Pursuant to the Taxation Law (Amendment) Ordinance 2019 ('Ordinance') Issued by Ministry of Law and Justice (Legislative Department) on 20 September 2019 which is effective 1 April 2019, Indian companies have the option to pay corporate income tax at the rate of 22% plus applicable surcharge and cess subject to certain conditions. The Ordinance has been subsequently been enacted as Taxation Laws (Amendment) Act, 2019. The Company made an assessment of the impact and decided to continue with the existing tax structure until utilisation of accumulated minimum alternative tax (MAT) credit and other exemptions. The Company has also re-measured its deferred tax liability following the clarification issued by Technical Implementation Group of Ind AS implementation Committee by applying the lower tax rate in measurement of deferred taxes only to extent that the deferred tax liabilities are expected to be reversed in the period during which it expects to be subject to lower tax rate.

In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. The amount of the deferred tax assets considered realisable, however, could be reduced in the near term if estimates of future taxable income including taxable temporary differences in the future periods are reduced.

Refer note 14(i) for hypothecation of stocks of raw materials, packing materials, finished goods and work-in-process.

Inventory write downs are accounted, considering the nature of inventory, ageing of inventory as well as provisioning policy of the Company. The Company recorded inventory write down of H1,290.11 (2022 - H700.49). This is included as part of cost of materials consumed and changes in inventories of finished goods, work-in-process and stock-in-trade in the statement of profit and loss, as the case may be.

Note 11 - 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 2,370,000,000 equity shares of HI each.

b) Dividends

Indian statutes mandate that dividends be declared out of distributable profits in accordance with the regulations. Should the Company declare and pay dividends, such dividends are required to be paid in INR to each holder of equity shares in proportion to the number of shares held. Dividends are taxable in the hands of the shareholders and tax is deducted by the Company at applicable rates.

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. It is available for utilisation as per the provisions of the Companies Act, 2013.

Capital redemption reserve - The capital redemption reserve had been created as per the requirement of earlier provisions of Companies Act, 1956. Such reserve is not currently available for distribution to the shareholders. The reserve can be utilised in accordance with the provisions of section 69 of the Companies Act, 2013.

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

Retained earnings - Accumulated earnings include all current and prior period 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 at the nominal capital value and excess through securities premium as the case may be.

(IV) As at 31 March 2023, Pursuant to Employee Stock Options Scheme 2016, 78,717 (2022-78,717) options were outstanding,which upon exercise are convertible into equivalent number of equity shares.

(V) 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.

(VI) In the period of five years immediately preceeding 31 March 2023, the Company has not allotted any shares as fully paid up pursuant to contracts without payment being received in cash. Further, the Company has neither issued bonus shares nor bought back any shares during the aforementioned period.

(VII) Employee Stock Option Scheme 2016 (ESOS)

The Company has formulated an Employee Stock Option Scheme 2016 ('ESOS 2016') under which it has made grants on various dates from time to time. Each grant has a vesting period which varies from 1 - 6 years from the date of grant depending on the terms of the grant. The grants are made at the market price of the equity shares of the Company on either the date of the grant or the closing price of the date prior to the day of the grant or the price decided by the Nomination & Remuneration Committee of the Board. Pursuant to ESOS 2016, 78,717 (2022-78,717) options were outstanding as at 31 March 2023, which upon exercise are convertible into equivalent number of equity shares. Employee stock compensation charged during the year is H0.18 (2022 - H2.28).

(A) U.S. $ 200,000,000, 2.00 % resettable onward starting equity-linked securities (Bonds):

The Company had issued Bonds on 28 June 2016. The Bonds become convertible at the option of the holders' of the Bonds (the “Bondholders") after 1 December 2017 and upto the close of business on 18 June 2022 into equity shares. Each Bond will be convertible at the option of the holder thereof into fully paid equity shares at the initial conversion price determined on 30 November 2017.

On 30 November 2017, the Company set the initial conversion price (i.e. the price at which the ordinary shares of theCompany will be issued upon conversion of Bonds subject to any further adjustments according to conditions) at H861.84 as determined in accordance with condition 6.1.3 of the Trust deed. As of 31 March 2022, none of the Bondholders have opted for the conversion option.

