NOTE 10 - EQUITY AND RESERVES

a) Ordinary shares

The Company presently has only one class of ordinary shares. For all matters submitted to vote in the shareholders meeting, every holder of ordinary shares, as reflected in the records of the Company on the date of the shareholders’ meeting, has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Company.

The Company has an authorised share capital of 200,000,000 equity shares of ' 2 each (31 March 2022 - 200,000,000 of ' 2 each).

b) Preference shares

The Company has an authorised share capital of 600,000 Cumulative Convertible Preference Shares of ' 100 each (31 March 2022 - 600,000).

c) Reserves

Securities premium reserve - The amount received by the Company over and above the face value of shares issued is shown under this head.

Retained Earnings - Accumulated earnings include all current and prior years profits as disclosed in the statement of profit and loss.

Stock compensation reserve - Stock compensation reserve consists of employee compensation cost allocated over the vesting period of options granted to employees. Such cost is recognised in statement of profit and loss and is credited to the reserve. Upon exercise of options, such reserves are reclassified to equity share capital and security premium.

d) Dividends

The company declares and pays dividends in Indian rupees. Dividends are taxable in the hands of the shareholders and tax is deducted by the Company at applicable rates.

Pursuant to the approval of the Board on 16 March, 2023, the Company paid an interim dividend of INR 21/- per equity share of face value of INR 2/- each on March 29, 2023. The interim dividend of INR 21 per equity share, declared by the Board on 16 March 2023 shall be the final dividend for the financial year 2022-23.

(c) Right, Preference and restriction on shares

The Company presently has only one class of ordinary equity shares. For all matters submitted to vote in the shareholders meeting, every holder of ordinary equity shares, as reflected in the records of the Company on the date of the shareholders’ meeting, has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Company.

(d) Sub-division of shares and Issue of bonus shares

i) As per recommendation of Board of directors dated 23 February 2021 and approval of Shareholders dated 8 March 2021, the Company has increased its authorised share capital to ' 460 million consisting of 40,000,000 equity shares of face value of ' 10 each and 600,000 Cumulative Convertible Preference Shares of ' 100 each.

ii) Further, as per the recommendation of the Board of Directors dated 10 March 2021 and approval of the shareholders dated 26 March 2021, the existing equity shares are sub-divided into 200,000,000 equity shares of face value of ' 2 each. Pursuant to this resolution the existing issued, paid up and subscribed share capital of the Company stands subdivided to 9,800,450 equity shares of ' 2 each.

iii) As per recommendation of the Board of Directors dated 10 March 2021 and approval of the shareholders dated 26 March 2021, the Company at its board meeting held on 6 April 2021 has allotted 98,004,500 bonus equity shares of face value of ' 2 each in ratio of 10:1 (i.e. 10 Bonus Shares for every 1 Equity Share). Consequently, the issued, subscribed and paid-up share capital has increased to ' 215.61 million comprising of 107,804,950 equity shares of face value of ' 2 each.

These shares are retrospectively considered for the computation of basic and diluted EPS.

(f) Employees Stock options Schemes 2021 i) Scheme details

The Board, at its meeting held on 6 April 2021 had approved the Glenmark Life Sciences Limited - Employee Stock Option Scheme, 2021 (ESOS). Further, the Shareholders’ of the Company also approved the ESOS at the Extra-Ordinary General Meeting held on 9 April 2021.

9,51,734 ESOP options have been granted to the eligible employees/Directors at Nomination and Remuneration Committee meeting held on May 17, 2021. During the Financial Year 2022-2023, 67,039 (2021-22- 6,983) options were cancelled and no options were issued or exercised under Employees Stock Options Scheme viz. ESOS’ 2021. As of 31 March 2023 877,712 (31 March 2022, 944,751) options were outstanding and are due for exercise.

On exercising the options so granted under the ESOS of the Company, the paid-up equity share capital of the Company will increase by a like number of shares. Employee stock compensation charged during the year is ' 31.85 (31 March 2022, ' 34.98) (Refer Note 20)

(g) Initial Public Offering (IPO)

The Company has completed the IPO of 21,022,222 equity shares comprising a fresh issue of 14,722,222 equity shares and offer for sale of 6,300,000 equity shares of face value of ? 2 each at premium of ? 718 per share aggregating to ? 15,136 million. Pursuant to the IPO, the equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited with effect from August 06, 2021.

Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on request made by the Company. There are no overdue principal amounts/ interest payable amounts for delayed payments to such vendors at the Balance sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year, except stated above.

NOTE 23 - EMPLOYEE POST- RETIREMENT BENEFITS

The following are the employee benefit plans applicable to the employees of the Company. a) Gratuity (defined benefit plan)

In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment of amounts that are based on salary and tenure of employment. Liabilities with regard to the gratuity plan are determined by actuarial valuation.

Plan is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member’s length of service and salary at the time of retirement/termination age.

c) Provident fund and others (defined contribution plan)

Apart from being covered under the gratuity plan described earlier, employees participate in a provident fund plan; a defined contribution plan. The Company makes annual contributions based on a specified percentage of salary of each covered employee to a government recognised provident fund. The Company does not have any further obligation to the provident fund plan beyond making such contributions. Upon retirement or separation an employee becomes entitled for this lump sum benefit, which is paid directly to the concerned employee by the fund. During the year ended 31 March 2023, the Company contributed approximately ' 72.09 (31 March 2022 - ' 64.84) towards the provident fund plan.

