. Interest rate risk;

ii. Currency risk; and

iii. Equity price risk.

Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is very low. The Company has not used any interest rate derivatives.

ii) Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. Primarily, the exposure in foreign currencies are denominated in USD, EURO and RUBLE. At any point in time, Company covers foreign currency risk by taking appropriate percentage of its net foreign currency exposure by entering into forward exchange contracts on past performance basis mostly with a maturity of less than one year from the reporting date. In respect of monetary assets and liabilities denominated other than in USD, EURO and RUBLE, Companyâs policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short term imbalances.

Details of Hedged exposure in foreign currency denominated monetary items:

The Company enters into forward exchange contracts to hedge against its foreign currency exposure relating to the underlying transactions based on past performance. The Company does not enter into any derivative instruments for trading or speculative purpose.

The forward exchange contracts used for hedging foreign currency exposure and outstanding as at reporting date are as under:

iii) Equity price risk:

Company does not have any exposure to equity price risk, as there is no major investment in equity except in its own subsidiaries and accordingly, exposure to risk of changes in price is very low.

15. CAPITAL MANAGEMENT:

For the purpose of the Companyâs capital management, capital includes issued equity share capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to safeguard the Companyâs ability to remain as a going concern and to maintain and optimal capital structure so as to maximise shareholderâs value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plan. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or buy back of shares. The current capital structure of the Company is equity based with low financing through borrowings. The Company is not subject to any externally imposed capital requirement.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Fair value of cash and cash equivalents, short term loans, trade receivables, trade payables, other financial assets/ liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended March 31, 2017.

During the reporting period ended March 31, 2018 and March 31, 2017, there were no transfers between level 1, level 2 and level 3 fair value measurements.

Level 3 Fair Values

The following tables shows a reconciliation of the opening and closing balances for Level 3 fair value.

A one percentage point change in the unobservable inputs used in fair valuation of level 3 assets or liabilities does not have significant input in its value.

16. EVENTS AFTER THE REPORTING PERIOD:

The Board of Directors have recommended dividend of Rs.2/- per fully paid up equity shares of Rs.2/- each amounting to Rs.1,671.40 lakhs plus Rs.343.56 lakhs dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on March 31, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on record date / book closure.

17. Figures of previous year have been re-grouped, re-arranged and re-cast, wherever considered necessary. Figures in brackets indicate corresponding figures of previous year.

Mar 31, 2017

1. GENERAL INFORMATION

These standalone financial statements for the year ended March 31, 2017 were approved for issue by the Board of Directors vide its resolution dated May 23, 2017.

2. STANDARDS ISSUED BUT NOT YET EFFECTIVE:

- Ind AS 115 issued in February 2015, establishes a five step model to account for revenue from contracts with customer. Under this Ind AS, the revenue is recognised at an amount that reflects the consideration in exchange for transferring goods and services which an entity expects to be entitled. The Company is in process of analyzing the impact of this proposed standard and shall adopt the same from the required effective date.

- In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendment to Ind AS 7, âStatement of cash flowsâ and Ind AS 102 âShare-based paymentâ. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2 âShare-based paymentâ respectively. The amendments are applicable to the Company from April 1, 2017.

Amendments to Ind AS 7

The amendments to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

These amendments are effective for annual period beginning on or after April, 1, 2017. Application of the amendments will result in additional disclosures provided by the Company.

Amendments to Ind AS 102

The amendment to Ind AS 102 provides specific guidance on measuring the cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

The Company is not having any cash settled share-based payment. No impact is currently foreseen.

3. KEY ACCOUNTING JUDGMENTSâ, ESTIMATES AND ASSUMPTIONS:

The preparation of the Companyâs financial statements requires the management to make judgmentsâ, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

A) Income taxes and Deferred tax assets:

B) Property, Plant and Equipment:

C) Intangible assets:

Internal technical or user team assesses the remaining useful lives of Intangible assets. Management believes that assigned useful lives are reasonable.

D) Impairment of non-financial assets:

E) Impairment of financial assets:

F) Recognition and measurement of defined benefit obligation:

G) Recognition and measurement of other provisions:

H) Contingencies:

Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

I) Allowances for uncollected trade receivable and advances:

Shares reserved for issue under ESOP

In the year 2004, the Company has instituted the Employees Stock Option Scheme, under which 2,500,000 equity shares of Rs.2 each have been reserved. Under the Scheme, the options are granted at an amount equal to ninety five percent of the average daily closing price of the shares of the Companyâs share quoted on National Stock Exchange of India Ltd. During the period of twelve weeks preceding the date of grant. These options vest in four equal instalments and subject to other provisions of the Scheme, are exercisable within a period of five years from the respective date of vesting.

NATURE AND PURPOSE OF RESERVES

A. Capital Reserves (transferred from amalgamating company)

This was created on amalgamation of J. B. Chemicals and Pharmaceuticals Pvt. Ltd. with this Company w.e.f. April 1, 1984 (appointed date).

B. Capital reserves

Arose pursuant to forfeiture and re-issue of shares.

C. Contingency reserve

This reserve has been created out of retained earnings, as a matter of prudence, to take care of any unforseen adverse contingencies.

D. Securities premium reserve

E. Statutory reserve

This reserve is acquired pursuant to the Scheme of Amalgamation of six investment companies which got amalgamated with the Company from the appointed date April 1, 2014 in terms of the order of the Honâble Bombay High Court and in terms of the requirement of Reserve Bank of India Act, 1934. During the financial year 2015-16, the same was transferred to General Reserve pursuant to the approval from the Reserve Bank of India.

F. General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013

G. RETAINED EARNINGS

Retained earnings are the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distribution paid to shareholders.

4. COMMITMENTS & CONTINGENCIES: COMMITMENTS

- Capital Commitments:

- Other Commitments:

The Company has imported capital good including spares under the Export Promotion Capital Goods Scheme (EPCG) utilizing the benefit of zero rate or concessional rate of Customs duty. These benefits are subject to the fulfillment of certain export obligation within the stipulated period of time under the EPCG Scheme.Such export obligation at the year-end aggregate to:

CONTINGENCIES

- Claim against the Company not acknowledged as debts

Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the Company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs.461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs.591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under Para 7(2) of DPCO 79 read with Para 14 of DPCO 87 and Para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has filed review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87.The Company has filed Writ Petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon. High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the Company furnishing security as per the orders. The Company has already furnished the bank guarantee as security. As per the legal advice received by the Company, there is no liability and accordingly no provision is being made in the Accounts for these claims and demands.

5. Traveling expenses of field personnel include incidental expenses on conveyance, postage, stationery and miscellaneous expenses, etc.

6. Details of Research & Development Expenditure incurred during the year at the following R&D Centers:

8. EMPLOYEE BENEFITS:

a. Defined Contribution Plan

Contribution to defined contribution plan, recognized as expenses for the year are as under:

b. Defined Benefit Plan-Gratuity

Gratuity is payable to all eligible employees of the company on retirement, death, permanent disablement and resignation in terms of the provision of the Payment of Gratuity Act, 1972. The benefits would be paid at the time of separation.

9. SEGMENT REPORTING:

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the decision maker, in assessing the performance and deciding on allocation of resources. The Companyâs decision makers are the Chairman and Whole time directors and the Company has only one reportable business segment i.e. âPharmaceuticalsâ.

10. DEFERRED TAX

The major components of deferred tax liabilities and assets arising on account of timing differences are as follows:

11. RELATED PARTY DISCLOSURE

Related party disclosure as required by Ind AS 24, âRelated Party Disclosuresâ notified under Section 133 of the Companies Act, 2013, are given below:

Names and Relationships of the Related Parties:

I Subsidiary Companies:

a. LLC Unique Pharmaceutical Laboratories.

b. J.B. Healthcare Pvt. Ltd. (Liquidated on March 2, 2016)

c. Unique Pharmaceutical Laboratories FZE

d. Biotech Laboratories (Pty.) Ltd. (Through Unique Pharmaceutical Laboratories FZE)

II Associate Concerns/Trusts/Companies with whom transactions have taken place during the year:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd. (Upto December 12, 2015)

g. J.B. Mody Enterprises LLP

h. Ansuya Mody Enterprises LLP

i. Dinesh Mody Ventures LLP j. Kumud Mody Ventures LLP

k. Shirish Mody Enterprises LLP l. Bharti Mody Ventures LLP

m. Synit Drugs Pvt. Ltd.

n. Unique Pharmaceutical Laboratories Ltd.

o. Ifiunik Pharmaceuticals Ltd.

p. Namplas Chemicals Pvt. Ltd.

q. Gemma Jewellery Pvt. Ltd.

r. Lekar Pharma Ltd.

s. Jyotindra Mody Ventures LLP

t. D. B. Mody Entreprises LLP

u. Shirish Mody Property LLP

III Key Management Personnel (KMP):

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

IV Relative of KMP:

a. Mr. Pranabh D. Mody

b. Mrs. Kumud D. Mody

c. Mrs. Bharati S. Mody

d. Mrs. Pallavi B. Mehta

e. Mrs. Purvi U.Asher

f. Mrs. Deepali A. Jasani

g. Mrs. Priti R. Shah

h Mr. Nirav S. Mody

i. Mrs. K. V. Gosalia

j. D. B. Mody-HUF

k. S. B. Mody-HUF

12. CSR EXPENDITURE

Gross amount required to be spent during the year Rs.346.39 lakhs. Amount spent during the year Rs.265.23 lakhs as detailed hereunder:

13. As required under section 186(4) of the Companies Act, 2013, the particulars of loans and guarantees given and investments made during the year are as follows :

14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Company has exposure to following risks arising from financial instruments:

a) Credit risk

b) Liquidity risk

c) Market risk

Risk management framework

Companyâs board of directors has overall responsibility for establishment of Companyâs risk management framework. Management is responsible for developing and monitoring Companyâs risk management policies, under the guidance of Audit Committee. Management identifies, evaluates and analyses the risks to which the Company is exposed to and set appropriate risk limits and controls to monitor risks and adherence to limits.

Management periodically reviews its risk policy and systems to assess need for changes in the policies to adapt to the changes in market conditions and align the same to the business of the Company. Management through its interaction and training to concerned employees aims to maintain a disciplined and constructive control environment in which concerned employees understand their roles and obligations. The Audit committee oversees how management monitors compliance with Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks to which Company is exposed. The Audit committee is assisted in its role by the internal auditor wherever required. Internal auditor undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

a) Credit risk:

The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit standards and financial strength. The Companyâs exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the several counterparties.

As regards, credit risk for investment in mutual funds, the Company limits its exposure to credit risk by investing mainly in debt securities issued by mutual funds which are of high credit ranking from rating agency like CRISIL or the equivalent rating agency. Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, Company adjusts its exposure to various counterparties from time to time.

