1. Useful life of property, plant and equipment and intangible assets

The useful life of the assets are determined in accordance with Schedule II of the Companies Act, 2013. In cases, where the useful life is different from that or is not prescribed in Schedule II, it is based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance.

2. Impairment

An impairment loss is recognised for the amount by which an asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected discounted future cash flows from each asset or cash-generating unit.

3. Deferred tax

Deferred income tax liabilities are recognised for all taxable temporary differences. Deferred income tax asset are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

4. Fair value

Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

5. Post-retirement benefit plans

The obligation arising from the defined benefit plan is determined on the basis of actuarial assumptions which 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 each financial year end on the government bonds.

6. Provisions and contingencies

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 reporting date. The actual outflow of resources at a future date may therefore vary from the figure estimated at end of each reporting period.

2B. New standards and interpretations not yet adopted

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On 28 March 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from

01 April 2018. The Company is evaluating the effect of this on the financial statements.

Ind AS 115 - Revenue from contract with customers:

On 28 March 2018, the Ministry of Corporate Affairs notified Ind AS 115 Revenue from contracts with customers. The standard replaces Ind AS 11 Construction contracts and Ind AS 18 Revenue. The new standard applies to contracts with customers. The core principle of the new standard is that an entity should recognise revenue to depict transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, timing and uncertainty of revenues and cash flows arising from the entity's contracts with customers.

The new standard permits two possible methods of transition:

- Retrospective approach - An entity can choose to apply the new standard to its historical transactions and retrospectively adjust each comparative period.

- Cumulative catch-up approach - An entity can recognise the cumulative effect of applying the new standard at the date of initial application and make no adjustments to its comparative information.

The Company is evaluating the effect of this new standard on revenue trends in the financial statements. The standard is effective for annual periods beginning on or after 01 April 2018.

Note:

Conversion of warrants Previous Year:

Conversion of 5,500,000 warrants issued during FY 2016-17 on preferential basis at a conversion price of '95 per equity share of the Company as approved in the Extra Ordinary General Meeting dated 31 March 2015.

(ii) Terms/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 shares is entitled to one vote per share. Each equity shareholder is entitled to dividend in the Company.

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, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iv) 1,445,200 shares of '2 each (As at 31 March 2017 1,790,000 shares) are reserved towards outstanding employee stock options granted / available for grant.

(v) Aggregate number of shares allotted as fully paid pursuant to contract without payment of cash for a period of 5 years immediately preceding the balance sheet date:

38 Discontinued operations

38.1 Pursuant to the Scheme of Arrangement (the 'Scheme'), duly sanctioned by the National Company Law Tribunal (NCLT), Mumbai, vide Order dated 09 March 2018 ('Order'), with effect from the Appointment Date i.e. 01 October 2017, the Human API business of the Company was transferred to Solara Active Pharma Sciences Limited ('Solara').

In line with the accounting prescribed in the Scheme, the net assets of the Human API business transferred amounting to '1,794.63 have been debited to the securities premium account. The excess of fair value of the Human API business over the net assets transferred amounting to '3,915.37 has been debited to retained earnings with a corresponding credit to the statement of profit and loss as 'Gain on demerger of Human API business'. The Human API business for previous year has been presented as discontinued operations in financial statements.

Pursuant to the above, SeQuent Penems Private Limited has ceased to be the subsidiary of the Company.

38.2 Analysis of profit for the year from discontinued operations

The financial performance and cash flow information of the Human API business included in the statement of profit and loss is as below. The figure for the Human API business included under the current year figure are for the period of 6 months ended 30 September 2017 and are therefore not comparable with the prior year figures (ie year ended 31 March 2017). contribution of '0.46 (as at 31 March 2017 - '5.80 ) is outstanding which is paid subsequent to the end of respective reporting periods.

(ii) Defined benefit plan:

The Company has a defined Gratuity benefit plan. The following table summarises the components of net employee benefit expenses recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the plan.

(vi) No deferred tax adjustments were required in respect of amounts recognised in other comprehensive income in view of the nature of items included therein and the availability of unabsorbed tax losses(including tax depreciation).

(vii) No deferred tax adjustments were considered necessary to be recognised in respect of timing differences associated with investments in subsidiaries.

41 Employee benefit plans

(i) Defined contribution plans:

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised '5.45 (year ended 31 March 2017 - '7.64 ) for Provident Fund contributions and '0.33 (year ended 31 March 2017 - '0.17 ) for Employee State Insurance Scheme contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. As at 31 March 2018,

The current service cost is included in the 'Employee benefit expenses' and the net interest cost is included in the 'Finance costs' line item in the statement of profit and loss.

