Sustainable Chemistry: Striving For Leadership Through Chemistry

Sustainable
Chemistry
Striving for leadership
through chemistry
29th Annual Report 2018-19

Contents
A C
Corporate Overview Financial Statements
Board of Directors 02 Independent

Auditor’s Report 78
Corporate Information 03
Standalone
Introducing Divi’s 04 Balance Sheet 86
Sustainable Performance 06 Standalone

Statement of Profit & Loss 87
Geographical Market Presence 08
Standalone
Performance Highlights 09
Statement of Cash Flow 88
B
Responsibility at Core 10
Standalone Statement
of Changes in Equity 90
Notes to Standalone
Statutory Reports
Financial Statements 91
Business
Consolidated
Responsibility Report 22
Independent Auditor’s Report 134
Management Discussion
Consolidated Balance Sheet 138
and Analysis 28
Consolidated
Corporate
Statement of Profit & Loss 139
Governance Report 37
Consolidated
Board’s Report 54
Statement of Cash Flow 140
Consolidated Statement
of Changes in Equity 142
Notes to the Consolidated

Financial Statements 143
Notice of Annual General Meeting 190
You can also find this report online on:

www.divislabs.com
At Divi’s, we believe that what we
manufacture to protect the health of people
should also protect the environment.
We, therefore, put our best minds to
work to innovate and evolve our product
processes, chemicals and stewardship
practices across all sectors to produce
safer chemicals. Divi’s steadfast
commitment towards creating innocuous
and affordable products benefits the
people, the Company, it’s customers and
the planet earth. Our financial performance
has reached newer heights while
consistently ensuring sustainability.
We also ensure that all the natural
resources that are utilised in the production
are used optimally. When we ensure our
societal responsibilities are carried well,
and our environment is made safer, we call
our progress, quality growth.
Divi’s Laboratories Limited
Annual Report 2018-19
Board of Directors
Executive Directors
1. Dr. Murali. K. Divi
Chairman & Managing Director
2. N. V. Ramana
Executive Director
3. Madhusudana Rao Divi

Whole-time Director
1 2 3
4. Kiran S. Divi
Whole-time Director
5. Nilima Motaparti
Whole-time Director
4 5
Independent Directors
1. Dr. G. Suresh Kumar
Independent Director
2. R. Ranga Rao
3. K. V. K Seshavataram
1 2 3
4. Dr. Ramesh B V Nimmagadda
5. Dr. S. Ganapaty
6. Prof. Sunaina Singh

Additional Director
4 5 6
02
Corporate Overview
Board of Directors / Corporate Information
Corporate Information
Manufacturing Facilities R&D Centres Subsidiaries

Choutuppal Unit : B-34, Industrial Estate, Sanathnagar, Divis Laboratories (USA) Inc, New Jersey,USA.
Lingojigudem Village, Choutuppal Mandal, Hyderabad. Pin - 500 018 Divi’s Laboratories Europe AG, Basel,
Yadadri Bhuvanagiri Dist. (TG), Pin - 508252 Switzerland.
Lingojigudem Village, Choutuppal Mandal,
DC SEZ Unit – Ongoing Project Yadadri Bhuvanagiri Dist. (TG), Pin - 508 252
Lingojigudem Village, Choutuppal Mandal,
Yadadri Bhuvanagiri Dist. (TG), Pin – 508252 Chippada Village, Bheemunipatnam Mandal,
Visakhapatnam Dist. (A.P), Pin - 531163
Export Oriented Unit:
Chippada Village, Bheemunipatnam Mandal
Divi’s Pharma SEZ:

DSN SEZ Unit:

Auditors Bankers
Visakhapatnam Dist. (A.P), Pin - 531163 Statutory Auditors State Bank of India
DCV SEZ Unit: Ongoing Project Price Waterhouse Chartered Accountants LLP CCG Branch, Door No. 8-2-684/2/A,
Chippada Village, Bheemunipatnam Mandal Plot no. 77/A, 8-2-624/A/1, 3rd Floor, I Floor, NSL Icon Building,
Visakhapatnam Dist. (A.P), Pin – 531163 Road No. 10, Banjara Hills, Anand Banjara Colony,
Hyderabad – 500034. Road No 12, Banjara Hills,
Hyderabad – 500034.
Registrar & Share Transfer Agent Cost Auditor
Karvy Fintech Private Limited HDFC Bank Ltd
EVS & Associates, Cost Accountants, “Bank House”, Wholesale Banking
Karvy Selenium Tower B, Plot No. 31-32, 205, Raghava Ratna Towers, Chirag Ali Lane, Operations,H.No.6-3-246 & 244,
Gachibowli, Financial Dist, Nanakramguda, Hyderabad - 500 001. Road No. 1,Banjara Hills,
Hyderabad - 500032. Hyderabad, Telangana – 500034
Secretarial Auditor
CIN: U72400TG2017PTC117649
V. Bhaskara Rao & Co, Company Secretaries,
6-2-1085/B, Flat No.- 103, Badam Sohana
Apts., Raj Bhavan Road, Somajiguda,
Hyderabad - 500 082.
Date, Time and Venue of AGM Registered Office