Credit risk from Trade receivables is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from stockists, distributors and direct customers and are non-interest bearing. Trade receivables generally ranges from 30 - days to 180 - days credit term. Credit limits are established for all customers based on internal criteria and any deviation in credit limit require approval of Head of the department and / or Directors depending upon the quantum and overall business risk. Majority of the customers have been doing business with the company for more than 3 years and they are being monitored by individual business managers who deals with those customers. Management monitors trade receivables on regular basis and take suitable action where needed to control the receivables crossing set criteria / limits. Also, in case of international business, particularly new customers, management reviews the business risk by evaluating economic situation of the country and the customers and generally starts the relation either on advance payment or on the basis of confirmed irrevocable letter of credit.

Expected credit loss for trade receivables under simplified approach as at the end of each reporting period is as follows:

b) Liquidity risk:

Liquidity risk is the risk that Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash or cash equivalent available to meet all its normal operating commitments in a timely and cost-effective manner. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels. Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next three to six months.

c) 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 three types of risks;

i. interest rate risk

ii. currency risk and;

iii. Equity price risk.

Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i. Interest rate risk:

ii. Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. Primarily, the exposure in foreign currencies are denominated in USD, EURO and Rubles. At any point in time, Company covers foreign currency risk by taking appropriate percentage of its net foreign currency exposure by entering into forward exchange contracts on past performance basis mostly with a maturity of less than one year from the reporting date. In respect of monetary assets and liabilities denominated other than in USD, EURO and Ruble, Companyâs policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

The carrying amounts of the Companyâs foreign currency denominated monetary items are as follows:

Details of Hedged exposure in foreign currency denominated monetary items

The Company enters into forward exchange contracts to hedge against its foreign currency exposure relating to the underlying transactions and based on past performance. The Company does not enter into any derivative instruments for trading or speculative purpose.

The forward exchange contracts used for hedging foreign currency exposure and outstanding as at reporting date are as under:

The Company is mainly exposed to changes in USD, EURO and RUBLE. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD, EURO and RUBLE against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents managementâs assessment of reasonably possible change in foreign exchange rate.

iii. Equity Price risk:

Company does not have any exposure to equity price risk, as there is no major investment in equity except in its own subsidiaries and accordingly, exposure to risk of changes in price is very low.

15. CAPITAL MANAGEMENT:

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plan. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or buy-back of shares. The current capital structure of the Company is equity based with low financing through borrowings. The Company is not subject to any externally imposed capital requirement.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017 and March 31, 2016.

During the reporting period ended March 31, 2017 and March 31, 2016, there were no transfers between level 1, level 2 and level 3 fair value measurements.

A one percentage point change in the unobservable inputs used in fair valuation of level 3 assets or liabilities does not have significant input in its value.

16. EVENTS AFTER THE REPORTING PERIOD

The board of directors have recommended dividend of Rs.1/- per fully paid up equity shares of Rs.2/- each amounting to Rs.848.19 lakhs plus Rs.172.67 lakhs dividend distribution tax for the financial year 2016-17, which is based on relevant share capital as on March 31, 2017. The actual dividend amount will be dependent on the relevant share capital outstanding as on record date / book closure.

17. During the year, Company had specified bank notes (SBN) and other denomination notes as defined in MCA notification G.S.R. 308 (E) dated March 30, 2017. The details of SBN held and transacted during the period from November 8, 2016 to December 30, 2016 are as follows:

* For the purposes of this clause, the term âSpecified Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8^th November, 2016.

18. FIRST-TIME ADOPTION OF IND AS

Pursuant to the Companies (Indian Accounting Standard) Rules, 2015, Company has adopted 31^st March, 2017 as reporting date for first time adoption of Indian Accounting Standard (Ind-AS). For all periods upto and including the year ended 31^st March, 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ).

For preparing these financial statements for the financial year ended on March 31, 2017, the opening balance sheet was prepared as at 1^st April, 2015 (the date of transition to Ind-AS) as per the provisions of Ind AS. Also, the figures for the year ended 31^st March, 2016 have been restated, regrouped and reclassified, wherever required to comply with Ind-AS and Schedule III to the Companies Act, 2013 and to make them comparable.

Ind AS 101 deals with First time adoption of Indian Accounting Standards which allows exemptions from the retrospective application and exemption from application of certain requirements of other Ind AS. On transition, the Company has availed/ adopted the following exemptions/exception as per Ind AS 101:

a) The Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1^st April, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

b) The Company has elected to continue with the carrying value of all of intangible assets recognized as at 1^st April, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.

c) Appendix C of Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. This assessment should be carried out at the inception of the contract or arrangement. The Company has used Ind AS 101 exemption and assessed all the arrangements based for embedded leases based on the conditions in place as at the date of transition.

d) The carrying amounts of the Companyâs investments in its subsidiary companies as per the financial statements which were prepared under Previous GAAP, are considered as deemed cost for measuring such investments in the opening Ind AS Balance Sheet.

e) The Company has elected not to apply Ind AS 103 - Business Combinations, retrospectively to past business combinations that occurred before 1^st April, 2015. Consequent to use of this exemption from retrospective application:

- The carrying amounts of assets and liabilities acquired pursuant to past business combinations and recognized in the financial statements prepared under Previous GAAP, are considered to be the deemed cost under Ind AS, on the date of acquisition. On the date of transition, measurement of such assets and liabilities is in accordance with respective Ind AS. Also, there is no change in classification of such assets and liabilities;

- The Company has not recognized assets and liabilities that neither were recognized in the financial statements prepared under Previous GAAP nor qualify for recognition under Ind AS in the Balance Sheet of the acquiree;

- The Company excluded from its opening Ind AS Balance sheet as at April 1, 2015, those assets and liabilities which were recognized in accordance with Previous GAAP but do not qualify for recognition as an asset or liability under Ind AS.

f) The requirement of Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance is opted to be applied prospectively to all grants received after the date of transition to Ind AS.

g) The Company is allowed to apply Ind AS 102 âShare Based Paymentâ to equity instruments that remain unvested as of transition date. Accordingly, the Company has not applied Ind AS 102 to equity instruments in Share Based Payment transactions pertaining to Employeeâs stock option scheme that vested before April 1, 2015.

FOOTNOTES

A. Government Grant:

Under Indian GAAP, the Company had adjusted the Government Grant related to Export Promotion Capital Goods (EPCG) scheme availed by the Company to the cost of fixed assets and the exports obligation was disclosed in the notes to financial statements whereas under Ind AS, the Company has recognized the Grant as a deferred revenue which is proportionately amortized to statement of profit and loss on the basis of actual exports made by the Company. The net impact on account of the same is increase in property, plant and equipment / Capital Work in Progress by Rs.384.35 lakhs as at March 31, 2016 and increase in government grant by Rs.400.84 lakhs as at March 31, 2016. Out of the grant of Rs.400.84 lakhs, Rs.17.22 lakhs (Rs.16.49 lakhs on account of stores and Rs.0.73 lakhs on account of fixed assets) is transferred to the income of the year and balance is treated as deferred income and depreciation of Rs.0.31 lakhs is recognized in the statement of profit or loss.

B. Investment in Mutual Fund & Equity Shares:

Under Indian GAAP, the Company accounted for long term investments in unquoted and quoted equity shares and Mutual fund as Investment measured at cost less provision for other than temporary diminution in the value of investments and for current investment cost or market value whichever is lower. Under Ind AS, the Company has designated such investments as FVTPL investments. The difference between the instruments fair value and Indian GAAP carrying amount of Rs.9,593.50 lakhs as at transition date and Rs.268.27 lakhs as at 31 March, 2016 has been recognized net of related corresponding deferred taxes of Rs.2,213.42 lakhs and Rs.61.90 lakhs in the retained earnings and in the statement of profit and loss respectively.

C. Security Deposit under lease contract:

Under Indian GAAP, the Company had accounted for financial Assets (primarily security deposit) at the undiscounted amount whereas under Ind AS, such financial assets are recognized at present value. Accordingly, security deposits and profit before tax are decreased by Rs.0.31 lakhs net (Rs.7.25 lakhs as lease rent and Rs.6.94 lakhs as interest on present value of deposit) as at March 31, 2016 and such security deposits and retained earnings are decreased by Rs.0.32 lakhs net (Rs.3.59 lakhs as lease rent and Rs.3.27 lakhs as interest on present value of deposit) as at April 1, 2015.

D. Forward Contract to hedge foreign currency risk:

The foreign exchange forward contract is recognized under Ind AS at the fair value, which was not recognized under Indian GAAP. The effect of this change resulting into decrease of Rs.45.09 lakhs and Rs.1.11 lakhs, in the retained earnings as at April 1, 2015 and in the statement of profit and loss for the year ended March 31, 2016.

E. Proposed Dividend:

Under Indian GAAP, proposed dividends including dividend distribution tax are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid. The effect of this change is an increase in the retained earnings as on April 1, 2015 by Rs.14,290.24 lakhs and as on March 31, 2016 by Rs.510.44 lakhs.

F. Excise Duty :

Excise duty of Rs.1,659.58 lakhs on account of sale of goods has been included in revenue as it is on own account because, it is liability of the manufacturer which forms part of the production, irrespective of whether goods are sold or not.

G. Defined Benefit Liabilities:

Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit or loss. Under Ind AS, re-measurements comprising of actuarial gains and losses and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Actuarial loss of Rs.30.98 lakhs as at 31 March, 2016 is recognized in OCI net of deferred tax.

H. Deferred tax

Under Indian GAAP, deferred tax is accounted using the income statement approach as per timing differences between taxable profits and accounting profits for the period. Ind AS 12 requires accounting for deferred taxes using the balance sheet approach as per temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences as on the transition date. The net impact of Rs.2,213.42 lakhs as at April 1, 2015 and Rs.61.90 lakhs as at March 31, 2016 on deferred tax liabilities on the transitional adjustments is recognized in retained earnings and to the statement of profit and loss respectively.

I. Other comprehensive income:

Under Indian GAAP, the Group has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to total comprehensive income as per Ind AS.

J. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

19. Figures of previous year have been re-grouped, rearranged and recast, wherever considered necessary. Figures in brackets indicate corresponding figures of previous year.

Mar 31, 2016

1.1 The Company had acquired fixed assets under the "Export Promotion Capital Goods" (EPCG) in the year 2013-14, 2014-15 and 2015-16 that has resulted in the saving of duty of Rs. 808.14 lakhs. As per the terms of the authorization granted under the Scheme, the Company has undertaken to achieve export commitment of Rs. 4,835.50 lakhs over the export obligation period of 6 years from the date of issuing the license. In the event of Company being unable to execute its export obligation by this period, the Company shall be liable to pay Custom duty for unfulfilled export obligation along with interest after expiry of the export obligation period. Further, during the year 2014-15, consequent to the debonding of two export oriented units, Company has undertaken to fulfill the export obligation of Rs. 2,784.98 lakhs.

1.2 The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the Company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs. 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs. 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has fled review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The Company has fled writ petitions bearing no. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition no. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon''ble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the Company furnishing security as per the Orders. The Company has already furnished the Bank guarantee as security. As per the legal advice received by the Company, there is no liability and accordingly no provision is being made in the Accounts for these claims and demands.