NOTE 27 - SEGMENT REPORTING

Business segment:

The Chief Operating Decision Maker (“CODM”) reviews the financial performance, has been identified as the Managing Director (MD) of the company. The company has identified only one segment i.e. API as reporting segment based on the information reviewed by CODM.

Geographical information:

Geographical segment disclosure given below are based on location of the company’s customers in case of revenue. The disclosure of carrying amount of segment assets are based on geographical location of segment assets.

*This pertains to Liability of excise duty on domestic clearance of Amiodarone pending with CESTAT Mumbai under The Central Excise Act, 1944

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2023 aggregate ' 106.13 (31 March 2022'482.00).

During the years mentioned above, there has been no transfers amongst the fair value hierarchy.

The fair value of all the Financial instrument measured at amortised cost are based on discounted cash flow using a discount rate. They has been classified at level 2 in fair value hierarchy due to the use of valuation techniques which measured the use of observable market data.

Trade receivables comprise amounts receivable from the sale of goods and services.

The management considers that the carrying amount of trade and other receivables approximates their fair value.

Bank balances and cash comprise cash and short-term deposits held by the Company. The carrying amount of these assets approximates their fair value.

Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The management considers that the carrying amount of trade payables approximates to their fair value.

Fair value hierarchy :

Level 1 : Category includes financial assets and liabilities, that are measured in whole or in significant part by reference to published quotes in an active market.

Level 2 : Category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions. These include assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes and assets that are valued using the Company’s own valuation models whereby the material assumptions are market observable.

Level 3 : Category includes financial assets and liabilities measured using valuation techniques based on non market observable inputs. This means that fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. However, the fair value measurement objective remains the same, that is, to estimate an exit price from the perspective of the Company. The main asset classes in this category are unlisted equity investments as well as unlisted funds.

Valuation Technique used to determine Fair Value :

The fair value of all the Financial instrument measured at amortised cost are based on discounted cash flow using a discount rate determined considering the borrowing rate charged by the bank.

NOTE 30: LEASES

Company as lessee

The Company has applied short term and low value exemption for leases and accordingly are excluded from Ind AS 116. The leases includes non cancellable periods and renewable option at the discretion of lessee which has been taken into consideration for determination of lease term.

NOTE 31 - RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company is exposed to a variety of financial risks which results from the Company’s operating and investing activities. The Company focuses on actively securing its short to medium term cash flows by minimising the exposure to financial markets.

The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options.

Financial assets that potentially subject the Company to concentrations of credit risk consist principally of cash equivalents, accounts receivables, other receivables, investment securities and deposits. By their nature, all such financial instruments involve risk including the credit risk of non-performance by counter parties.

The Company’s cash equivalents and deposits are held in reputed banks, which management belives are of high credit quality and hence no impairment allowances has been recognized.

The Company’s trade and other receivables are actively monitored to review credit worthiness of the customers to whom credit terms are granted and also avoid significant concentrations of credit risks.

Foreign Currency sensitivity

The foreign currency sensitivity analysis has been performed in relation to US Dollar (USD), Euro (EUR), GBP and Russian Ruble (RUB).

Considering the volatility in direction of strengthening dollar upto 10%, the sensitivity analysis has been disclosed at 10% movements on strengthening and weakening effect for presenting comparable movement due to currency fluctuations.

The Company’s cash equivalents and deposits are held in reputed banks, which management belives are of high credit quality and hence no impairment allowances has been recognized

Trade receivables are usually due within 60-180 days. Generally and by practice most customers enjoy a credit period of approximately 180 days and are not interest bearing, which is the normal industry practice. All trade receivables are subject to credit risk exposure. However, the Company does not identify specific concentrations of credit risk with regard to trade and other receivables, as the amounts recognised represent a large number of receivables from various customers.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. However, As there were no bad debts in past years and there is no material receivables outstanding for more than 6 months, company does not have any expected credit loss assesment.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. The Company’s policy is to deal only with creditworthy counterparties.

The Company’s management considers that all the above financial assets that are not impaired for each of the reporting dates and are of good credit quality, including those that are past due. None of the Company’s financial assets are secured by collateral or other credit enhancements.

In respect of trade and other receivables, the Company’s credit risk exposure towards any single counterparty or any group of counterparties having similar characteristics is considered to be negligible. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

Liquidity risk analysis

The Company manages its liquidity needs by carefully monitoring cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified monthly.

The Company maintains cash and marketable securities to meet its liquidity requirements for up to 30-day periods. Funding in regards to long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.

NOTE 32 - CAPITAL MANAGEMENT POLICIES AND PROCEDURES

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

1. It comprised of outstanding purchase consideration payable to the Parent Company for acquisition of the API business according to the Business Purchase Agreement dated October 9, 2018. The Company repaid the entire debt following IPO.

2. Cost Materials Consumed Changes in inventories of finished goods and work-in-progress

3. Tangible Net Worth Total Debt Deferred Tax Liability Reasons for variance:

A. Debt Service Coverage Ratio

The Company repaid the entire debt in the previous financial year 2021-22, hence debt service coverage ratio is not applicable for the current year.

B. Return on Equity (ROE)

Lower due to higher base of shareholder’s equity on account of IPO.

C. Trade Payable Turnover Ratio

Lower due to favourable credit term from the suppliers as compared to previous year.

NOTE 36

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

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

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

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

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

(vi) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(vii) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

NOTE 37 - AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements were approved by the Board of Directors at their meeting held on 27th April, 2023