Dues to micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management based on enquiries made by the Management with the creditors which have been relied upon by the auditors.

44 Segment reporting

I. Primary segment (Business segment):

The Company is mainly engaged in the business of pharmaceuticals. Considering the nature of business and financial reporting of the Company, the Company has only one business segment viz; pharmaceuticals as primary reportable segment.

II. Secondary segment (Geographical segment):

The Company operates in three principal geographic locations.

(i) Europe

(ii) Asia

(iii) Rest of the world

45 Related party transactions

45.1 List of related parties

(i) Subsidiaries

Wholly-owned subsidiaries:

Alivira Animal Health Limited, India SeQuent Research Limited Elysian Life Sciences Private Limited SeQuent Antibiotics Private Limited SeQuent Pharmaceuticals Private Limited

SeQuent Global Holdings Limited (Refer note 4)

SeQuent Scientific Pte Limited (Refer note 5)

Other subsidiaries:

Naari Pharma Private Limited (upto 26 July 2017)

SeQuent Penems Private Limited (upto 30 September 2017) (Refer note 2)

Step down subsidiaries:

Alivira Animal Health Limited, Ireland Alivira Animal Health Australia Pty Limited Provet Veteriner Urunleri San. ve Tic. A.§.

Topkim ilag Premiks San. ve Tic. A.§

Fendigo SA Fendigo BV N-Vet AB

Alivira Saude Animal Brasil Participacoes LTDA Interchange Veterinaria Industria E Comercio S.A. Brasil Vila Vina Participacions S.L.

Laboratorios Karizoo, S.A.

Laboratorios Karizoo, S.A. DE CV. (Mexico)

Comercial Vila Veterinaria De Lleida S.L.

Phytotherapic Solutions S.L Alivira UA Limited Alivira France (Refer note 3)

(ii) Key management personnel

Mr. Manish Gupta, Chief Executive Officer & Managing Director Dr.GautamKumarDas,JointManagingDirector(Upto07January2017) Mr. Sharat Narasapur,Joint Managing Director(From 08 January2017) Mr. Tushar Mistry, Chief Financial Officer (From 11 February 2017) Mr. P R Kannan, Chief Financial Officer (Upto 10 February 2017)

Mr. Krupesh Mehta, Company Secretary (From 11 February 2017)

Mr. Preetham Hebbar, Company Secretary (Upto 10 February 2017)

Mr. K E C Rajakumar, Non-Executive Director

Dr. S Devendra, Non-Executive Director

Dr. Gopakumar G. Nair, Chairman & Independent Director

Dr Kausalya Santhanam, Independent Director

Mr. Narendra Mairpady, Independent Director

(iii) Enterprises owned or significantly influenced by individuals who have control / significant influence over the Company

Strides Shasun Limited Atma Projects

Agnus Holdings Private Limited Chayadeep Properties Private Limited Pronomz Ventures LLP

Naari Pharma Private Limited (From 27 July 2017)

Solara Active Pharma Sciences Limited (From 01 October 2017)

Notes:

1 Related parties are as identified by the Company and relied upon by the Auditors.

2 Pursuant to the scheme of demerger, SeQuent Penems Private Limited has ceased to be the subsidiary of the Company (Refer note 38).

3 Alivira France was incorporated on 02 February 2018.

4 SeQuent Global Holdings Limited ('SGHL'), was wound up vide order dated 06 April 2017.

5 SeQuent Scientific Pte Limited was wound up on 8 January 2018. The above mentioned provides the information about the Company's structure including the details of the subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

46 Operating leases i) Leases as lessee

a) The Company's significant leasing arrangements are in respect of factory building, land and guest houses. The Company has entered in to cancellable lease arrangement with 1 month notice period for its guest houses.

There is no non-cancellable operating lease commitments as at 31 March 2018 and 31 March 2017.

47 Share-based payment arrangements

A. Description of share-based payment arrangements i. Share option programmes (equity-settled)

The Company implemented "SeQuent Scientific Employees Stock Option Plan 2010" (SeQuent ESOP 2010), in the year 2008, as approved by the Shareholders of the Company and the Remuneration / Compensation / Nomination and Remuneration Committee of the Board of Directors.

B. Measurement of fair values

Fair value of share options granted in the year

The weighted average fair value of the share options granted during the financial year is '74.17 (during the year ended 31 March 2017: '103.26). Options were priced using a black scholes model. The fair value of the employee share options has been measured using the Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value.