On 30 November 2017, the Company confirmed the fixed exchange rate as INR 64.5238 in accordance with the condition 6.1.1 (b) of the Trust Deed dated 28 June 2016 which provides that the fixed exchange rate shall be the FX rate (INR per U.S. $ 1) based on Bloomberg's “BFIX" USD/INR spot mid-price rate 12.00 (Hongkong time) on 30 November 2017.

Unless previously converted, redeemed or purchased and cancelled, the Bonds were to be redeemed on 28 June 2022 (Maturity Date) at 126.42% of their principal amount, together with accrued interest (if any), calculated upto but excluding the maturity date. The Company may, at its own discretion, redeem the Bonds in whole, but not in part, subject to satisfaction of certain conditions.

As per the original Trust Deed, each Bondholder has the right to require the Company to redeem in whole or in part, such Bondholder's Bonds, on 28 July 2021 (Put Option Date), at a price equal to 121.78% of its outstanding principal amount of Bonds, together with interest (if any) accrued but unpaid on 28 July 2021. This is amended in April, 2021 (see note below on Tender Offer and Consent Solicitation).

The FCC Bonds were partially bought back in October 2018 (see note below on Buyback). In addition to that, the Company approved for tender and consent solicitation for amendment of FCC Bonds in February, 2021 (see note below on Tender Offer and Consent Solicitation). Further, the FCC Bonds were partially bought back in September, 2021 and April 2022 (see note below on Buyback). The balance outstanding FCC Bonds were redeemed in May, 2022.

The FCC Bonds were delisted from the Singapore stock exchange in May, 2022.

Buy back of the Company’s U.S. $ 200,000,000 2.00% resettable onward starting equity - linked securities due 2022 - October, 2018:

In September 2018, the Company approved the launch of buyback of FCC Bonds (“Buyback FCCBs") from existing holders of FCC Bonds (“Buyback Bondholders"). MUFG Securities Asia Limited and J.P. Morgan Securities Limited were appointed as Dealer Managers, on behalf of the Company to buyback FCC Bonds at a buyback price of 105% of the principal amount outstanding (being U.S. $ 262,500 for each U.S. $ 250,000 of FCC Bonds), up to an aggregate purchase price of U.S. $ 100 million plus accrued and unpaid interest per FCC Bond. In October 2018, the Company agreed to buyback U.S. $ 86.5 million in aggregate principal amount (representing 346 FCC Bonds in number of U.S. $ 250,000 denomination for each FCC Bond) of the FCC Bonds. These Buyback FCCBs represented 43.25% of the aggregate FCC Bonds. On the closing/settlement date, the Company paid an aggregate purchase price of U.S. $ 90,825,000 for the Buyback FCCBs, plus accrued but unpaid interest. Following settlement, the FCCBs bought back were cancelled and U.S. $ 113.5 million in aggregate principal amount of FCC Bonds remained outstanding. The Company undertook buyback to monetize the opportunity available and to push maturity of external debt. The Company utilised proceeds from an unsecured External Commercial Borrowing facility of up to U.S.$ 100 million (“ECB Facility") from MUFG Bank, Ltd., Singapore Branch, to refinance these Bonds.

Tender Offer of the Company’s U.S. $ 200,000,000 2.00% resettable onward starting equity -linked securities due 2022 and Consent Solicitation from Bondholders - April, 2021:

In March, 2021, the Company announced a launch of a tender offer of the FCC Bonds. The Hong Kong and Shanghai Banking Corporation Limited was appointed as the Dealer Manager on behalf of the Company to tender an aggregate principal amount of up to U.S. $ 38.5 million at a purchase price of 120.30% of the principal amount of the FCC Bonds (Tender Offer) and also invited the holders of the FCC Bonds to approve the amendment of the optional put notice period from not later than 30 days nor more than 60 days prior to the Put Option Date to a minimum of 150 days prior to the Put Option Date by passing an Extraordinary Resolution (Consent Solicitation).