1.3 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 2,991.32 lakhs (Previous year Rs. 3,618.56 lakhs)

1.4 Surrender of 0% EPGC licenses or Status Holder Incentive Scrip (SHIS) amounting to Rs. 44.50 lakhs with applicable interest and levy of penalty of Rs.133.49 lakhs ordered by Dy. Director General of Foreign Trade, being disputed in appeal.

2. Travelling expenses of field personnel include incidental expenses on conveyance, postage, stationery and miscellaneous expenses, etc.

3. SEGMENT REPORTING:

The Company has one segment of activity namely ''Pharmaceuticals''.

4. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS-18, ''Related Party Disclosures'' notified under Section 133 of the Companies Act, 2013, are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories

b. J.B. Healthcare Pvt. Ltd. (Liquidated on 02.03.2016)

c. LLC Unique Pharmaceutical Laboratories

d. Unique Pharmaceutical Laboratories FZE

e. Biotech Laboratories (Pty.) Ltd. (Through Unique Pharmaceutical Laboratories FZE) (w.e.f. 18.12.2015 pursuant to purchase of shares of joint venture partner)

ii) Associate Concerns/Trusts/Companies/Joint Venture:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd. (Upto 17.12.2015)

g. J. B. Mody Enterprises LLP

h. Ansuya Mody Enterprises LLP

i. Dinesh Mody Ventures LLP

j. Kumud Mody Ventures LLP

k. Shirish Mody Enterprises LLP

l. Bharati Mody Ventures LLP

m. Synit Drugs Pvt. Ltd.

n. Unique Pharmaceutical Laboratories Ltd.

o. Ifunik Pharmaceuticals Ltd.

p. Namplas Chemicals Pvt. Ltd.

q. Gemma Jewellery Pvt. Ltd

r. Lekar Pharma Ltd.

s. Jyotindra Mody Ventures LLP

t. D. B. Mody Entreprises LLP

u. Shirish Mody Property LLP

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iv) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Kumud D. Mody

c. Mrs. Bharati S. Mody

d. Mrs. Pallavi B. Mehta

e. Mrs. Purvi U. Asher

f. Mrs. Deepali A. Jasani

g. Mrs. Priti R. Shah

h. Mr. Nirav S. Mody

i. Mrs. K. V. Gosalia

j. D. B. Mody-HUF

k. S. B. Mody-HUF

5. Disclosures as required by Accounting Standard 19, "Leases", notified under Section 133 of the Companies Act, 2013, are given below:

i. The Company has taken certain residential and office premises on operating lease / leave and license agreements on cancellable terms and are renewable by mutual consent on mutually agreeable terms.

ii. Lease payment in respect of non cancellable lease amounts to Rs. Nil (Previous year Rs. 44.96 lakhs) is included under the head Compensation Rent in Note "26".

6. FINANCIAL AND DERIVATIVE INSTRUMENTS

a) Derivative Instruments:

The Company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian rupee. The counter party to such forward contract is a bank. These contracts are entered to the hedge the foreign currency risks. Details of forward contracts outstanding as at the year end:

b) Foreign currency exposure at the year end not hedged by derivative instruments.

7. CSR EXPENDITURE

Gross amount required to be spent during the year Rs. 274.78 lakhs Amount spent during the year Rs. 243.58 lakhs as detailed hereunder:

8. Figures of previous year have been re-grouped, rearranged and recast, wherever considered necessary. Figures of previous year include figures of amalgamating companies & are, therefore, strictly not comparable with those of current year.

9. Figures in brackets indicate corresponding figures of previous year.

Mar 31, 2015

1) The above Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard 3 on "Cash Flow Statement".

2) Balance with Banks include Rs. 12.50 Lakhs (Previous Year Rs. 100.50 lakhs) being deposits under lien.

3) Previous years' figures are regrouped / reclassified wherever necessary in order to conform to current years' groupings and classifications.

2.1 The company has only one class of issued shares having par value of Rs. 2/-. Each holder of equity shares is entitled to one vote per share and carries identical right as to dividend. These shares are not subject to any restrictions.

2.2 Details of shareholders holding more than 5% shares.

* These shares are cancelled and new shares have been issued to the shareholders of the respective companies pursuant to the Scheme of Amalgamation (refer note no. 28 )

2.3 Shares reserved for issue under ESOP

In the year 2004, the company has instituted the Employees Stock Option Scheme, under which 2,500,000 equity shares of Rs. 2 each have been reserved. Under the Scheme, the options are granted at an amount equal to ninety five percent of the average daily closing price of the shares of the company's shares quoted on National Stock Exchange of India Ltd. during the period of twelve weeks preceding the date of grant. These options vest in four equal instalments and subject to other provisions of the Scheme, are exercisable within a period of five years from the respective date of vesting.

The activity in the said ESOP Scheme during the last two years was as under:

The above information regarding Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditors.

* The delayed payment has been computed having regard to specified credit period of 45 days under MSME Act. However, there is no delay in terms of agreed credit terms with these suppliers.

Nature of security and terms of repayment

* Vehicle loans are secured by hypothecation of vehicles and same is repayable in sixty equivated monthly instalment inclusive of interest on reducing balance.

# Fixed Deposit amount includes Rs. Nil (previous year Rs. 104.00 lakhs) from certain directors and Rs. Nil (previous year Rs. 579.70 lakhs) from their relatives. Interest accrued but not due includes Rs. Nil (Previous year Rs. 47.36 lakhs) being amount accrued on deposits received from directors and their relatives (Also refer note no. 34).

@ There is no amount due and outstanding to be credited to Investor Education and Protection Fund.

3. The contingent liabilities not provided for / Capital and other commitment

3.1 Letter of Credit opened by banks Rs. 3,035.18 lakhs (Previous year Rs. 1,887.79 lakhs)

3.2 Guarantee issued by the bank on behalf of the company Rs. 1,605.16 lakhs (Previous year Rs. 1,528.04 lakhs)

3.3 Corporate guarantee of Rs. 2,500 lakhs (Previous year Rs. Nil) given by company to a bank in respect of loan taken by a subsidiary company.

3.4 Central Excise and Service Tax Demand / show cause notice of Rs. 554.04 lakhs (Previous year Rs. 308.11 lakhs), against which the company has made pre-deposit of Rs. 2.15 lakhs (Previous year Rs. Nil).

3.5 Income Tax demand of Rs. 20.98 lakhs (Previous year Rs. Nil) being disputed in appeal (against which the company has made pre-deposit of Rs. 20.98 lakhs).

3.6 Sales Tax Demand of Rs. 11.82 lakhs (Previous year Rs. 50.31 lakhs) being disputed in appeal. (Against which the company has made pre-deposit of Rs. 3.55 lakhs (Previous year Rs. 11.25 lakhs) and given a bank guarantee of Rs. 0.74 lakhs (Previous year Rs. 0.74 lakhs )).

3.7 The company had acquired fixed assets under the "Export Promotion Capital Goods Scheme" (EPCG) in the year 2013-14 and 2014-15 that has resulted in the savings of duty of Rs. 394.65 lakhs. As per the terms of the authorization granted under the scheme, the company has undertaken to achieve export commitment of Rs. 2,327.15 lakhs over the export obligation period of 6 years from the date of issuing the license. In the event of company being unable to execute its export obligation by this period, the company shall be liable to pay custom duty for unfulfilled export obligation along with interest after expiry of the export obligation period. Further, during the year, consequent to the debonding of two export oriented unit, company has undertaken to fulfill the export obligation of Rs. 15,240.66 lakhs.

3.8 The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd (UPLL) which was acquired by the company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs. 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs. 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has filed review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The company has filed writ petitions bearing No 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon'ble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the company furnishing security as per the orders.

The company has already furnished the bank guarantee as security. As per the legal advice received by the company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

3.9 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 3,618.56 lakhs (Previous year Rs. 199.83 lakhs).

3.10 Surrender of 0% EPGC licences or Status Holder Incentive Scrip (SHIS) amounting to Rs. 44.50 lakhs with applicable interest and levy of penalty of Rs. 133.49 lakhs ordered by Dy. Director General of Foreign Trade, being disputed in appeal.

4. Scheme of Amalgamation

The Hon'ble High Court of Mumbai, on February 27, 2015 sanctioned the Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956 of six investment companies (the primary assets of which comprise of equity shares in the company) namely, Jyotindra Mody Holdings Private Limited (JMPL), Ansuya Mody Securities Private Limited (AMPL), Dinesh Mody Securities Private Limited (DMPL), Kumud Mody Securities Private Limited (KMPL), Shirish B. Mody Investments Private Limited (SMPL), and Bharati S. Mody Investments Private Limited (BMPL), (collectively herein after referred to as 'Transferor Companies') with the company. The scheme was earlier approved by the shareholders in the court convened meeting held on October 14, 2014 as well as by the public shareholders through postal ballot and e-voting on October 16, 2014. The Company has filed the Court Order with the Registrar of Companies on 13th April, 2015 to make the scheme effective in terms of said order dated February 27, 2015. The Company has given effect for the said scheme in its books of accounts with effect from the appointed date i.e. 1st April, 2014. In accordance with the Scheme and in compliance with AS-14 "Accounting for Amalgamation", the Company has accounted for the Amalgamation based on the "Pooling of Interest" method as under:

(i) All assets and liabilities (including reserves) appearing in the books of accounts of Transferor Companies have been transferred to & vested in and have been recorded by the Company at their respective book values.

(ii) The investments in equity share capital of the Company as it appears in the books of account of the Transferor Companies have been cancelled pursuant to the scheme.

(iii) The excess of net assets value of the Transferor Companies as reduced by the face value of shares issued by the Company, adjusted for cancellation of equity share capital as mentioned above and net of all expenses in relation to the Scheme, amounting to Rs. 204.80 lakh, has been adjusted to surplus in the Profit and Loss Account.

(iv) The Statutory Reserve of Rs. 267.49 lakhs vested with the Company, created by respective transferor Company u/s 45 IC of the RBI Act, will be re-classified to General Reserve on getting approval from RBI.

(v) All inter-company transactions have been eliminated on incorporation of the accounts of Transferor Companies in the books of Company.

(vi) In consideration of the above, the Company has allotted equity shares, credited as fully paid up, to the extent indicated below, to all the members of the Transferor Companies in the following proportion:

(a) 746.6242 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in JMPL.

(b) 723.4882 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in AMPL.

(c) 705.5326 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in DMPL.

(d) 718.1232 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in KMPL.

(e) 637.1318 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in SMPL.

(f) 787.3987 fully paid up equity shares of Rs. 2 each of the Company for every 1 paid up equity share of Rs. 10 each held in BMPL.

Accordingly, 43,342,270 fully paid up equity shares of Rs. 2 each of the Company have been issued to the shareholders of the Transferor Companies, which is equivalent to the shares cancelled, vide (ii) above; these shares, aggregating to Rs. 866.85 lakhs, pending allotment as on year-end have been shown as "Share Capital pending allotment" under Share Capital, thus resulting in no change in the total issued & paid up Share Capital of the Company. The new equity shares issued as above rank pari-passu with the existing equity shares of the Company. As per the scheme of amalgamation, the said shares have been issued & allotted to the shareholders of the transferor companies as per register of members of the transferor companies as on the effective date i.e. 13th April, 2015.

