15. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and reliable estimate can be made to settle the amount of obligation. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements

16. Government Grant

Government Grants are recognized in Profit & Loss account in accordance with the related schemes and in the period in which these are accrued.

Grants toward the specific assets are treated as deferred income in Profit & Loss Account are recognised on rational basis over the useful life of the depreciable asset

17. Impairment of Assets

An Asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

18. Trade Receivable/Advances

Trade receivables/advances outstanding for more than three years and other Trade receivables/advances outstanding for less than three years but are doubtful of recovery at the balance sheet date will be written off/provided in the books of accounts except those Trade receivables/advances pertaining to related parties and disputed Trade receivables/advances having matter pending before different courts.

19. Accounting policies not specifically referred to are consistent with generally accepted accounting principles.

b) Arrears of Cumulative Dividend on cumulative Redeemable Preference Shares amounting to Rs.184.60 Lacs Previous year (Rs.170.40 Lacs).

c) In respect of Income Tax matters pending before appellate authorities/Tribunal/ High Courts which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs.43.40 Lacs.

d) In respect of Sale Tax matters pending before appellate authorities/Tribunal which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs.6635.01 Lacs. Out of it the Punjab & Haryana High Court has directed the Sale Tax authorities to not to take coercive steps to recover the demand of 6633.62 lacs

e) In respect of Service Tax matters pending before appellate authorities/Tribunal which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs.17.57 Lacs.

f) In respect of Central Excise matters pending before appellate authorities/Tribunal which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs.213.63 Lacs.

g) In respect of GST matters pending before appellate authorities/Tribunal which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs. 112.42 Lacs.

h) In respect of ESI matter pending before appellate authorities/Tribunal which the Company expects to succeed, based on decisions of Tribunals/Courts there is contingent liability amounting to Rs. 3.33 lacs.

29. During the year 2018-19 the sales tax deptt. Chandigarh has completed the sales tax assessment of the Company for the year 2011-12 and raised a demand of Rs. 66.34 crore on account of VAT and CST (VAT Rs. 14.33 cr, CST Rs. 0.17 cr, penalty Rs. 31.61 cr and interest Rs. 20.23 cr). However the Company has filed appeal against said order with VAT Tribunal as per Punjab VAT ACT and has deposited a sum of Rs 16.65 cr being 25.10% of the above said demand to the sales tax deptt, on 08.05.2019 and the matter is subjudice.

30. (i) R & D : Company is consistently undertaking Research & Development in new areas of Medicine. The R & D facility of the company is duly recognized by Deptt. of Science & Technology, Govt. of India. Company's team consisting of highly qualified scientists has proven their expertise in various areas of technology development. Expenses on Research phase are charged to Profit and Loss account. as laid by Ind AS 38 issued by institute of Chartered Accountant of India on Intangible Assets. Expenditure on R&D incurred by the Company during the Year is:

iii) Compensatory absences

Actuarial Valuation for compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the statement of Profit and Loss amounting to Rs 24.91 Lakhs and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employees compensation.

33. During the year under review the Company has made re-payment of Fixed Deposits amounting to Rs. 4.89lacs. The Company has completed the re-payment of the Deposits as per the re-payment scheme approved by the Hon'ble Company Law Board vide its order dated 30th Sept, 2013. Few of the fixed deposits holders have however not encashed their Fixed Deposits repayments due to which the amount due to them remain unclaimed as at the year end . The Company is com-

mitted to make those repayments as and when the valid claim for the same is filed by the respective Deposit holder.

34 During the year the Company has sold its investment which was 9499720 nos of listed equity shares held in Ind Swift Laboratories Ltd to Essix Bioscinces Ltd for a consideration of Rs. 101/- per shares aggregating to Rs. 9594.72 lacs.

35 (i) During the year the Company has sold Plant & Machinery and other moveable assets of Unit III Baddi to ANG Life-

sciences Ltd for Rs. 544.36 lacs (including GST) In term of agreement dated 24.06.2020 with ANG Lifesciences Ltd.

(ii) During the year the Company has sold Plant & Machinery and other moveable assets of Unit IV Baddi to Kuldeep Kaur for Rs 239.92 Lacs (including GST) In term of agreement dated 30.01.2024 with Kuldeep Kaur.