Tender Offer: In April, 2021, an aggregate principal amount of U.S. $ 36.75 million (representing 147 FCC Bonds in number of U.S. $ 250,000 denomination for each FCC Bond) were validly tendered pursuant to the Offer. These tendered FCCBs represented 32.38% of the outstanding FCC Bonds. On the closing/settlement date, the Company paid an aggregate purchase price of U.S. $ 44,210,250 plus accrued but unpaid interest. Following settlement, the tendered FCC Bonds were cancelled and U.S. $ 76.75 million in aggregate principal amount of FCC Bonds remained outstanding. The Company undertook this tender to manage the Company's debt maturity profile by reducing near-term repayable outstanding indebtedness and to reduce interest costs. The Company utilised proceeds from unsecured External Commercial Borrowing facilities from Fifth Third Bank and International Finance Corporation to refinance these Bonds

Consent Solicitation: An Extraordinary Resolution was duly passed at the Bondholders Meeting held on 12 April 2021, with 99.78% of votes cast in favour of the amendment to the optional put notice period. The Company also executed the Supplemental Trust Deed to make the amendment effective from 12 April 2021.

Buy back of the Company’s U.S. $ 200,000,000 2.00% resettable onward starting equity - linked securities due 2022 - September, 2021:

In September 2021, the Company executed a discrete buyback of FCC Bonds (“Buyback FCCBs") from an existing holder of FCC Bonds for principal value of U.S. $ 1 million. The Hong Kong and Shanghai Banking Corporation Limited acted as Dealer Manager, on behalf of the Company to buyback FCC Bonds at a buyback price of 120.30% of the principal amount (representing 4 FCC Bonds in number of U.S. $ 250,000 denomination for each FCC Bond) of the FCC Bonds. On 15 September, 2021, the Company paid an aggregate purchase price of U.S. $ 1,203,000 for the Buyback FCCBs, plus accrued but unpaid interest. Following settlement, the FCCBs bought back were cancelled and U.S. $ 75.75 million in aggregate principal amount of FCC Bonds remained outstanding.

Buy back of the Company’s U.S. $ 200,000,000 2.00% resettable onward starting equity - linked securities due 2022 - April and May, 2022:

In April 2022, the Company executed a buyback of FCC Bonds (“Buyback FCCBs") from an existing holder of FCC Bonds for principal value of U.S. $ 75 million. The Hong Kong and Shanghai Banking Corporation Limited acted as dealer manager, on behalf of the Company to buyback FCC Bonds at a buyback price of 125.26% of the principal amount (representing 300 FCC Bonds in number of U.S. $ 250,000 denomination for each FCC Bond) of the FCC Bonds. On 7 April 2022, the Company paid an aggregate purchase price of U.S. $ 93,945,000 for the Buyback FCCBs, plus accrued but unpaid interest. Following settlement, the FCC Bonds bought back were cancelled and U.S. $ 0.75 million in aggregate principal amount of FCC Bonds remained outstanding.

Following the above buyback in April, 2022, the Company issued a Notice of early redemption to the remaining holders of FCC Bonds for principal value of outstanding U.S. $ 0.75 million for redemption in May, 2022. On 9 May, 2022, the Company paid an aggregate amount of U.S. $ 9,42,860.24 for the Buyback FCCBs, plus accrued but unpaid interest and concluded the redemption of FCC Bonds as per the terms of the Trust Deed.Subsequently the FCC Bonds were delisted from the Singapore Stock Exchange.

(B) U.S. $ 90,825,000, MUFG Bank, ECB Facility:

The Company has obtained Loan Registration Number (LRN) from RBI to raise an ECB Facility to the extent of U.S. $ 100 million. In October 2018, the ECB Facility for U.S. $ 90,825,000 was raised and the proceeds were utilized for the purpose of repurchasing the FCC Bonds. The ECB Facility was raised from MUFG Bank, Singapore with an initial maturity of 5 years. The interest rate for the first 3 years is 4.956% p.a and the interest for the subsequent 2 years is 5.25% p.a.

However, in December, 2021, the loan was extended to bullet maturity of December, 2026. The interest rate was fixed at 4.69% p.a. up to September, 2023 and thereafter at an interest margin of 2.15% p.a. over SOFR.

