l) Provisions and contingencies
Provisions

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

Provision for sales return and date expiry

The Company as per trade practice accepts returns
from market which are primarily in the nature of
expired or near expiry products. Provisions for

such returns are estimated on the basis of historical
experience, market conditions and specific
contractual terms and are provided for.

Contingencies

A contingent liability is :

• a possible obligation that arises from past
events and whose existence will be confirmed
only by the occurrence or non-occurrence
of one or more uncertain future events not
wholly within the control of the Company; or

• a present obligation that arises from past
events but is not recognised because :

- it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation;
or

- the amount of the obligation cannot be
measured with sufficient reliability.

m) Revenue

Revenue from contracts with customers

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those goods
or services. The Company has concluded that it
is the principal in all of its revenue arrangements
since it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also
exposed to inventory risks.

Goods and Services Tax (GST) is not received by
the Company on its own account. Rather, it is tax
collected on value added to the commodity by the
seller on behalf of the government. Accordingly, it
is excluded from revenue.

Sale of products

Revenue from sale of products is recognised at the
point in time when control of the asset is transferred
to the customer, generally on delivery of the
products. Invoices are payable within contractually
agreed credit period.

The Company considers whether there are
other promises in the contract that are separate
performance obligations to which a portion of
the transaction price needs to be allocated. In

determining the transaction price for the sale of
products, the Company considers the effects of
variable consideration (if any).

Revenue from sale of products is stated exclusive of
Goods and Services Tax (GST). Revenues are net of
sales returns, discounts, provision for anticipated
returns on expiry, made on the basis of management
expectations.

Sales returns

The Company accounts for sales returns accrual
by recording an allowance for sales returns
concurrent with the recognition of revenue at the
time of a product sale. This allowance is based on
the Company’s estimate of expected sales returns.
With respect to established products, the Company
considers its historical experience of sales returns,
levels of inventory in the distribution channel,
estimated shelf life, product discontinuances,
price changes of competitive products, and the
introduction of competitive new products, to the
extent each of these factors impact the Company’s
business and markets. With respect to new products
introduced by the Company, such products have
historically been either extensions of an existing
line of product where the Company has historical
experience or in therapeutic categories where
established products exist.

Rendering of services

Service income is recognised as per the terms of the
contracts/arrangements when related services are
performed and is stated net of GST.

Contract balances :

Trade receivables

A receivable represents the Company’s right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due).

Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs it’s obiligation
by transferring goods or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised for
the earned consideration that is conditional.

Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an amount
of consideration is due) from the customer. If a
customer pays consideration before the Company
transfers goods or services to the customer, a
contract liability is recognised when the payment is
received from customer or due, whichever is earlier.
Contract liabilities are recognised as revenue when
the Company performs under the contract.

n) Interest income

Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to that asset’s net carrying amount
on initial recognition. Interest income is included
in ‘Other Income’ in the Statement of Profit and
Loss.

o) Employee benefits
Short-term employment benefits :

All employee benefits payable within twelve months
of service such as salaries, wages, bonus, ex-gratia,
medical benefits, sick leave, casual leave etc. are
recognised in the year in which the employees
render the related service and are presented as
current employee benefit obligation within the
Balance Sheet. Termination benefits are recognised
as an expense as and when incurred.

Short-term leave benefit is provided at undiscounted
amount during the accounting period based on the
service rendered by employees.

Defined contribution plan :

Contributions to defined contribution schemes such
as State governed Provident Fund and Employee
Pension Scheme, Employees’ State Insurance
Scheme, Superannuation, Employees’ Deposit
Linked Insurance and Group Life Insurance are
charged as an expense based on the amount of
contribution required to be made as and when

services are rendered by the employees. The above
benefits are classified as defined contribution
schemes and the Company has no further defined
obligations beyond the contributions.

If the contribution payable to the scheme for
service received before the Balance Sheet date
exceeds the contribution already paid, the deficit
payable to the scheme is recognised as a liability
after deducting the contribution already paid. If the
contribution already paid exceeds the contribution
due for services received before the Balance Sheet
date, then excess is recognised as an asset to the
extent that the pre-payment will lead to a reduction
in future payment or a cash refund.