36. During the year the Board in their meeting held on 25the September,2023 after considering the recommendation of Audit Committee and Independent Directors, approved the scheme of arrangement of amalgamation of the Company with Ind Swift Laborotaries Ltd (ISLL) under section 230-232 and other applicable provisions of the companies act, 2013. The Company has filed an application before the stock exchanges to obtain their no objection certificate. The same is pending before both stock exchanges.

37 (i). Since the company is having accumulated losses and there is no virtual certainty regarding availability of any future

taxable profits in coming financial years, as such in accordance with Ind AS12 (Income Tax) the company has not recognized deferred tax asset.

(ii) During the year no MAT liability arises in view of clause (iii) of Explanation I of sub section 2 of Section 115JB of Income Tax act, 1961.

38. During the year 2019-20 the Central bank of India (Lender Bank), had declared the Company and its Directors naming Sh. S.R. Mehta, Dr. Gopal Munjal, Dr. V.R. Mehta, Sh. Navrattan Munjal, Sh. S.P. Sharma, Dr. V.K. Arora, Sh. S.C. Galhotra Mr. R.S Bedi as willful defaulters.

However, on 03.03.2020 the Central Bank of India had assigned its debt to M/s Edelweiss Assets Reconsruction Company (India) Limited and after that the same was full paid by the Company. The Company has also satisfied the ROC Charge in respect of this loan after getting NOC from Edelweiss on 10th July, 2020. The Company has filed the legal suits against the Bank for setting aside the orders, whereby the Directors have been declared as willful defaulters and the matter is subjudice.

Further as per communication of Central Bank of India No RO/OPR/2022-23 dated 04.02.2023, the Bank has forwarded recommendation for deletion from RBI willful defaulters to its Central office on 04.02.2023.

39. The aggregate depreciation expenses on ROU assets is included under depreciation and amortisation expenses in statement of profit & loss account.

The break up of current & non current lease liabilities as at March 31st , 2024 is as under.

• Debt-Equity Ratio and Retun on Equity Ratio have not been calculated as the Equity/Net Worth of the Company is negative.. ** Net Capital turnover ratio has not been calculated as net capital of the Company is negative.

• Return on Capital Employed ratio has not been calculated as Capital Employed of the Company is negative.

• Debt Service Coverage Ratio has decreased due to decrease in Net Profit . Net proft in last year was more due to gain of exceptional/extraordinary item.

• Current ratio has improved due to sale of non current investments and conversion of current borrowing to non current borrowing.

• Inventory Turnover Ratio has increased due to increase in turnover of the Company.

• Net Profit ratio has decrease due to lower net profit in this year, net profit in last year was more due to gain of exceptional/ extraordinary item.

• Return on investment has decreased due to sale of non current investment.

41. Total Advance to the Executive Directors outstanding as on 31.03.2024 is Rs. 1065.16 Lacs (P.Y. 1087.16Lacs).

42. Sundry Balance/Excess Provision written Back amounting to Rs. 474.66 lacs (Previous year Rs. 262.58 lacs) have been written back during the year being not payable/provision not required.

43. Balance of Debtors, Creditors and Loan & Advances and other (imprest) are subject to Confirmation. The impact of the same if any could not be ascertained.

44. Remittance in Foreign Currency on Account of Dividend:

No Remittance in Foreign Currency on account of dividend was made during the year 2023-24.

45. Earning Per Share (EPS)

(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 has not advanced or loaned or invested funds to any other person or entity, 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 Funding Party (Ultimate Beneficiaries); or

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

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

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

b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(vii) The Company 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.

(viii) The Company is not Covered under section 135 of the Companies Act 2013.

for and on behalf of the Board

AUDITOR'S REPORT

As per separate report of even date

For Jain & Associates S.R.MEHTA G.MUNJAL

Chartered Accountants Chairman Managing Director & CEO

(Regd No. 001361N) DIN - 00005668 DIN - 00005196

(Krishan Mangawa ) ARUN K. SETH ^{GINNY UPPAL}

Partner Chief Financial Officer Company Secretary

Membership No : 513236

Place: Chandigarh Date : 14.05.2024