(C) U.S. $ 40,000,000, International Finance Corporation (IFC), ECB Facility:

The Company has obtained LRN from RBI to raise an ECB Facility to the extent of U.S. $ 40 million. The ECB Facility for U.S. $ 40 million was executed in February, 2021 and the Company availed U.S. $ 16,574,250 in April, 2021 and the proceeds were utilized for the purpose of refinancing the FCC Bonds. The Company further availed U.S. $ 7,500,000 and U.S. $ 1,203,000 in June, 2021 and September, 2021 respectively. The ECB Facility was raised from International Finance Corporation with a maturity of 5.7 years. The interest margin over U.S. $ LIBOR was 3.08%p.a. up to September, 2021; 2.83% p.a. upto June 2023 and 3.26% over SOFR thereafter.

(D) U.S. $ 228,000,000, Sustainability linked syndication loan, ECB Facility:

The Company has obtained LRN from RBI to raise an ECB Facility to the extent of U.S. $ 228 million. During March 2022, the Sustainability linked loan for U.S. $ 228 million was raised and the proceeds were utilized for the purpose of refinancing the U.S. $ 200 million Syndication loan and U.S. $ 28 million Fifth Third Bank loan. The ECB Facility was raised from 10 Foreign banks with a maturity of 5 years. The interest margin is 1.75%p.a. over SOFR.

Secured loans includes working capital facilities, secured by hypothecation of stocks of raw materials, packing materials, finished goods, work-in-process, receivables and equitable mortgage on fixed assets at certain locations.

Unsecured loans includes working capital facilities and other short term credit facilities.

The Company has borrowed secured/unsecured loans at interest rates ranging between 4.85% - 8.20% p.a.

The Company has not defaulted on repayment of secured/unsecured loans and interest during the year.

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. The Company contributed H488.05 (2022 - H456.32) towards the provident fund plan and other funds during the year ended 31 March 2023.

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

(a) In January 2014, the National Pharmaceutical Pricing Authority (NPPA) issued a demand notice of H12.24 Crs as overcharging liability of product “Doxovent 400 mg tab" for the period February 2010 to May 2013. The notice also envisaged a payment of H3.33 Crs towards interest @15% p.a. on the overcharged amount up to 31 January, 2014. The Company had filed a petition under Article 32 with the Hon'ble Supreme Court of India (Hon'ble Court), challenging the issue of the above mentioned demand notice on various grounds. This petition was tagged along with other petitions filed by other pharmaceutical companies, pending before Hon'ble Court relating to the inclusion criteria of certain drugs including “Theophylline" in the schedule of the DPCO, 1995. The Hon'ble Court passed an ad-interim order stating that no coercive steps be taken against the Company towards the said demand. Whilst the matter was pending before the Hon'ble Supreme Court, in October 2015, NPPA issued a fresh demand notice of H12.24 Crs as overcharging liability and H6.39 Crs as interest thereon calculated upto 30 September, 2015 to which the Company has responded stating that the matter was sub-judice. On 20 July, 2016 Hon'ble Supreme Court heard the Company's petition and ordered the petition to be transferred back to Hon'ble Delhi High Court to be heard on merits subject to deposit of 50% of the overcharged claimed amount. The Company has deposited H6.12 Crs (50% of the overcharged claimed amount). The pleadings have been completed and matter is pending for final hearing before Hon'ble Delhi High Court.

(b) On March 10, 2016 Ministry of Health and Family Welfare (MoH) issued notifications prohibiting manufacture for sale, sale and distribution for human use of several Fixed Dose Combination (“FDC") with immediate effect. Several products of the Company were also covered in the notified prohibited “FDC's". The Company had filed five writ petitions in Hon'ble Delhi High Court challenging the notifications issued. The Hon'ble Delhi High Court granted interim relief to the Company by staying the notifications banning the FDC's. The matter was clubbed with petition of other companies before the Supreme Court of India (Hon'ble Court). The Hon'ble Court directed the Drug Technical Advisory Board (DTAB) sub-committee to examine the ban of FDCs. DTAB appointed an expert committee under the chair of Dr. Nilima Kshirsagar (the Committee) to examine the list of banned FDCs. Company made due written and oral representations before the Committee in relation to its affected products. The Committee submitted its report to the Ministry of Health. Meanwhile, taking proactive approach the Company revised the composition of the affected FDC's for its domestic market. Based on the Committee Report, MoH on 7 September, 2018 issued series of notification which prohibited the manufacture for sale, sale or distribution for human use of 328 FDCs with immediate effect. The Company filed writ petitions in the Delhi High Court against the 7 notification/s

in respect of its affected FDCs which were still circulating in the market and obtained an ad interim stay, on the notifications allowing the Company to liquidate its affected FDCs. The Company on 27 March, 2019, withdrew its Writs except for one product meant for exports and for which the Company continues to enjoy an ad-interim protection.