5. Travelling expenses of field personnel include expenses on stationery and printing, conveyance, postage, miscellaneous expenses, etc.

6. Details of Research & Development Expenditure incurred during the year at the following R&D Centers:

7. The amount of Excise Duty disclosed as deduction from turnover is the Excise duty for the year, except the excise duty related to the difference between the closing stockand opening stock and excise duty paid butnotrecovered, which has been disclosed in the (increase)/ decrease in stock and other expenses respectively. (Increase)/ decrease in stocks include excise duty on finished goods lying at plants (net) Rs. 35.11 lakhs (Previous year Rs. 10.86 lakhs).

8. SEGMENT REPORTING:

The company has one segment of activity namely 'Pharmaceuticals'

9. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS - 18, 'Related Party Disclosures' notified by the Companies (Accounting Standard) Rules, 2006 are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories

b. J. B. Healthcare Pvt. Ltd.

c. J. B. Chemicals & Pharmaceuticals Pvt. Ltd. (Upto 13-06-14)

d. LLC Unique Pharmaceutical Laboratories.

e. Unique Pharmaceutical Laboratories FZE

ii Associate Concerns/Trusts/Companies/Joint Venture:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd.

g. J.B.Mody Enterprises LLP

h. Ansuya Mody Enterprises LLP

i. Dinesh Mody Ventures LLP

j. Kumud Mody Ventures LLP

k. Shirish Mody Enterprises LLP

l. Bharati Mody Ventures LLP

m. Synit Drugs Pvt. Ltd.

n. Unique Pharmaceutical Laboratories Ltd.

o. Ifiunik Pharmaceuticals Ltd.

p. Namplas Chemicals Pvt. Ltd.

q. Gemma Jewellery Pvt. Ltd

r. Lekar Pharma Ltd.

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iv) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Kumud D. Mody

c. Mrs. Bharati S. Mody

d. Mrs. Pallavi B. Mehta

e. Mrs. Purvi U. Asher

f. Mrs. Deepali A. Jasani

g. Mrs. Priti R. Shah

h Mr. Nirav S. Mody

i. Mrs. K. V. Gosalia

j. D. B. Mody HUF

k. S. B. Mody HUF

Disclosure in respect of Material Related Party Transactions during the year:

a) Material / Goods sold to Unique Pharmaceutical Laboratories FZE (Dubai) Rs. 5,659.57 lakhs (Previous Year Rs. Nil), OOO Unique Pharmaceutical Laboratories, Moscow Rs. 69.88 lakhs (Previous year Rs. 4,492.58 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. 2,794.39 lakhs (Previous year Rs. 3,271.72 lakhs).

b) Manufacturing charges received from Lekar Pharma Ltd. Rs. 36.69 lakhs (Previous year Rs. 46.19 lakhs).

c) Dividend received from J.B.Healthcare Pvt. Ltd. Rs. 20.49 lakhs (Previous year Rs. 86.72 lakhs).

d) Purchases from Lekar Pharma Ltd. Rs. 3,885.37 lakhs (Previous year Rs. 3605.48 lakhs).

e) Processing charges paid to Namplas Chemicals Pvt. Ltd. Rs. 89.38 lakhs (Previous year Rs. 129.30 lakhs).

f) Bio-equivalence study charges paid to Raptim Research Ltd. Rs. Nil lakhs (Previous year Rs. 3.93 lakhs).

g) Rent paid to Jyotindra Family Trust Rs. 116.40 lakhs (Previous year Rs. 116.40 lakhs), Dinesh Family Trust Rs. 59.07 lakhs (Previous year Rs. 59.07 lakhs), Shirish Family Trust Rs. 70.34 lakhs (Previous year Rs. 70.34 lakhs), D. B. Mody HUF Rs. 36.71 lakhs (Previous year Rs. 36.71 lakhs), S. B. Mody HUF Rs. 36.85 lakhs (Previous year Rs. 36.85 lakhs).

h) Sales Promotion expense paid to OOO Unique Pharmaceutical Laboratories Rs. Nil (Previous year Rs. 2,376.53 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. Nil (Previous year Rs. (11.94) lakhs).

i) Reimbursement of expense to OOO Unique Pharmaceutical Laboratories Rs. 21.55 lakhs (Previous year Rs. 9.34 lakhs) Biotech Laboratories (Pty.) Ltd. (Rs. 0.74) lakhs (Previous Year (Rs. 0.23) lakhs).

j) Royalty paid to Unique Pharmaceutical Laboratories Ltd. Rs. 1,112.85 lakhs (Previous year Rs. 1,103.55 lakhs).

k) Employee benefit expense paid to Shri Jyotindra B. Mody Rs. 40.36 lakhs (Previous year Rs. 43.24 lakhs), Shri Dinesh B. Mody Rs. 40.36 lakhs (Previous year Rs. 43.24 lakhs), Shri Shrish B. Mody Rs. 40.36 lakhs (Previous year Rs. 43.24 lakhs), Shri Pranabh D. Mody Rs. 23.48 lakhs (Previous year Rs. 20.88 lakhs), Shri Nirav Mody Rs. 13.27 lakhs (Previous year Rs. 11.79 lakhs).

l) Remuneration paid to Shri Jyotindra B. Mody Rs. 338.73 lakhs (Previous year Rs. 360.35 lakhs), Shri Dinesh B. Mody Rs. 338.73 lakhs (Previous year Rs. 360.36 lakhs), Shri Shirish B. Mody Rs. 338.73 lakhs (Previous year Rs. 360.36 lakhs), Shri Pranabh D. Mody Rs. 173.93 lakhs (Previous year Rs. 154.25 lakhs), Shri Nirav Mody Rs. 98.29 lakhs (Previous year Rs. 87.36 lakhs).

m) Interest on Deposit paid to Shri Jyotindra B. Mody Rs. 8.96 lakhs (Previous year Rs. 9.32 lakhs), Shri Dinesh Mody Rs. 2.22 lakhs (Previous year Rs. 2.58 lakhs), Ms. Deepali Jasani Rs. 12.70 lakhs (Previous year Rs. 12.40 lakhs), D. B. Mody HUF Rs. 23.15 lakhs (Previous year Rs. 30.60 lakhs), S. B. Mody HUF Rs. 5.70 lakhs (Previous year Rs. 5.25 lakhs), Synit Drugs Pvt. Ltd. Rs. 4.00 lakhs (Previous year Rs. 4.01 lakhs), Ifiunik Pharmaceuticals Ltd. Rs. 6.50 lakhs (Previous year Rs. 6.50 lakhs).

n) Equity Contribution was made to J. B. Healthcare Pvt. Ltd., Jersey Rs. 6.17 (Previous year Rs. 9.39), J.B.Chemicals & Pharmaceuticals Pvt. Ltd., Singapore Rs. Nil (Previous year Rs. 3.55 lakhs), Unique Pharmaceutical Laboratories LLC, Ukraine Rs. 6.08 lakhs (Previous year Rs. 9.36 lakhs), Unique Pharmaceutical Laboratories FZE, Dubai Rs. 59.92 (Previous year Rs. Nil).

o) Re-imbursement of expenses received from J. B. Chemicals & Pharmaceuticals Pvt. Ltd. Singapore Rs. Nil (Previous year Rs. 0.26), Unique Pharmaceutical Laboratories FZE, Dubai Rs. 37.93 (Previous year Rs. Nil).

p) Expenses incurred on behalf of subsidiary company Unique Pharmaceutical Laboratories FZE, Dubai Rs. 1.99 lakhs (Previous year Rs. 36.39 lakhs).

q) Fixed deposit repayment to Shri Jyotindra B. Mody Rs. 82.50 lakhs (Previous year Rs. Nil ), Shri Dinesh Mody Rs. 22.50 lakhs (Previous year Rs. Nil ), Mrs. Kumud Mody Rs. 50.00 lakhs (Previous year Rs. Nil ), Mrs. Bharati Mody Rs. 46.70 lakhs (Previous year Rs. Nil), Ms. Deepali Jasani Rs. 111.00 lakhs (Previous year Rs. Nil), S. B. Mody HUF Rs. 50.00 lakhs (Previous year Rs. Nil).

r) Amount payable to OOO Unique Pharmaceutical

Laboratories Rs. Nil (Previous year Rs. 666.17 lakhs), Synit Drugs Pvt. Ltd. Rs. 40.00 lakhs (Previous year Rs. 40.00 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. 1.81 lakhs (Previous year Rs. 2.00 lakhs), Unique Pharmaceutical Laboratories Ltd. Rs. 72.29 lakhs (Previous year Rs. 164.63 lakhs) Ifiunik Pharmaceuticals Ltd. Rs. 65.00 lakhs (Previous year Rs. 65.00 lakhs), Namplas Chemicals Pvt. Ltd. Rs. 6.59 lakhs (Previous year Rs. 9.71 lakhs), Lekar Pharma Ltd. Rs. 145.61 lakhs (Previous year Rs. 274.61 lakhs), Shri Jyotindra B. Mody Rs. Nil (Previous year Rs. 91.72 lakhs), Shri Dinesh B. Mody Rs. Nil (Previous year Rs. 27.86 lakhs),

Shri Shirish B. Mody Rs. Nil (Previous year Rs. 0.50 lakhs),

Mrs. Kumud D. Mody Rs. Nil (Previous Year Rs. 53.39 lakhs),

Mrs. Bharati S. Mody Rs. Nil (Previous year Rs. 34.00 lakhs),

Mrs. Purvi Asher Rs. Nil (Previous year Rs. 2.09 lakhs), Mrs. Deepali A. Jasani Rs. Nil (Previous year Rs. 132.99 lakhs), Mrs. K.V. Gosalia Rs. Nil (Previous year Rs. 29.10 lakhs), D. B. Mody HUF Rs. Nil (Previous year Rs. 306.00 lakhs), S.B. Mody HUF Rs. Nil (Previous year Rs. 54.91 lakhs).

s) Amount receivable as on 31st March, 15 from OOO Unique Pharmaceutical Laboratories Rs. Nil (Previous year Rs. 4,441.09 lakhs), Unique Pharmaceutical Laboratories FZE Rs. 3,468.60 lakhs (Previous year Rs. 36.39 lakhs), Jyotindra Family Trust Rs. 21.13 lakhs (Previous year Rs. 21.13 lakhs), Dinesh Family Trust 8.49 lakhs (Previous year Rs. 8.49 lakhs), Shirish Family Trust Rs. 8.49 lakhs (Previous year Rs. 8.49 lakhs), Jyotindra Mody Enterprises LLP Rs. 1.34 lakhs (Previous year Rs. 1.34 lakhs),

Dinesh Mody Ventures LLP Rs. 1.34 lakhs (Previous Year Rs. 1.34 lakhs), Shirish B. Mody Enterprises LLP Rs. 1.34 lakhs (Previous year Rs. 1.34 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. 1,469.14 lakhs (Previous year Rs. 678.96 lakhs), D. B. Mody HUF Rs. 12.64 lakhs (Previous year Rs. 12.64 lakhs), S. B. Mody HUF Rs. 12.64 lakhs (Previous year Rs. 12.64 lakhs).