Defined benefit plan :

The Company has defined benefit plan in the
form of Gratuity, Long Service Benefits and Post
Retirement Medical Benefits as per policies of the
Company. The liability in respect of defined benefit
plans is calculated using the projected unit credit
method with actuarial valuations being carried
out at the end of each annual reporting period.
The Company’s net obligation in respect of the
defined benefit plan is calculated by estimating the
amount of future benefit that employee has earned
in exchange of their service in the current and
prior periods and discounted back to the current
valuation date to arrive at the present value of the
defined benefit obligation. The present value of
the defined benefit obligation is deducted from the
fair value of plan assets, to arrive at the net asset/
(liability), which need to be accounted for in the
books of accounts of the Company.

The discount rate used to arrive at the present
value of the defined benefit obligations is based on
the Indian government security yields prevailing as
at the Balance Sheet date that have maturity date
equivalent to the tenure of the obligation.

The current service cost of the defined benefit
plan, recognised in the Statement of Profit and
Loss as employee benefits expense, reflects the
increase in the defined benefit obligation resulting
from employee service in the current year, benefit
changes, curtailments and settlements. Past service
costs are recognised in statement of profit and loss
in the period of a plan amendment. The net interest

cost is calculated by applying the discount rate to
the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included
in employee benefit expense in Statement of Profit
and Loss. Actuarial gains and losses arising from
experience adjustments and changes in actuarial
assumptions are charged or credited to OCI in
the period in which they arise and is reflected
immediately in retained earnings and is not
reclassified to Statement of Profit and Loss.

When the benefits of the plan are changed or when
a plan is curtailed or settlement occurs, the portion
of the changed benefit related to past service
by employees or the gain or loss on curtailment
or settlement, is recognised immediately in
the Statement of Profit and Loss when the plan
amendment or when a curtailment or settlement
occurs.

Other employee benefits :

Other employee benefits comprise of leave
encashment which is provided for, based on the
actuarial valuation carried out as at the end of the
year.

Liabilities recognised in respect of other employee
benefits are measured at the present value of the
estimated future cash outflows expected to be made
by the Company in respect of services provided by
employees up to the reporting date.

p) Income Tax

Current income tax

Income Tax expense comprises of current and
deferred tax and includes any adjustments related
to past periods in current and/or deferred tax
adjustments that may become necessary due
to certain developments or reviews during the
relevant period. The provision for current tax is
made at the rate of tax as applicable for the income
of the previous year as defined under the Income
tax Act, 1961.

Current income tax relating to items recognised,
either in other comprehensive income or directly in
equity, is also recognised in other comprehensive
income or in equity, as appropriate and not in
the Statement of Profit and Loss. Management
periodically evaluates positions taken in

the tax returns with respect to situations in
which applicable tax regulations are subject to
interpretation and establishes provisions where
appropriate.

Current tax assets and current tax liabilities are
offset when there is a legally enforceable right
to set off the recognised amounts and there is an
intention to settle the asset and the liability on a net
basis.

Deferred tax

Deferred tax is recognised using the Balance Sheet
approach on temporary differences at the reporting
date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purposes at the reporting date.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting
date and are recognised to the extent that it has
become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is expected
to be settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the
reporting date.

Deferred tax relating to items recognised, either
in other comprehensive income or in equity, is also
recognised in other comprehensive income or in
equity, as appropriate and not in the Statement of
Profit and Loss.

Deferred tax assets and deferred tax liabilities are
offset, if a legally enforceable right exists to set-off
current tax assets against current tax liabilities.

q) Earnings per equity share

The Company presents basic and diluted earnings
per share (‘EPS’) data for its equity shares.

The Basic EPS is computed by dividing the net profit
after tax for the year attributable to the equity
shareholders of the Company by weighted average
number of equity shares outstanding during the

Diluted earnings per equity share are computed
by dividing the net profit attributable to equity
holders of the Company by the weighted average
number of equity shares considered for deriving
basic earnings per equity share and also the
weighted average number of equity shares that
could have been issued upon conversion of all
dilutive potential equity shares. The dilutive
potential equity shares are adjusted for the
proceeds receivable had the equity shares been
actually issued at fair value (i.e. the average
market value of the equity shares). Dilutive
potential equity shares are deemed converted as
of the beginning of the period unless issued at a
later date.

r) Share based compensation

Abbott Laboratories, USA, being the Ultimate
Holding Company, has given restricted stock option
plan to the employees of the Company.