(c) In October 2019, National Pharmaceutical Pricing Authority (NPPA) issued a Show Cause Notice alleging that the Company had violated DPCO 2013 by self-invoking Para 32 in respect of its product Remogliflozin Etabonate Metformin by not seeking approval for exemption from the Government. Although the Company has responded to the Show cause notice, on 2 January, 2020, NPPA issued a letter seeking production of documents /records under Para 29. The Company challenged the decision of NPPA by filing a writ petition before Hon'ble Delhi High Court. In January 2020, Hon'ble Delhi High Court was pleased to note NPPA's submission that without prejudice to the rights of the parties, NPPA will grant a hearing to the Company, to decide on the Company's entitlement under paragraph 32 of the DPCO, 2013 and dispose of the petition, with a noting that in view of the personal hearing, the impugned orders will not be given effect to. Although NPPA granted the Company personal hearing, it issued a ceiling price notification in March 2020 notifying the price of Remolifozin Etabonate Metformin Hydrocloride without deciding the entitlement under paragraph 32 of the DPCO, 2013. The Company thereafter challenged various orders passed by NPPA by filing a fresh writ petition. After hearing both Parties, Hon'ble Delhi High Court was pleased to grant interim relief that no coercive action, based on the Impugned Orders dated 3 March, 2020 and 20 March, 2020, be taken against Company. The matter is currently sub-judice.

(d) On a complaint by a stockiest with the Competition Commission of India (“CCI”) in July 2015 against pharma co.'s (including the Company and its C&F agent) and the Trade associations, alleging refusal to supply medicines to it in spite of having all valid licenses and documents, CCI ordered the Director General (“DG”) to investigate and submit a report. CCI clubbed this matter with other matters on a similar complaint against other pharmaceutical co.'s and local Trade associations. On submission of DG's report CCI issued notices to the Company and some of its employees to submit their objections to the said Report. Despite having contested DG's claim, CCI in its order has found the Company and concerned employees guilty as having contravened provision 3(1) of the Competition Act, 2002 and has levied penalty under the Act. The Company and the concerned employees have appealed the said Order at National Company Law Tribunal (”NCLAT”). The appeals is pending for final hearing.

(e) In response to FDA action on Zantac and its generic equivalent (ranitidine) in late 2019 and early 2020, lawsuits were filed in various jurisdictions against brand-name and generic manufacturers, distributors, and retailers of Zantac and ranitidine, a number of which were consolidated in a Multidistrict Litigation (MDL) in the Southern District of Florida. Plaintiffs in all of the lawsuits allege that ranitidine potentially contains a probable human carcinogen, N-Nitrosodimethylamine (NDMA), that they have developed or will develop cancer as a result of their ingestion of ranitidine, and/or that they were otherwise injured. Glenmark Pharmaceuticals Ltd. (GPL) and Glenmark Pharmaceuticals Inc., USA (GPI) were named in the MDL but all claims against them were dismissed in June 2021 on the basis of federal pre-emption. Plaintiffs are appealing those dismissals in the United States Court of Appeals for the Eleventh Circuit, and those appeals remain pending. In addition to the MDL, GPI has also been named in several non-MDL cases that are proceeding in state court (New Mexico, Illinois, and Pennsylvania); such cases are in the early stages. GPL and GPI will continue to defend these cases vigorously.