10. Disclosures as required by Accounting Standard 19, "Leases", notified under Section 133 of the Companies Act,2013, are given below:

i. The company has taken certain residential and office premises on operating lease / leave and license agreements having non-cancellable / not non- cancellable (range between 11 months and 3 years) are renewable by mutual consent on mutually agreeable terms.

ii. Lease payment in respect of non cancellable lease amounts to Rs. 44.96 lakhs (Previous year Rs. 72.22 lakhs) is included under the head Compensation Rent in Note "26"

The minimum future lease rentals payable in respect of non cancellable lease are as follows.

11. FINANCIAL AND DERIVATIVE INSTRUMENTS

a) Derivative Instruments:

The company has entered into forward contract to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian rupee. The counter party to such forward contract is a bank. These contracts are entered into to hedge the foreign currency risks. Details of forward contracts outstanding as at the year end:

12. Consequent to the applicability of Schedule II to the Companies Act, 2013 effective from April 1,2014, the company has applied the useful life as per Schedule II. In case of fixed assets where useful life as at April 1,2014 is Nil, the company has adjusted the residual value aggregating to Rs. 347.40 lakhs (Net of deferred tax Rs. 178.88 lakhs) to the retained earnings.

13. CSR EXPENDITURE

Gross amount required to be spent during the year Rs. 209.71 lakhs Amount spent during the year Rs. 210.28 lakhs as detailed hereunder:

14. As required under section 186(4) of the Companies Act, 2013, the particulars of loans and guarantees and investments made during the year and which are outstanding as at the year-end are as follows:

15. Figures of previous year have been re-grouped, re-arranged and recast, wherever considered necessary. Figures of current yea include figures of amalgamating companies and are, therefore, strictly not comparable with those of previous year.

16. Figures in brackets indicate corresponding figures of previous year.

Mar 31, 2014

1. The contingent liabilities not provided for and other commitments:

1.1 Letter of Credit opened by Banks Rs. 1,887.79 lakhs (Previous year Rs. 2,942.63 lakhs).

1.2 Guarantee issued by the Bank on behalf of the company Rs. 1,528.04 lakhs (Previous year Rs. 1,450.54 lakhs).

1.3 Central Excise and Service Tax Demand / show cause notice of Rs. 308.11 lakhs (Previous year Rs. 183.39 lakhs).

1.4 Sales Tax Demand of Rs. 50.06 lakhs (Previous year Rs. 7.95 lakhs) being disputed in appeal (Against which the company has made pre-deposit of Rs. 11.25 lakhs (Previous year Rs. 2.11 lakhs) and given a bank guarantee of Rs. 0.74 lakhs).

1.5 The company had purchased Fixed Assets under the "Export Promotion Capital Goods Scheme" (EPCG) in the year 2012-13 and 2013-14 that has resulted in the savings of duty of Rs. 638.66 lakhs. As per the terms of the authorization granted under the Scheme, the company has undertaken to achieve export commitment of Rs. 1,974.31 lakhs over the export obligation period of 6 years, which expires on 28th November 2019. In the event of company being unable to execute its export obligation by this period, the company shall be liable to pay custom duty for unfulf lled export obligation along with interest after expiry of the export obligation period. Company has already fulf lled export obligation to the extent of 85% in case of Fixed Assets purchased under EPCG scheme during 2012-13 and 5% in case of Fixed Assets purchased under EPCG scheme during 2013-14.

1.6 The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs. 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs. 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has f led review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The company has f led writ petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon''ble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the company furnishing security as per the orders. The company has already furnished the bank guarantee as security. As per the legal advice received by the company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

1.7 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 199.83 lakhs (Previous year Rs. 607.31 lakhs).

1.8 During the year, the company has set up a wholly owned subsidiary company Unique Pharmaceutical Laboratories FZE in Dubai with committed initial capital contribution of AED 365,000 which remain to be remitted as of the year-end.

2. The exceptional item represents the amount which was no longer recoverable by the company out of escrow account set up pursuant to the agreement dated July 14, 2011 with the purchaser of the company ''s Russia Â CIS OTC business undertaking, following commercial settlement of dispute and resulting into reduction in purchase consideration received from the said purchaser.

3. Traveling expenses of f eld personnel include expenses on stationery and printing, conveyance, postage, miscellaneous expenses etc.

4. Details of Research & Development expenditure incurred during the year at the following R&D Centers:

5. The amount of Excise Duty disclosed as deduction from turnover is the Excise duty for the year, except the excise duty related to the dif erence between the closing stock and opening stock and excise duty paid but not recovered, which has been disclosed in the (increase)/decrease in stock and other expenses respectively. (Increase)/decrease in stocks include excise duty on f nished goods lying at plants (net) Rs. (10.86) lakhs (Previous year Rs. 11.70 lakhs).

6. EMPLOYEE BENEFITS:

The disclosures as required as per the revised AS 15 are as under:

a) Def ned Contribution Plan

Contribution to Def ned Contribution Plan, recognized as expense for the year are as under:

Expected employers contribution for the next year is Rs. Nil (Previous year Rs. 100.73 lakhs)

Investment details:

The company made annual contributions to the LIC of an amount advised by the LIC. The company was not informed by LIC of the Investments made or the break-down of plan assets by investment type.

Actuarial Assumptions:

* During the year, the company has opted for Group Gratuity Cash Accumulation (GGCA) scheme of LIC for all its employees for contributing to the fund managed by LIC based on the actuarial valuation of LIC. Based on the actuarial valuation determined by LIC, the company has provided for dif erential liability on account of def ned benef t obligation of Rs. 222.56 lakhs and recognized as part of current service cost.

7. SEGMENT REPORTING

The company has one segment of activity namely ''Pharmaceuticals''.

8. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS Â 18, ''Related Party Disclosures'' notif ed by the Companies (Accounting Standard) Rules, 2006 are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories.

b. J. B. Healthcare Pvt. Ltd.

c. J. B. Chemicals & Pharmaceuticals Pvt. Ltd.

d. LLC Unique Pharmaceuticals Laboratories.

e. Unique Pharmaceutical Laboratories FZE (w.e.f. 10-12-2013)

ii) Associate Concerns / Trusts / Companies/Joint Venture:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd.

g. Jyotindra Mody Holdings Pvt. Ltd. h. Ansuya Mody Securities Pvt. Ltd. i. Dinesh Mody Securities Pvt. Ltd.

j. Kumud Mody Securities Pvt. Ltd.

k. Shirish B. Mody Investments Pvt. Ltd.

l. Bharati S. Mody Investments Pvt. Ltd.

m. J. B. Mody Enterprises Pvt. Ltd. (Upto 24-6-2013)

n. Ansuya Mody Enterprises Pvt. Ltd. (Upto 24-6-2013)

o. Dinesh Mody Ventures Pvt. Ltd. (Upto 24-6-2013)

p. Kumud Mody Ventures Pvt. Ltd. (Upto 24-6-2013)

q. Shirish Mody Enterprises Pvt. Ltd. (Upto 24-6-2013)

r. Bharati Mody Ventures Pvt. Ltd. (Upto 24-6-2013)

s. J. B. Mody Enterprises LLP (from 25-6-2013)

t. Ansuya Mody Enterprises LLP (from 25-6-2013)

u. Dinesh Mody Ventures LLP (from 25-6-2013)

v. Kumud Mody Ventures LLP (from 25-6-2013)

w. Shirish Mody Enterprises LLP (from 25-6-2013)

x. Bharati Mody Ventures LLP (from 25-6-2013)

y. Synit Drugs Pvt. Ltd.

z. Unique Pharmaceutical Laboratories Ltd.

aa. If unik Pharmaceuticals Ltd.

ab. Namplas Chemicals Pvt. Ltd.

ac. Raptim Research Ltd. (Upto 16-6-2013)

ad. Gemma Jewellery Pvt. Ltd.

ae. Lekar Pharma Ltd.

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iv) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Kumud D. Mody

c. Mrs. Bharati S. Mody

d. Mrs. Pallavi B. Mehta

e. Mrs. Purvi U. Asher

f. Mrs. Deepali A. Jasani

g. Mrs. Priti R. Shah h Mr. Nirav S. Mody i. Mrs. K. V. Gosalia j. D. B. Mody HUF k. S. B. Mody HUF

Disclosure in respect of Material Related Party Transactions during the year:

1. Material / Goods sold to OOO Unique Pharmaceutical Laboratories, Moscow, Rs. 4,492.58 lakhs (Previous year Rs. 3,648.99 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. 3,271.72 lakhs (Previous year Rs. 1,882.14 lakhs).

2. Manufacturing charges received from Lekar Pharma Ltd. Rs. 46.19 lakhs (Previous year Rs. 22.92 lakhs).

3. Dividend received from J.B. Healthcare Pvt. Ltd. Rs. 86.72 lakhs (Previous year Rs. 159.48 lakhs).

4. Purchases from Lekar Pharma Ltd. Rs. 3,605.48 lakhs (Previous year Rs. 3,507.87 lakhs).

5. Processing charges paid to Namplas Chemicals Pvt. Ltd. Rs. 129.30 lakhs (Previous year Rs. 150.36 lakhs).

6. Bio-equivalent study charges paid to Raptim Research Ltd. Rs. 3.93 lakhs (Previous year Rs. 60.63 lakhs).

7. Rent paid to Jyotindra Family Trust Rs. 116.40 lakhs (Previous year Rs. 116.40 lakhs), Dinesh Family Trust Rs. 59.07 lakhs (Previous year Rs.. 59.07 lakhs), Shirish Family Trust Rs. 70.34 lakhs (Previous year Rs. 70.34 lakhs), D. B. Mody HUF Rs. 36.71 lakhs (Previous year Rs. 36.71 lakhs), S. B. Mody HUF Rs. 36.85 lakhs (Previous year Rs. 36.85 lakhs).

8. Sales Promotion expense paid to OOO Unique Pharmaceutical Laboratories Rs. 2,376.53 lakhs (Previous year Rs. 1,457.90 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. (11.94) lakhs (Previous year Rs. Nil).

9. Reimbursement of Expense to OOO Unique Pharmaceutical Laboratories Rs. 9.34 lakhs (Previous year Rs. Nil), Biotech Laboratories (Pty.) Ltd. Rs. (0.23) lakhs (Previous year Rs. 15.41 lakhs).

10. Royalty paid to Unique Pharmaceutical Laboratories Ltd. Rs. 1103.55 lakhs (Previous year Rs. 14.16 lakhs).

11. Employee benef t expense paid to Shri Jyotindra B. Mody Rs. 43.24 lakhs (Previous year Rs. 38.61 lakhs), Shri Dinesh B. Mody Rs. 43.24 lakhs (Previous year Rs. 38.61 lakhs), Shri Shirish B. M ody Rs. 43.24 lakhs (Previous year Rs. 38.61 lakhs), Shri Pranabh D. Mody Rs. 20.88 lakhs (Previous year Rs. 14.39 lakhs), Shri Nirav Mody Rs. 11.79 lakhs (Previous year Rs. 10.48 lakhs).