Pursuant to Ind AS 102 ‘Share-based Payment’,
the Company recognises an expense based on the
fair value of the stock options as at grant date.
The expenses are amortised over the vesting
period. The corresponding credit is given to
equity because the award represents in substance
equity contribution by the Parent Company. The
cumulative expense recognised for stock options
at each reporting date until the vesting date
reflects the extent to which the vesting period
has expired and the Company’s best estimate
of the number of equity instruments that will
ultimately vest.

The stock based compensation cost is recharged
to the Company upon exercise, which is adjusted
against share based compensation reserve.

2.4 Recent accounting pronouncements

The Ministry of Corporate Affairs notified new
standards or amendment to existing standards under
Companies (Indian Accounting Standards) Rules
as issued from time to time. During the year ended
March 31, 2025, MCA has not notified any new
standards or amendments to the existing standards
which is applicable to the Company.

Nature and purpose of components of other equity :

1. Amalgamation Reserve

This was created on amalgamation of Beem Healthcare Limited and Valencia Pharmaceuticals Limited, wholly owned
subsidiary of the Company with appointed date as July 1, 1998. All assets and liabilities of erstwhile Beem Healthcare
Limited and Valencia Pharmaceuticals Limited were transferred to the Company and all shares held by the Company
in erstwhile Beem Healthcare Limited and Valencia Pharmaceuticals Limited were cancelled. The amalgamation was
accounted under ‘Pooling of Interests method’ as prescribed in then Accounting Standard 14 issued by the Institute of
Chartered Accountants of India. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

2. Capital Reserve

This was created on amalgamation of Lenbrook Pharmaceuticals Limited, a wholly owned subsidiary of the Company with
the appointed date as October 1, 2003. All the assets and liabilities of erstwhile Lenbrook Pharmaceuticals Limited were
transferred to the Company and all shares held by the Company in the erstwhile Lenbrook Pharmaceuticals Limited were
cancelled. The amalgamation was accounted under the ‘Purchase Method’ as prescribed in then applicable Accounting
Standards 14 issued by the Institute of Chartered Accountants of India. The reserve can be utilised in accordance with the
provisions of the Companies Act, 2013.

3. Capital Redemption Reserve

This was created according to Section 77A of the Companies Act, 1956 by transferring the face value of shares bought back
during the period 2003 to 2008 from free reserves. The reserve can be utilised in accordance with the provisions of the
Companies Act, 2013.

4. Share based Compensation Reserve

The Company’s employees are awarded Restricted Stock Units (RSUs) of the Ultimate Holding Company, Abbott
Laboratories, USA. The Share based Compensation Reserve is used to recognise the fair value of the RSUs awarded to
the employees and reserves are used for payments towards RSU charge to the Ultimate Holding Company. The award
represents in substance equity contributions by the Ultimate Holding Company.

5. General Reserve

General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. General
Reserve is created by a transfer from one component of equity to another and is not an item of Other Comprehensive
Income.The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

6. Retained Earnings

Retained Earnings are the profits the Company has earned till date, less any transfer to General Reserve, dividends or other
distributions paid to the shareholders. The reserve can be utilised in accordance with the provisions of the Companies
Act, 2013.

7. Other Comprehensive Income (Remeasurement of defined benefit plan)

Differences between the interest income on plan assets and the return actually achieved and any changes in the liabilities
over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in
‘Other Comprehensive Income’ and subsequently not reclassified to the Statement of Profit and Loss.

34 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s financial statements in conformity with Ind AS requires management to make
judgements, 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 estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances existing when the financial statements were
prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates
is recognised in the year in which the estimates are revised and in any future year affected.

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

Provision for sales return and date expiry

The Company as per trade practice accepts returns from market which are primarily in the nature of expired or near
expiry products. Provisions for such returns are estimated on the basis of historical experience, shelf life of the product
and market conditions and are provided for accordingly. Also refer Note 23.

Uncertainty over income tax treatment

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other
uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments (Refer Note 37).

Determining the lease term of contracts

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its Incremental Borrowing
Rate (IBR) to measure lease liabilities. IBR is the rate of interest that the Company would have to pay to borrow over a
similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset
in a similar economic environment. The Company estimates the IBR using observable inputs i.e. bank borrowing interest
rates on secured assets.

Useful lives of Property, plant and equipment

The Company reviews the useful life of Property, plant and equipment at the end of each reporting period. This
reassessment may result in change in depreciation expense in future periods. Refer Note 2.3 (d) for management estimate
of useful lives.