There have been no transfers among Level 1, Level 2 and Level 3 during the year.

Note:

(i) Refer note 2 (xiv) under significant accounting policies for recognition and measurement of financial assets.

(ii) The fair value of the investments in equity is based on the quoted price. The fair value of investments in mutual fund is based on market observable inputs. Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

50.2 Financial risk management objectives and policies

The Company's principal financial liabilities comprise loans and borrowings, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include investments, loans, trade and other receivables, cash and short-term deposits that derive directly from its operations.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements.

Risk management framework

The Company's activities makes it susceptible to various risks. The Company has taken adequate measures to address such concerns by developing adequate systems and practices. The Company's overall risk management program focuses on the unpredictability of markets and seeks to manage the impact of these risks on the Company's financial performance.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.

The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has established Audit Committee and its constitution, quorum and scope is in line with the Companies Act, 2013, provisions of Listing Agreement as entered with the Stock Exchange/Regulations. The Audit Committee comprises of three non-executive independent directors nominated by the Board of Directors.

The Audit Committee oversees how management ensures compliance of Internal Control Systems, compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

The Audit Committee also reviews the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. In order to ensure that all checks and balances are in place and all internal control systems are in order, regular and exhaustive internal audits are conducted by experienced firms of Chartered Accountants.

50.3 Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from the Company's trade receivables. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by credit-rating agencies.

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.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Group, and incorporates this information into its credit risk controls.

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counter parties that have a good credit rating. The Company does not expect any losses from non- performance by these counter parties, and does not have any significant concentration of exposures to specific industry sectors.

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas. On-going credit evaluation is performed on the financial condition of accounts receivable and where appropriate, credit guarantee insurance cover is purchased.

Information about major Customer

Revenue from single external customer is approximately Rs,513.19 (31 March 2017 Rs,1,210.77) representing 50% of Company's total revenue from continuing business for the year ended 31 March 2018. Apart from the aforesaid single customer, the Company does not have a significant credit risk exposure to any other single counterparty.

In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the company. The Company's maximum exposure in this respect is the maximum amount the Company may have to pay if the guarantee is called on. As at 31 March 2018, an amount of Rs,1,666.62 (as at 31 March 2017 Rs,2,691.61) is outstanding as financial guarantee. These financial guarantees have been issued to banks under the loan agreements entered into with the subsidiaries.

50.4 Liquidity risk

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

The Company has an appropriate liquidity risk management framework for the management of short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company's treasury department is responsible for managing the short-term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by treasury. Long-term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2018 and 31 March 2017:

50.5 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company is exposed to interest rate risk arising mainly from debt. The Company is exposed to interest rate risk because the fair value of fixed rate borrowings and the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates.

The Company is also exposed to foreign currency risk on certain transactions that are denominated in a currency other than the Company's functional currency; hence exposures to exchange rate fluctuations arise. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rate foreign currency exposure.

c) Foreign currency sensitivity analysis

b) Derivatives instruments

Derivative transactions are undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments.

Outstanding forward exchange contracts entered into by the Company as on 31 March 2018 and 31 March 2017:

Cash flow sensitivity analysis for variable-rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2017.The Company is mainly exposed to currency fluctuation of USD and Euro. The following table details the Company's sensitivity to a 10% increase and decrease in the INR against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 10% change in foreign currency rates. A positive numbers below indicates an increase in profit or equity where the INR strengthens 10% against the relevant currency. For a 10% weakening of the INR against the relevant currency, there would be a comparable impact on the profit or equity, and the balance below would be negative.

In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

51 Capital management

The Company manages its capital to ensure that Company will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 23, 25 & 27 and 15 & 16 offset by cash and bank balances) and total equity (as detailed in notes 21& 22) of the Company.

(i) Debt is defined as long-term (including current maturity excluding financial guarantee contracts) and short-term borrowings.

(ii) Other bank balance exclude the bank balance towards unpaid dividend.

(iii) Gearing ratio: Net debt/ Equity. Since net debt is negative at 31 March 2018, gearing ratio is disclosed as Nil.

52 Corporate Social Responsibility Expenses (CSR)

As per Section 135 (1) of the Companies Act, 2013 read with guidelines issued by Department of Public Enterprises, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy.

Details of CSR spent during the financial year:

The Company is in the process of identifying the right charitable institutes to be associated with which has vis-a-vis same purpose as that of Company CSR Policy and therefore, in the current financial year there was a short spent of '0.60 towards the CSR activities.

53 The financial statements were approved for issue by the board of directors on 24 May 2018.