12. Remuneration paid to Shri Jyotindra B. Mody Rs. 360.35 lakhs (Previous year Rs. 321.75 lakhs), Shri Dinesh B. Mody Rs. 360.36 lakhs (Previous year Rs. 321.75 lakhs), Shri Shirish B. Mody Rs. 360.36 lakhs (Previous year Rs. 321.75 lakhs), Shri Pranabh D. Mody Rs. 154.25 lakhs (Previous year Rs. 106.72 lakhs), Shri Nirav Mody Rs. 87.36 lakhs (Previous year Rs. 77.55 lakhs).

13. Interest on deposit paid to Shri Jyotindra B. Mody Rs. 9.32 lakhs (Previous year Rs. 8.77 lakhs), Ms. Deepali Jasani Rs. 12.40 lakhs (Previous year Rs. 11.48 lakhs), D. B. Mody HUF Rs. 30.60 lakhs (Previous year Rs. 30.60 lakhs), Jyotindra Mody Holdings Pvt. Ltd. Rs. Nil (Previous year Rs. 18.88 lakhs), Bharati S. Mody Investments Pvt. Ltd. Rs. Nil (Previous year Rs. 27.26 lakhs).

14. Equity Contribution was made to J.B. Healthcare Pvt. Ltd., Jersey Rs. 9.39 lakhs (Previous year Rs. Nil), J. B. Chemicals & Pharmaceuticals Pvt. Ltd., Singapore Rs. 3.55 lakhs (Previous year Rs. 2.78 lakhs), Unique Pharmaceuticals Laboratories LLC, Ukraine Rs. 9.36 lakhs (Previous year Rs. 16.52 lakhs).

15. Loan repayment from J.B. Chemicals & Pharmaceuticals Pvt. Ltd. Rs. 0.26 lakhs (Previous year Rs. Nil).

16. Expenses incurred on behalf of subsidiary company Unique Pharmaceutical Laboratories FZE Rs. 36.39 lakhs (Previous year Rs. Nil).

17. Amount payable as on 31st March, 2014 to Synit Drugs Pvt. Ltd. Rs. 40.00 lakhs (Previous year Rs. 40.00 lakhs), Biotech Laboratories (Pty.) Ltd. Rs. 2.00 lakhs (Previous year Rs. Nil), OOO Unique Pharmaceutical Laboratories Rs. 666.17 lakhs (Previous year Rs. Nil), Unique Pharmaceutical Laboratories Ltd. Rs.164.63 lakhs (Previous year Rs. Nil), If unik Pharmaceuticals Ltd. Rs. 65.00 lakhs (Previous year Rs. 65.00 lakhs), Namplas Chemicals Pvt. Ltd. Rs. 9.71 lakhs (Previous year Rs. 15.97 lakhs), Raptim Research Ltd. Rs. Nil (Previous year Rs. 2.43 lakhs), Lekar Pharma Ltd. Rs. 274.61 lakhs (Previous year Rs. 487.27 lakhs), Shri Jyotindra B. Mody Rs. 91.72 lakhs (Previous year Rs. 103.09 lakhs), Shri Dinesh B. Mody Rs. 27.86 lakhs (Previous year Rs. 25.29 lakhs), Shri Shirish Mody Rs. 0.50 lakhs (Previous year Rs.0.50 lakhs), Shri Pranabh D. Mody Rs. Nil (Previous year Rs. 98.48 lakhs), Mrs. Kumud D. Mody Rs. 53.39 lakhs (Previous year Rs. 61.77 lakhs), Mrs. Bharati S. Mody Rs. 34.00 lakhs (Previous year Rs. 37.28 lakhs), Mrs. Purvi Asher Rs. 2.09 lakhs (Previous year Rs. 2.44 lakhs), Mrs. Deepali A. Jasani Rs. 132.99 lakhs (Previous year Rs. 116.10 lakhs), Mrs. K. V. Gosalia Rs. 29.10 lakhs (Previous year Rs. 29.10 lakhs), D. B. Mody HUF Rs. 306.00 lakhs (Previous year Rs. 306.00 lakhs), S.B. Mody HUF Rs. 54.91 lakhs (Previous year Rs. 66.90 lakhs).

18. Amount receivable as on 31st March, 2014 from OOO Unique Pharmaceutical Laboratories Rs. 4,441.09 lakhs (Previous year Rs. 2,118.20 lakhs), Unique Pharmaceutical Laboratories FZE Rs. 36.39 lakhs (Previous year Rs. Nil), J.B. Chemicals & Pharmaceuticals Pvt. Ltd., Singapore Rs. Nil (Previous year Rs. 11.51 lakhs), Jyotindra Family Trust Rs. 21.13 lakhs (Previous year Rs. 21.13 lakhs), Dinesh Family Trust Rs. 8.49 lakhs (Previous year Rs. 8.49 lakhs), Shirish Family Trust Rs. 8.49 lakhs (Previous year Rs. 8.49 lakhs), Jyotindra Mody Holdings Pvt. Ltd. Rs. Nil (Previous year Rs. 1.34 lakhs), Dinesh Mody Securities Pvt. Ltd. Rs. Nil (Previous year Rs. 1.34 lakhs), Shirish B. Mody Investments Pvt. Ltd.Rs. Nil (Previous year Rs. 1.34 lakhs), Jyotindra Mody Enterprise LLP Rs. 1.34 lakhs (Previous year Rs. Nil), Dinesh Mody Ventures LLP Rs. 1.34 lakhs (Previous year Rs. Nil), Shirish Mody Enterprises LLP Rs. 1.34 lakhs (Previous year Rs. Nil), Biotech Laboratories (Pty.) Ltd. Rs. 1,331.30 lakhs (Previous year Rs. 598.93 lakhs), Lekar Pharma Ltd. Rs. Nil (Previous year Rs. 103.58 lakhs), D. B. Mody HUF Rs. 12.64 lakhs (Previous year Rs. 12.64 lakhs), S. B. Mody HUF Rs. 12.64 lakhs (Previous year Rs. 12.64 lakhs).

19. Disclosures as required by Accounting Standard 19,"Leases", notif ed under sub-section (3C) of Section 211 of the Companies Act,1956, are given below:

i. The company has taken certain residential and of ce premises on operating lease/leave and license agreements having non-cancellable/ not non- cancellable (range between 11 months and 3 years are renewable by mutual consent on mutually agreeable terms).

ii. Lease payment in respect of non-cancellable lease amounts to Rs. 72.22 lakhs (Previous year Rs. 38.41 lakhs) is included under the head Compensation Rent in Note "26".

The minimum future lease rentals payable in respect of non-cancellable lease are as follows:

20. FINANCIAL AND DERIVATIVE INSTRUMENTS

a) Derivative Instruments:

The company has entered into forward contract to of set foreign currency risks arising from the amounts denominated in currencies other than the Indian rupee. The counter party to such forward contract is a bank. These contracts are entered into to hedge the foreign currency risks. Details of forward contracts outstanding as at the year end:

21. Ministry of Corporate Af airs, Govt. of India, vide General Circular No. 2 and 3 dated 08-02-2011 and 21-02-2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulf llment of conditions stipulated in the circular. The company has satisf ed the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Mar 31, 2013

1. The contingent liabilities not provided for:

1.1 Letter of Credit opened by banks Rs. 2,942.63 lakhs (Previous year Rs. 845.70 lakhs).

1.2 Guarantee issued by the bank on behalf of the company Rs. 1,450.54 lakhs (Previous year Rs. 1,426.82 lakhs).

1.3 Central Excise Demand / show cause notice of Rs. 183.39 lakhs (Previous year Rs. 485.39 lakhs).

1.4 Sales Tax Demand of Rs. 7.95 lakhs (Previous year Rs. 22.13 lakhs) being disputed in appeal. (Against which the company has made pre-deposit of Rs. 2.11 lakhs).

1.5 Corporate guarantee provided for the benefit of the subsidiary company Rs. Nil (Previous year Rs. 2,388.47 lakhs).

1.6 The company had purchased fixed assets under the "Export Promotion Capital Goods Scheme" (EPCG) in year 2011-2012 that has resulted in saving of duty of Rs. 349.92 lakhs. As per the terms of the license granted under the scheme, the company has undertaken to achieve export commitment of Rs. 2,099 lakhs over the export obligation period of 6 years, which expires on 2nd November, 2017.

In the event of company being unable to execute its export obligations by this period, the company shall be liable to pay custom duty for unfulfilled export obligation along with interest after expiry of the export obligation period. In fact, the company has already fulfilled export obligation to the extent of 45% in percentage terms within the first year itself.

1.7 The company has received from Cilag GmbH International ("Cilag") a notice of claims under business Sale and Purchase Agreement dated May 23, 2011 and Supply Agreement dated May 23, 2011 for estimated amount of US$ 33.30 million (which appears to coincide with the amount held in the escrow account) and US$ 5 million respectively. The company has contested these claims. The parties are in discussion to resolve the differences. The amount in this regard is not fairly ascertainable.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 607.31 lakhs (Previous year Rs. 435.37 lakhs)

3. Travelling expenses of field personnel include expenses on stationery and printing, conveyance, postage, miscellaneous expenses, etc.

4. Adjustment relating to previous year amounted to Rs. Nil (Net Debit) {Previous year Rs. 10.10 lakhs (Net Debit)}. The same has been debited/credited under respective heads of accounts.

5. The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs. 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs. 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has filed review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The company has filed writ petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon''ble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the company furnishing security as per the Orders. The company has already furnished the bank guarantee as security. As per the legal advice received by the company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

4. The amount of excise duty disclosed as deduction from turnover is the excise duty for the year, except the excise duty related to the difference between the closing stock and opening stock and excise duty paid but not recovered, which has been disclosed in the (increase )/decrease in stock and other expenses respectively. (Increase)/decrease in stocks include excise duty on finished goods (net) Rs. 11.70 lakhs (Previous year Rs. 8.18 lakhs).

5. EMPLOYEE BENEFITS:

The disclosures as required as per the revised AS 15 are as under:

a) Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expense for the year are as under:

Expected employers contribution for the next year is Rs. 100.73 lakhs (Previous year Rs. 85.18 lakhs).

Investment details:

The company made annual contributions to the LIC of an amount advised by the LIC. The company was not informed by LIC of the investments made or the break-down of plan assets by investment type.