Defined benefit plans

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

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management
considers the interest rates of government bonds in currencies consistent with the currencies of the post employment
benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval
in response to demographic changes. Future salary increase and gratuity increase are based on expected future inflation
rates in the country.

Further details about gratuity and other post employment medical benefits obligations are given in Note 35.

Share based compensation to employees

The fair value of restricted stock units plan is measured at the date of grant using the Black Scholes option pricing model.
The estimate also requires determination of the most appropriate inputs to the valuation model, including the volatility,
dividend yield, risk free interest rates, expected life of share option etc., which are disclosed in the Note 36.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based
on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for
these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement
is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit
risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial
instruments. Also refer Note 40.

Provision for inventories

Provision is made in the financial statements for slow and non-moving items based on estimates regarding their usability.
Further for finished goods and stock-in-trade, all inventories expiring within six months and not expected to be sold, have
been fully provided for. Also refer Note 8.

Impairment of trade receivables

For the purpose of measuring lifetime expected credit loss allowance of trade receivables, the Company has used a
practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision
matrix which takes into account historical credit loss experience and adjusted for forward-looking information. Refer
Note 9.

Impairment of other financial assets

The loss allowance for other financial assets are based on assumptions about risk of default. The Company uses judgments
in making these assumptions based on its past history, existing market conditions and certainty of realisation. Also refer
Note 6 and 12.

(c) Defined Benefit Plans

i. Gratuity : (Included as part of contribution to provident and other funds in Note 28 - Employee benefits expense)

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, or Company’s Scheme whichever is
more beneficial. Benefits would be paid at the time of the separation based on employees’ salary and tenure of
employment with the Company.

ii. Post Retirement Medical Benefits (PRMB) : (Included as part of staff welfare expenses in Note 28 - Employee
benefits expense)

Under this scheme, select group of senior employees and their spouse are covered for hospitalisation benefits
after the employee has retired from the Company. The cover is available to these beneficiaries until they are
alive. The Company has procured a group hospitalisation cover from an insurance company for providing these
benefits to these beneficiaries.

iii. Long Service Benefits (LSB) : (Included as part of salaries and wages in Note 28 - Employee benefits expense)

Under this scheme, long service benefits accrues to the employee, while in service and is payable upon completion
of stipulated service with the Company.

Expected contribution to the defined benefit plan (Gratuity) for the next annual reporting period is ' 7.00 Crores
(March 31, 2024 : ' 4.50 Crores).

The average duration of the defined benefit plan obligation at the end of the reporting period for Gratuity is 8.55 years
(March 31, 2024 : 8.68 years) and for PRMB is 6.08 years (March 31, 2024 : 6.18 years).

Notes :

(i) The actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out as at
March 31, 2025. The present value of the defined benefit obligation and the related current service cost and past service
cost, were measured using the Projected Unit Credit Method.

(ii) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the
estimated term of the obligations.

(iii) The salary escalation rate is arrived after taking into consideration the seniority, the promotion and other relevant factors,
such as, demand and supply in employment market.

36 SHARE BASED COMPENSATION TO EMPLOYEES

a) International Stock Ownership Plan (Stocks of Abbott Laboratories, USA, being Ultimate Holding
Company)

Abbott Laboratories, USA has an ‘Affiliate Employee Stock Purchase Plan’ (employee share purchase plan) whereby
specified employees of its subsidiaries have been given a right to purchase shares of Abbott Laboratories, USA. Every
employee who opts for the scheme contributes, by way of payroll deductions, up to 10% of his cash remuneration (i.e.
basic salary for officers and basic salary and dearness allowance for staff category) towards purchase of shares on a
monthly basis over the purchase cycle of six months.

The maximum that an employee can contribute to the plan is USD 12,500 per purchase cycle or USD 25,000 per
calendar year. At the end of the cycle, accumulated payroll deductions are used to purchase shares at a discounted
price. The purchase price of the share is 85% of the lesser of fair market value either on the first or last day of the
purchase cycle. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA and are
purchased on behalf of the employees at market price less discount, allocated to participants as of last day of the
purchase cycle. The concession in the price of the shares is entirely borne by Abbott Laboratories, USA.