(f) From time to time the Company and its certain subsidiaries are involved in various intellectual property claims and legal proceedings, which are considered normal to its business. Some of this litigation has been resolved through settlement agreements with the plaintiffs.

i. A multiple putative class and individual action were filed in 2018 by purchasers of branded Zetia and generic Zetia (ezetimibe) against Glenmark Pharmaceuticals Ltd and Glenmark Pharmaceuticals Inc., before the United States District Court for the Eastern District of Virginia seeking relief under the US antitrust laws. The Plaintiffs allege that Glenmark Pharmaceuticals Ltd and Glenmark Pharmaceuticals Inc. and Merck & Co Inc. (“Merck”) violated the federal and state antitrust laws by entering into a so-called reverse payment patent settlement agreement in Hatch-Waxman patent litigation in May 2010 related to Merck's branded Zetia product. The lawsuits allege that the patent settlement agreement delayed the entry of generic which caused purchasers to pay higher prices. The Company and its US subsidiary (Glenmark Pharmaceuticals Inc., USA) have, subject to final documentation and approval of the Court, after the end of the accounting year, arrived at a settlement with Three Plaintiff Groups collectively representing all of the claims against the Company and Merck in relation to multiple antitrust and consumer protection lawsuits, including a class action, consolidated in the Eastern District of Virginia, US (the "Court”) for a total amount or US$ 87.5 million, payable over two financial years The final settlements will be in accordance with the separate agreements entered into with each of the plaintiff groups and will be subject to the final approval by the Court. The settlements will make clear that the settlements are commercial settlements or civil liabilities and not on the basis of the Company having conceded or admitted any liability, offence, wrongdoing or illegality. Opt-out cases are still pending and timelines are yet to be determined.

ii. Multiple putative class and individual actions were filed in July 2020 by purchasers of branded Bystolic (nebivolol) against Glenmark Pharmaceuticals Ltd.,Glenmark Pharmaceuticals Inc. and Glenmark Pharmaceuticals S.A. (n/k/a Ichnos Sciences S.A.) (collectively, “Glenmark”) in the United States District Court for the Southern District of New York. The Plaintiffs allege that Glenmark and Forest Laboratories, Inc. (“Forest”) violated federal and state antitrust laws by entering into a so-called reverse-payment patent settlement agreement in Hatch-Waxman patent litigation in December 2012 related to Forest's Bystolic product. The lawsuits allege that the patent settlement agreement and mPEGS-1 collaboration agreement delayed the entry of Glenmark's generic nebivolol, which caused purchasers of branded Bystolic to pay higher prices. The Court granted Glenmark and defendants motion to dismiss with prejudice. Plaintiffs have filed appeals. Glenmark believes that its patent settlement agreement and mPEGS-1 collaboration agreement are lawful and will continue defending the case vigorously.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2023 aggregate H1,043.24 (2022 - H1,362.94)

(b) Estimated amount of contracts remaining to be executed on other than capital account, net of advances, not provided for as at 31 March 2023 aggregate H3,753.24 (2022 - H2,383.26)

Note 31 - Leases Company as lessee

The Company's leased assets primarily consist of leases for office premises and godowns. Leases of office premises and godowns generally have lease term between 2 to 12 years. The Company has applied low value exemption for leases laptops, lease lines, furniture and equipment 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.

The weighted average incremental borrowing rate applied to lease liabilities recognised was 10% - 10.40% p.a.

There are several lease agreements with extension and termination options, management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. Since it is reasonable certain to exercise extension option and not to exercise termination option, the Company has opted to include such extended term and ignore termination option in determination of lease term.

Note 35 - 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 invested with banks.

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's interest-rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Company to cash flow interest-rate risk. Borrowings issued at fixed rates expose the Company to fair value interest-rate risk.

Foreign currency sensitivity

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

US Dollar conversion rate was H75.52 at the beginning of the year and scaled to a high of H82.92 and to low of H75.14. The closing rate is H82.16. 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.

Interest rate sensitivity

The Company's policy is to minimise interest rate cash flow risk exposures on long-term borrowings. The Company has taken long term borrowings of USD 253.28 million which are not on fixed rate of interest. Since, there is some element of interest rate risk associated with this, an interest rate sensitivity analysis has been performed.

The Company has taken short term borrowings on fixed rate of interest. Since, there is no interest rate risk associated with such fixed rate loans; an interest rate sensitivity analysis has not been performed.