6. SEGMENT REPORTING:

The company has one segment of activity namely ''Pharmaceuticals''

7. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS - 18, ''Related Party Disclosures'' notified by the Companies (Accounting Standard) Rules, 2006 are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories.

b. J. B. Healthcare Pvt. Ltd.

c. J. B. Chemicals & Pharmaceuticals Pvt. Ltd.

d. LLC Unique Pharmaceutical Laboratories.

ii) Associate Concerns / Trusts / Companies / Joint Venture:

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd.

g. Jyotindra Mody Holdings Pvt. Ltd.

h. Ansuya Mody Securities Pvt. Ltd.

i. Dinesh Mody Securities Pvt. Ltd.

j. Kumud Mody Securities Pvt. Ltd.

k. Shirish B. Mody Investments Pvt. Ltd.

l. Bharati S. Mody Investments Pvt. Ltd.

m. J. B. Mody Enterprises Pvt. Ltd.

n. Ansuya Mody Enterprises Pvt. Ltd.

o. Dinesh Mody Ventures Pvt. Ltd.

p. Kumud Mody Ventures Pvt. Ltd.

q. Shirish Mody Enterprises Pvt. Ltd.

r. Bharati Mody Ventures Pvt. Ltd.

s. Synit Drugs Pvt. Ltd.

t. Unique Pharmaceutical Laboratories Ltd.

u. Ifiunik Pharmaceuticals Ltd.

v. Namplas Chemicals Pvt. Ltd.

w. Raptim Research Ltd.

x. Gemma Jewellery Pvt. Ltd.

y. Lekar Pharma Ltd.

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iv) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Kumud D. Mody

c. Mrs. Bharati S. Mody

d. Mrs. Pallavi B. Mehta

e. Mrs. Purvi U. Asher

f. Mrs. Priti R. Shah

g. Mr. Nirav S. Mody

h. Mrs. K. V. Gosalia

i. D. B. Mody HUF

j. S. B. Mody HUF

8. Disclosures as required by Accounting Standard 19, "Leases", notified under sub-section (3C) of Section 211 of the Companies Act,1956, are given below:

i. The company has taken certain residential and office premises on operating lease / leave and license agreements having non cancellable/ not non-cancellable (range between 11 months and 3 years are renewable by mutual consent on mutually agreeable terms).

ii. Lease payment in respect of non cancellable lease amounts to Rs. 38.41 lakhs (Previous year Rs. 79.31 lakhs) is included under the head Compensation Rent in Note "26"

9. FINANCIAL AND DERIVATIVE INSTRUMENTS

a) Derivative Instruments:

The company has entered into forward contract to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian rupee. The counter party to such forward contract is a bank. These contracts are entered into to hedge the foreign currency risks. Details of forward contracts outstanding as at the year end:

10. Ministry of Corporate Affairs, Govt. of India, vide General Circular No. 2 and 3 dated 08-02-2011 and 21-02-2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

11. Figures of previous year have been re-grouped, re-arranged and recast, wherever considered necessary.

12. Figures in brackets indicate corresponding figures of Previous year.

Mar 31, 2012

1.1 Shares reserved for issue under ESOP

In the year 2004, the company has instituted the Employees Stock Option Scheme, under which 25,00,000 equity shares of Rs 2 each have been reserved. Under the Scheme, the options are granted at an amount equal to ninety five percent of the average daily closing price of the company's shares quoted on National Stock Exchange of India Ltd. during the period of twelve weeks preceding the date of grant.These options vest in four equal instalments and subject to other provisions of the Scheme, are exercisable within a period of five years from the respective date of vesting.

TERMS OF REPAYMENT

2. 1 Vehicle loans are secured by hypothecation of vehicles and same is repayable in sixty equivated monthly instalment inclusive of interest on reducing balance.

2.2 Repayable in yearly instalment of Rs 16.33 lakhs.

# Working capital borrowings from the banks are secured by first charge on pari passu basis by way of hypothecation of company's current assets both present and future and by way of joint equitable mortgage of company's immovable properties situated at Thane and Belapur in the state of Maharashtra, Ankleshwar & Panoli (except for movable fixed assets located at plot no. 4, GIDC Phase IV, Panoli, Gujarat) in the state of Gujarat and Daman in the Union Territory of Daman.

3. The contingent liabilities not provided for:

3.1 Letter of Credit opened by banks Rs 845.70 lakhs (Previous year Rs 728.52 lakhs).

3.2 Guarantees issued by the banks on behalf of the company Rs 1,426.82 lakhs (Previous year Rs 1,192.61 lakhs).

3.3 Central Excise Demand/show cause notice of Rs 485.39 lakhs (Previous year Rs 349.79 lakhs).

3.4 Sales Tax Demand of Rs 22.13 lakhs (Previous year Rs 635.95 lakhs) being disputed in appeal.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs 435.37 lakhs (Previous year Rs 1221.51 lakhs).

5. Travelling expenses of field personnel include expenses on stationery and printing, conveyance, postage, miscellaneous expenses etc.

6. Adjustment relating to Previous year amounted to Rs 10.10 lakhs (Net debit) {Previous year Rs 1.96 lakhs (Net debit)}. The same has been debited/credited under respective heads of accounts.

7. The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the company on a going concern basis, has received demand notices from Dept. of Chemicals & Fertilizers, Govt. of India, New Delhi demanding a sum of Rs 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has filed review petition against each of these claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The company has filed writ petitions bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Hon'ble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the company furnishing security as per the orders. The company has already furnished the bank guarantee as security. As per the legal advice received by the company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

8. During the year, the company sold its Russia-CIS OTC Business Undertaking and three brands viz. Doktor Mom, Rinza and Fitovit on worldwide basis, to Cilag GmbH International, Switzerland, a wholly owned subsidiary of Johnson & Johnson, pursuant to the agreements dated May 23, 2011. The said transaction was closed on July 14, 2011.The profit on sale of Russia-CIS OTC Business Undertaking (including the said three brands) has been arrived at after reducing the net worth of and expenses pertaining to the said Russia-CIS OTC business undertaking and the expenses relating to the said transaction from the consideration received.

A new in-house R&D Centre has been set up at 101/2 & 102/1, Daman Industrial Estate, Air Port Road, Village Kadaiya, Nani Daman (U.T.) on 1st October 2011 and necessary applications have been filed with the Department of Scientific and Industrial Research Technology Bhavan, New Mehrauli Road, New Delhi for recognition of this in-house R&D Unit.

9. The amount of excise duty disclosed as deduction from turnover is the excise duty for the year, except the excise duty related to the difference between the closing stock and opening stock and excise duty paid but not recovered, which has been disclosed in the (increase)/decrease in stock and other expenses respectively. (Increase)/decrease in stocks include excise duty on finished goods (net) Rs 8.18 lakhs (Previous year Rs 4.23 lakhs).

10. EMPLOYEE BENEFITS

The disclosures as required as per the revised AS 15 are as under:

11. SEGMENT REPORTING:

The company has one segment of activity namely "Pharmaceuticals".

12. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS - 18, "Related Party Disclosures" notified by the Companies (Accounting Standard) Rules, 2006 are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. OOO Unique Pharmaceutical Laboratories.

b. J.B. Healthcare Pvt. Ltd.

c. Unique Pharmaceuticals Laboratories S.R.L. (Wound up on 14-09-2011).

d. J. B. Chemicals & Pharmaceuticals Pvt. Ltd.

e. LLC Unique Pharmaceutical Laboratories (w.e.f. 12-12-2011).

ii) Associate Concerns/Trusts/Companies/Joint Venture

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty.) Ltd.

g. J B SEZ Private Ltd.

h. Jyotindra Mody Holdings Pvt. Ltd.

i. Ansuya Mody Securities Pvt. Ltd.

j. Dinesh Mody Securities Pvt.Ltd.

k. Kumud Mody Securities Pvt. Ltd.

l. Shirish B. Mody Investments Pvt. Ltd.

m. Bharati S. Mody Investments Pvt. Ltd.

n. Synit Drugs Pvt. Ltd.

o. Unique Pharmaceutical Laboratories Ltd.

p. Ifiunik Pharmaceuticals Ltd.

q. Namplas Chemicals Pvt. Ltd.

r. Raptim Research Ltd.

s. Gemma Jewellery Pvt. Ltd.

t. Lekar Pharma Ltd.

u. J. B. Life Science Overseas Ltd.

(ceased to be an associated w.e.f. 30-3-2012).

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iv) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Ansuya J. Mody

c. Mrs. Kumud D. Mody

d. Mrs. Bharati S. Mody

e. Mrs. Pallavi B. Mehta

f. Mrs. Purvi U. Asher

g. Mrs. Priti R. Shah

h. Mrs. Deepali A. Jasani

i. Mr. Nirav S. Mody

j. Mrs. K. V. Gosalia

k. Mrs. N. R. Mehta

l. D. B. Mody HUF

m. S. B. Mody HUF

Disclosure in respect of Material Related Party Transactions during the year:

1.Material/Goods sold to OOO Unique Pharmaceutical Laboratories, Moscow, Rs 4,261.80 lakhs (Previous year Rs 1,470.88 lakhs), Biotech Laboratories (Pty.) Ltd. Rs 1,161.76 lakhs (Previous year Rs 1,090.91 lakhs), Lekar Pharma Ltd. Rs 395.53 lakhs (Previous year Rs 445.79 lakhs).

2. Manufacturing charges received from Lekar Pharma Ltd. Rs 10.30 lakhs (Previous year Rs 11.98 lakhs).

3. Purchases from Lekar Pharma Ltd. Rs 3366.38 lakhs (Previous year Rs 3,003.93 lakhs).

4. Processing charges paid to Namplas Chemicals Pvt. Ltd. Rs 155.06 lakhs (Previous year Rs 125.22 lakhs).

5. Bio-equivalent study charges paid to Raptim Research Ltd. Rs 16.55 lakhs (Previous year Rs 98.17 lakhs).

6. Rent paid to Jyotindra Family Trust Rs 114.45 lakhs (Previous year Rs 95.53 lakhs), Dinesh Family Trust Rs 58.14 lakhs (Previous year Rs 48.80 lakhs), Shrish Family Trust Rs 69.20 lakhs, Previous year Rs 57.97 lakhs), D. B. Mody HUF Rs 36.06 lakhs (Previous year Rs 29.92 lakhs), S. B. Mody HUF Rs 36.21 lakhs (Previous year Rs 30.05 lakhs).

7. Royalty paid to Unique Pharmaceutical Laboratories Ltd. Rs 12.66 lakhs (Previous year Rs 613.25 lakhs).

8. Remuneration paid to Shri Jyotindra B. Mody Rs 126.70 lakhs (Previous year Rs 414.64 lakhs), Shri Dinesh B. Mody Rs 126.45 lakhs (Previous year Rs 414.64 lakhs), Shri Shirish B. Mody Rs 126.60 lakhs (Previous year Rs 414.64 lakhs), Shri Pranabh D. Mody Rs 120.74 lakhs (Previous year Rs 120.74 lakhs) and Shri Nirav S. Mody Rs 78.46 lakhs (Previous year Rs 65.13 lakhs).