During the year ended March 31, 2025, 18,617 shares (March 31, 2024 : 19,831 shares) were purchased by employees
at weighted average fair value of US $ 91.71 (March 31, 2024 : US $ 94.29 ) per share.

b) Employees Restricted Stock Options Plan (Stocks of Abbott Laboratories, USA, being Ultimate
Holding Company)

Abbott Laboratories, USA as part of the ‘Long Term Incentive Program’ has offered Restricted Stock Units (RSUs)
to specified employees of its subsidiaries, whereby the employees covered by the plan are granted units. The units
when vested, become shares of Abbott Laboratories, USA at a NIL Cost. The shares of Abbott Laboratories, USA are
listed with the New York Stock Exchange, USA. The grants issued are vested in one third instalments over a three
year period. Pursuant to Ind AS 102 ‘Share-based Payment’, the fair value of the RSUs have been recorded by the
Company. The fair value of the RSUs is estimated at the grant date using Black Scholes Option Pricing Model, taking
into account the terms and conditions upon which such RSUs were granted.

b. Contingent liabilities :

Claims against Company not acknowledged as debts

(i) In February 1996, the Government had made a tentative claim for a sum of ' 11.12 Crores to be paid into the
Drugs Prices Equalisation Account (DPEA) on account of unintended benefit allegedly enjoyed by the Company
during the period May 1, 1981 to August 25, 1987. This was contested by the Company and subsequently
during the year ended November 30, 2005, a final demand was received for ' 3.47 Crores (including interest of
' 1.90 Crores upto March 31, 2004). The Company, being aggrieved of the said demand and based on legal advice
obtained in this regard, contested the above final demand of ' 3.47 Crores and filed a writ petition before the
Bombay High Court to restrain the government from recovering the said amount. The Bombay High Court
has admitted the writ petition and granted stay of the recovery of the amount subject to the
Company furnishing a bank guarantee in respect of the principal amount of ' 1.56 Crores. The said bank
guarantee has been furnished. The Company however, out of abundant caution and based on its understanding
of the facts and circumstances of the case provided for a sum of ' 1.39 Crores (March 31, 2024 : ' 1.35 Crores)
including interest liability till date.

38 SEGMENT REPORTING

The Managing Director of the Company takes decision in respect of allocation of resources and assesses the performance
basis information provided by functional heads and are thus considered to be Chief Operating Decision Maker.

The Company operates under the principal business segment viz. “Pharmaceuticals”. The Chief Operating Decision
Maker (CODM) views and monitors the operating results of its single business segment for the purpose of making
decisions about resource allocation and performance assessment. Also, sales of company is substantially in domestic
market. Accordingly, there are no separate reportable segments in accordance with the requirements of Ind AS 108
‘Operating segment’ and hence, there are no additional disclosures to be provided other than those already provided in
the financial statements. There are no individual customer contributing more than 10% of Company’s total revenue.

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

Fair value of cash and bank balances, trade and other financial current assets, trade payables, other financial current
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, 2025.

During the reporting period ending March 31, 2025 and March 31, 2024, there were no transfers between Level 1 and
Level 2 fair value measurements.

The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique :

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

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are based on
unobservable market data

The fair values of the foreign exchange forward contract has been determined using valuation techniques with
adequate observable inputs. This model incorporate various inputs including the credit quality of counter parties
and foreign exchange forward rates.

Description of significant unobservable inputs to valuation (Level 3) :

The following table shows the valuation techniques and inputs used for financial instruments that are not carried at
fair value :

41 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The
Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly
related to their business operations. The Company’s principal financial liabilities comprise of trade and other payables.

The Company’s senior management’s focus is to foresee the unpredictability and minimize potential adverse effects on
the Company’s financial performance. The Company’s overall risk management procedures to minimise the potential
adverse effects of financial market on the Company’s performance are as follows :

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risks namely interest rate risk, currency risk and
other price risk, such as commodity risk. The Company is not exposed to other price risk whereas the exposure to
currency risk and interest risk is given below :

(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’s exposure to the risk of changes in market interest
rates relates primarily to the Company’s deposit accounts with banks.

Interest Rate sensitivity

The Company’s investments are primarily in fixed rate interest bearing investments. Hence, the Company is not
significantly exposed to 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 because of
changes in foreign exchange rates and arises where transactions are done in foreign currency. It arises mainly
where receivables and payables exist due to transactions entered in foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and follows
established risk management policies including use of derivatives like foreign exchange forward contracts to
hedge foreign currency risk. The Company does not enter into financial instrument transactions for trading or
speculative purposes. Unhedged exposure at any point of time during the year is not material.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in foreign exchange rates,
being the most transacted currencies with all other variables held constant. The exchange rate between Rupee
and other foreign currencies have changed substantially in the recent years and may fluctuate substantially in
the future. The below impact on the Company’s profit before tax and equity is based on changes in the fair value
of unhedged foreign currency monetary assets and liabilities as at balance sheet date.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Concentration of credit risk arises when counter parties are engaged in similar
business activities or have similar economic features that would cause the ability to meet contractual obligations to
be similarly affected by changes in economical, political or other conditions. Concentration of credit risk indicate the
relative sensitivity of the Company’s performance to developments affecting a particular industry.