The bank deposits are placed on fixed rate of interest of approximately 4.30% to 6.40%. As the interest rate does not vary unless such deposits are withdrawn and renewed, sensitivity analysis is not performed.

The Company has outstanding borrowings of USD 253.28 million (2022 - 253.28 million) which are linked to LIBOR/Benchmark prime lending rate (BPLR). Increases by 25 basis points then such increase shall have the following impact on: *Trade receivables are usually due within 60-180 days. Generally and by practice most customers enjoy a credit period of upto 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. In accordance with Ind AS 109, the Company uses (expected credit loss) model to assess the impairment loss or gain. The Company uses a provision matrix

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 scheduled debt servicing payments for long-term financial liabilities as well as cash outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-today 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 period. 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.

For long term borrowings refer note 13 and for Lease obligations refer note 31 for further details Note 36 - 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.

(ii) Dividends not recognised at the end of the reporting period.

In addition to the above dividends, since year end the Board of Directors have recommended the payment of a final dividend of H2.50 (2022 - H2.50) per fully paid up equity share. This proposed dividend is subject to the approval of shareholders in the ensuing Annual General Meeting.

Note 37 - Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. As a result, certain line items have been amended in the financial statements. These reclassifications had no effect on the reported results of operations. Comparative figures have been adjusted to conform to the current year's presentation.

Note 38 - Exceptional Items 31 March 2023

The Company and its US subsidiary (Glenmark Pharmaceuticals Inc., USA) have, subject to final documentation and approval of the Court, after the end of the accounting year, arrived at a settlement with Three Plaintiff Groups collectively representing all of the claims against the Company and Merck in relation to multiple antitrust and consumer protection lawsuits, including a class action, consolidated in the Eastern District of Virginia, U.S. (the “Court") for a total amount of US$ 87.5 million (US Dollar Eighty Seven Point Five million), payable over two financial years. The final settlements will be in accordance with the separate agreements entered into with each of the plaintiff groups and will be subject to the final approval by the Court. The settlements will make clear that the settlements are commercial settlements of civil liabilities and not on the basis of the Company having conceded or admitted any liability, offence, wrongdoing or illegality.

In view of the above and as a prudent measure, the Company has made a provision for the estimated settlement amount of H8,010.53 (equivalent of US$ 87.5 million and related costs) and charged the same to profit and loss account for the year ended 31 March 2023. Due to the non-recurring nature of the provision, the Company has classified this provision as an exceptional item in the financial statements for the year ended 31 March 2023. The resultant deferred tax asset of H2,799.20 has also been recognised. On finalisation of settlement agreements and final approval of the Court, the crystallized liability will be accounted after adjusting the provisions in this respect in the year of final settlement and Court approval.

Exceptional item in the standalone financials for the year ended 31 March 2023 includes a net gain of H3051.85 arising from the divestment of select tail brands and sub-brands from the dermatology segment (India and Nepal business) and gain on sale of cardiac brand Razel (India and Nepal business), net of trade expenses, trade receivables, inventory write-off, other reimbursable expenses and remediation cost of India manufacturing sites.

31 March 2022

On 3rd August 2021, Glenmark Life Sciences Limited (GLS) completed allottment of shares as part of its Initial Public Offering (IPO) and Offer for Sale (OFS). The company offered 6.3 million equity shares of H2 each through OFS and resulted in a gain of H4,303.33 (net of related expenses and cost of equity shares) and recorded as an exceptional item in the financial statements.

Post the sale and IPO, the Company's holding in equity shares of GLS has reduced from 100% to 82.84%.

NOTE 40 - SEGMENT REPORTING

In accordance with Ind AS 108 “Operating Segments", segment information has been given in the consolidated Ind AS financial statements, and therefore, no separate disclosure on segment information is given in these financial statements.

NOTE 41 - OTHER STATUTORY INFORMATION

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

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

c) 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 :

i) 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

ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

d) 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.)

e) The Company is not declared wilful defaulter by any bank or financials institution or lender during the year.

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

period.

g) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.

h) The Company does not have any transactions with companies which are struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

i) 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:

i) 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,

ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

NOTE 42 - AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements for the year ended 31 March 2023 were approved by the Board of Directors on 19 May 2023.