9. Interest on deposit paid to Jyotindra Mody Holdings Pvt. Ltd. Rs 23.92 lakhs (Previous year Rs 22.15 lakhs), Ansuya Mody Securities Pvt. Ltd. Rs 24.20 lakhs (Previous year Rs 28.54 lakhs), Bharati S. Mody Investments Pvt. Ltd. Rs 41.50 lakhs (Previous year Rs 49.15 lakhs), Unique Pharmaceutical Laboratories Ltd. Rs 17.32 lakhs (Previous year Rs 20.50 lakhs), Ifiunik Pharmaceuticals Ltd. Rs 21.35 lakhs (Previous year Rs 39.50 lakhs), Shri Jyotindra B. Mody Rs 6.00 lakhs (Previous year Rs 4.50 lakhs), Shri Dinesh B. Mody Rs 2.68 lakhs (Previous year Rs 2.57 lakhs), Shri Shrish B. Mody Rs 2.22 lakhs (Previous year Rs 2.57 lakhs), Shri Pranabh D. Mody Rs 18.55 lakhs (Previous year Rs 59.00 lakhs), Mrs. Deepali A. Jasani Rs 13.73 lakhs (Previous year Rs 21.31 lakhs), D. B. Mody HUF Rs 44.40 lakhs (Previous year Rs 29.96 lakhs).

10. Equity Contribution was made to J. B. Healthcare Pvt. Ltd., Jersey Rs 6.35 lakhs (Previous year Rs 11.35 lakhs), J. B. Chemicals & Pharmaceuticals Pvt. Ltd., Singapore Rs 3.83 lakhs (Previous year Rs 0.46 lakhs), LLC Unique Pharmaceutical Laboratories, Ukraine Rs 2.49 lakhs (Previous year Rs Nil).

11. Refund of Equity contribution was received from Unique Pharmaceuticals Laboratories S.R.L., Romania Rs 72.90 lakhs (Previous year Rs Nil).

12. Loan was given to J. B. Chemicals & Pharmaceuticals Pvt. Ltd. Singapore Rs 0.25 lakhs (Previous year Rs 11.25 lakhs).

13. Amount payable as on March 31, 2012 to Jyotindra Mody Holdings Pvt. Ltd. Rs 230.00 lakhs (Previous year Rs 230.00 lakhs), Ansuya Mody Securities Pvt. Ltd. Rs 205.00 lakhs (Previous year Rs 275.00 lakhs), Bharati S. Mody Investments Pvt. Ltd. Rs 332.00 lakhs (Previous year Rs 487.00 lakhs), Unique Pharmaceutical Laboratories Ltd. Rs 150.00 lakhs (Previous year Rs 497.10 lakhs), Shri Jyotindra B. Mody Rs 58.20 lakhs (Previous year Rs 204.79 lakhs), Shri. Dinesh B. Mody Rs 22.96 lakhs (Previous year Rs 172.86 lakhs), Shri Pranabh D. Mody Rs 170.44 lakhs (Previous year Rs 221.24 lakhs), Mrs. Deepali A. Jasani Rs 104.62 lakhs (Previous year Rs 223.74 lakhs), Shri Nirav S. Mody Rs 90.25 lakhs (Previous year Rs 123.37 lakhs) and D. B. Mody HUF Rs 306.00 lakhs (Previous year Rs 306.00 lakhs).

14. Amount receivable as on March 31, 2012 from OOO Unique Pharmaceutical Laboratories Rs 1140.93 lakhs (Previous year Rs 17,233.75 lakhs), Biotech Laboratories (Pty.) Ltd., Rs 563.69 lakhs (Previous year Rs 518.90 lakhs), D. B. Mody HUF Rs 12.64 lakhs (Previous year Rs 12.64 lakhs), S. B. Mody HUF Rs 12.64 lakhs (Previous year Rs 12.64 lakhs).

13. The company has taken on operating lease certain assets. The total lease rent paid on the same amounting to Rs 513.32 lakhs (Previous year Rs 569.43 lakhs) is included under the head compensation rent and rates and taxes. The minimum future lease rentals payable in respect thereof are as follows:

14. Ministry of Corporate Affairs, Govt. of India, vide General Circular No. 2 and 3 dated 08-02-2011 and 21-02-2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

15. These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year's figures have been recast/re-stated to conform to the classification of the current year.

16. Figures in brackets indicate corresponding figures of Previous year.

Mar 31, 2010

1.1 In the opinion of the Board, current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provisions for all the known liabilities and depreciation are adequate and not in excess of the amount reasonably necessary.

1.2 The contingent liabilities not provided for:

1.2.1 Letter of Credit opened by banks Rs. 1213.67 lakhs (Previous year Rs. 749.41 lakhs).

1.2.2 Guarantee issued by the Bank on behalf of the company Rs. 1339.10 lakhs (Previous yearRs. 1264.60 lakhs).

1.2.3 Guarantee given to a bank for loan availed of by a wholly owned subsidiary company Rs. Nil (Previous year Rs. 1521.60 lakhs).

1.2.4 Central Excise Demand of Rs. 55.30 lakhs (Previous year Rs. 61.37 lakhs).

1.2.5 Income Tax Demand of Rs. Nil (Previous year Rs. 23.74 lakhs).

2.2.6 Sales Tax Demand of Rs. 6.99 lakhs (Previous year Rs. 6.99 lakhs) being disputed in appeal (against which the company has made pre-deposit of Rs. 1.51 lakhs and has also furnished bank guarantees worth Rs. 5.23 lakhs).

2.1 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 261.36 lakhs (Previous yearRs. 63.54 lakhs).

The above information regarding Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditors.

2.2 Travelling expenses of field personnel include expenses on stationery and printing, conveyance, postage, miscellaneous expenses etc.

2.3 Adjustment relating to previous year amounted to Rs. 54.06 lakhs (Net Credit) (Previous yearRs. 1.32 lakhs Net Credit). The same has been debited/credited under respective heads of accounts.

2.4 The Pharmaceutical Division of Unique Pharmaceutical Laboratories Ltd. (UPLL) which was acquired by the company on a going concern basis, has received demand notices fromDept. of Chemicals & Fertilizers, Govt, of India, New Delhi demanding a sum of Rs. 461.47 lakhs in respect of the bulk drug Metronidazole and a further sum of Rs. 591.05 lakhs in respect of the bulk drug Oxyphenbutazone. These amounts were claimed on hypothetical basis in 1996, under para 7(2) of DPCO 79 read with para 14 of DPCO 87 and para 12 of DPCO 95, long after repeal of DPCO 79 and DPCO 87 and gains allegedly notionally made by it by procuring the bulk drugs at alleged lower cost. UPLL has filed review petition against each ofthese claims disputing the jurisdiction, power and legal or rational basis for making such demands, particularly in view of the repeal of DPCO 79 and DPCO 87. The company has filed writ petition bearing No. 446 of 2008 in respect of demand for Oxyphenbutazone & writ petition No. 2623 of 2007 in respect of demand for Metronidazole in Bombay High Court. These writ petitions have been admitted and the Honble High Court has restrained the Government from adopting coercive steps to recover the amount till the disposal of the writ petition on the company furnishing security as per the orders. The company has already furnished the bank guarantee as security. As per the legal advice received by the company, there is no liability and accordingly no provision is being made in the accounts for these claims and demands.

2.5 The company has not exercised the option available under notification No. G.S.R 225(E) dated March 31, 2009 issued by the Government of India optionally providing for a modification in the accounting of certain foreign currency items pursuant to AS-11 prescribed under Section 211(3C) of the Companies Act, 1956. Accordingly, the treatment in that respect continues to be in the conformity with AS-11.

2.6 The amount of excise duty disclosed as deduction from turnover is the Excise duty for the year, except the excise duty related to the difference between the closing stock and opening stock and excise duty paid but not recovered, which has been disclosed in the (increase)/ decrease in stock and other expenses respectively. (Increase)/ decrease in stocks include excise duty on finished goods (net) Rs. 2.45 lakhs (Previous year Rs. 0.97 lakhs).

2.7 Employees Benefits:

The disclosures as required as per the revised AS 15 are as under:

2.8 SEGMENT REPORTING:

The company has one segment of activity namely Pharmaceuticals.

2.9 (i) Loans to employees includes an amount of Rs. 4.92 lakhs (Previous year Rs. 9.96 lakhs) due from a director on account of a housing loan. The maximum amount due during the year Rs. 9.96 lakhs (Previous year Rs. 15.00 lakhs).

(ii) Deposits given by the company include Rs. Nil (Previous year Rs. 16.17 lakhs) given to the directors as security deposit under the leave and license agreement.

(iii) Deposits given by the company include Rs. 4.02 lakhs (Previous year Rs. 4.02 lakhs) being security deposit of Rs. 1.34 lakhs each given to Jyotindra Mody Holdings Pvt. Ltd., Dinesh Mody Securities Pvt. Ltd. and Shirish B. Mody Investments Pvt. Ltd.

(iv) The interest on fixed loans include Rs. 2.33 lakhs (Previous year Rs. 0.49 lakhs) credited to account of Managing Director on fixed deposit placed by him.

2.10 RELATED PARTY DIS CLOSURE

Related party disclosure as required by AS - 18, Related Party Disclosures notified by the Companies (Accounting Standard) Rules, 2006 are given below:

Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. J. B. Life Science Overseas Limited b. OOO Unique Pharmaceutical Laboratories c. J. B. Healthcare Pvt. Ltd. d. Unique Pharmaceutical Laboratories S.R.L.

ii) Associate Concerns / Trusts / Companies/ Joint Venture

a. Mody Trading Company b. Mody Brothers c. Jyotindra Family Trust d. Dinesh Family Trust e. Shirish Family Trust f. Biotech Laboratories (Pty.) Ltd. g. J B SEZ Pvt. Ltd. h. Jyotindra Mody Holdings Pvt. Ltd. i. Ansuya Mody Securities Pvt. Ltd. j. Dinesh Mody Securities Pvt. Ltd. k. Shirish B. Mody Investments Pvt. Ltd. l. Bharati S. Mody Investments Pvt. Ltd. m. Synit Drugs Pvt. Ltd. n. Unique Pharmaceutical Laboratories Ltd. o. Ifiunik Pharmaceuticals Ltd. p. Namplas Chemicals Pvt. Ltd. q. Raptim Research Ltd. r. Lekar Pharma Ltd.

iii) Key Management Personnel:

a. Shri Jyotindra B. Mody b. Shri Dinesh B. Mody c. Shri. Shirish B. Mody

iv) Relatives of Key Management Personnel:

a. Mr. Pranabh D. Mody b. Mrs. Ansuya J. Mody c. Mrs. Kumud D. Mody d. Mrs. Bharati S. Mody e. Mrs. Pallavi B. Mehta f. Mrs. Purvi U. Asher g. Mrs. Priti R. Shah h. Mrs. Deepali A. Jasani i. Mr. Nirav S. Mody j. Mrs. K. V. Gosalia k. Mrs. N. R. Mehta l. D. B.Mody-HUF m. S. B.Mody-HUF

2.11 Figures of previous year have been re-grouped, re-arranged and recast, wherever considered necessary.

2.12 Figures in brackets indicate corresponding figures of the previous year.

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