Credit risk of company arises principally from the trade debts, loans and advances, trade deposits, other receivables
and balance with banks. The carrying amount of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk was ' 4,544.62 Crores as at March 31, 2025 (March 31, 2024 : ' 4,204.67 Crores).
Credit risk on cash and bank balances is limited as these are generally held or invested in deposits with banks with good
credit ratings. Customer credit risk is managed for each business unit subject to the Company’s established policy,
procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based
on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.
Further, significant sales of the Company are against advance payment/collection on delivery terms. Outstanding
customer receivables are regularly monitored and any shipments to new overseas customers are generally covered
by letters of credit or other forms of credit insurance. The management continuously monitors the credit exposure
towards the customers and makes provision against those balances considered doubtful of recovery.

42 CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to
safeguard the Company’s ability to remain as a going concern and maximise the shareholder 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 plans. In order to maintain or adjust the capital structure,
the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The current capital structure of the Company is equity based with no financing through borrowings except through
leasing. The Company is not subject to any externally imposed capital requirements.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2025
and March 31, 2024.

44 The Company appears in the breach list displayed on the website of the Depositories and BSE limited as the total foreign
investment in the Company exceeded the sectoral cap in the past. In this connection, the Company has received post-
facto approval from the Department of Pharmaceuticals permitting foreign shareholding in excess of the sectoral cap, up
to 80% of the paid-up share capital of the Company, subject to compounding with the Reserve Bank of India (RBI). The
Company had filed a compounding application with the Reserve Bank of India in this regard. However, the RBI vide its
letter dated March 19, 2024, had informed the Company that the compounding application required further examination
in consultation with the Government, and since compounding was a time-bound process, the application was returned
for the time being along with the compounding fee. Subsequently, as per direction received from RBI vide its email dated
December 19, 2024, Company has refiled the compounding application with the RBI on January 22, 2025, and awaits
further communication/ advice from RBI in this regard. The Company does not expect the impact on financial statements
to be material.

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

Company for holding any Benami property.

ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

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

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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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

vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous
year.

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

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

46 (i) The Company has maintained proper books of account as prescribed under Section 128(1) of the Companies Act,

2013 (as amended). The books of accounts are maintained in electronic mode as required under Section 128 (1) of the
Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 (as amended). The back-up of books of account
and other relevant books and papers maintained in electronic mode were taken on a server physically located in India
on daily basis except for an application used for processing expenses of field employees where backups on a daily
basis were taken on a server physically located outside India.

(ii) The Ministry of Corporate Affairs (MCA) has prescribed a requirement for companies under the proviso to Rule 3(1)
of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring
companies, which uses accounting software for maintaining its books of account, shall use only such accounting
software which has a feature of recording audit trail of each and every transaction, creating an edit log of each
change made in the books of account along with the date when such changes were made and ensuring that the audit
trail cannot be disabled.

The Company has used accounting software for maintaining its books of account which has a feature of audit trail
(edit log) facility and the same was enabled at the application level. During the year ended March 31, 2025 the
Company has not enabled the feature of recording audit trail (edit log) at the database level for the said accounting
software to log any direct data changes.

47 Previous year’s figures have been regrouped/reclassified to confirm to the current year’s classification. The impact of such
reclassification /regrouping is not material in the financial statement.

As per our report of even date attached For and on behalf of the Board of Directors

For WALKER CHANDIOK & CO LLP SWATI DALAL SUDARSHAN JAIN

Chartered Accountants Managing Director Director

ICAI Firm Registration No. 001076N/N500013 DIN : 01513751 DIN : 00927487

ASHISH GUPTA MAITHILEE MISTRY SANGEETA SHETTY

Partner Chief Financial Officer Company Secretary

Membership No. 504662 Membership No. ACS 18865

Place : Mumbai Place : Colombo

Date : May 15, 2025 Date : May 15, 2025