23 August 2019, 10.00 AM Divi Towers, 1-72/23(P)/DIVIS/303,
Cyber Hills, Gachibowli,
Global Peace Auditorium, Brahma Kumaris, Hyderabad - 500032, Telangana, India
Shanti Sarovar, Academy for Better World, ClN : L24110TG1990PLC011854
Gachibowli, Phone : 040-2378 6300;
Hyderabad- 500032, Telangana, India Fax: 040-2378 6460
E-mail : mail@divislabs.com
Website : www.divislabs.com
03
Introducing Divi’s
Divi’s is leading manufacturer of active pharma ingredients

(API) with predominance in exports; and exports to
advanced markets in Europe and America constitute about
73% of its revenue.
At Divi’s, we constantly evaluate and review The world is changing more rapidly than ever As part of our aspiration for a sustainable
our chemistry processes for a sustainable before, driven by demographic changes and and competitive business in our domain, we
future. We are passionate about chemistry digital technologies. Pharmaceutical Industry plan our growth with social commitment to
and conscious about our customers’ faces diverse social and environmental create value for society. To achieve this, we
requirements. To be a leading API supplier challenges due to limited natural resources and have set ourselves appropriate financial and
for our customers, we constantly review increasing consumer demands. Chemistry is non-financial targets.
our processes, upgrade our skills and key to solving many of these challenges. We
manufacturing facilities while complying to are augmenting our expertise and evaluating
quality and cGMP regulations; and also our processes in order to develop innovative,
add value to society. The approximately competitive and responsible solutions for
12,000 employees of the Company work on sustainable operations.
optimising our business processes.
Vision Mission
We envision creating value We at Divi’s aim to be a
for all stakeholders by responsible business, adding
manufacturing high quality value through our core
Generic APIs, Custom synthesis competency in the area of
of APIs & Intermediates along chemistry while adhering to our
with Nutraceutical Ingredients core values and serving the
to the Global Pharmaceutical & immediate community and at
Nutraceutical industry through large through our diverse social
sustainable leadership in initiatives that would establish
chemistry. a strong foundation for a better
tomorrow for all stakeholders.
04
Corporate Overview
Introducing Divi’s
Snapshot, FY 2018-19
503624
Total Revenue (H in lakhs)
200554
EBIDTA (H in lakhs)
4520930 697331
Market Capitalisation as on Networth (H in lakhs)
31 March 2019 (H in lakhs)
28% 47% 56% 17%
183323
Profit before tax (H in lakhs)
133265
Profit after tax (H in lakhs)
325422
Gross Block (H in lakhs)
50.20
Earnings per share (H)
50% 53% 8% 53%
05
Sustainable Performance
TOTAL REVENUE PBT GROSS FIXED EPS DIVIDEND

(H In Lakhs) (H In Lakhs) ASSETS (H) (H In Lakhs)
(H In Lakhs)
28% 50% 53.24%
Growth Growth Growth
2017
2018
2019
2017
2018
2019
2017
2018
2019
2017
2018
2019
2017
2018
2019
414172
394971
503624
138823
121936
183323
243724
300966
325422
31951
32004
51206
39.68
32.76
50.20
EBIDTA PAT NETWORTH BOOK VALUE MARKET

(H In Lakhs) (H In Lakhs) (H In Lakhs) PER SHARE (H) CAPITALISATION
(H In Lakhs)
47% 53% 17.10% 17.10% 56.3%
Growth Growth Growth Growth Growth
2017
2018
2019
2017
2018
2019
2017
2018
2019
2017
2018
2019
2017
2018
2019
1656524
2893608
4520930
151375
136311
200554
105327
133265
540891
595965
697331
86958
204
225
263
06
Corporate Overview
Sustainable Performance
NATIONAL EXCHEQUER
H in Lakhs
FY2016 FY2017 FY2018 FY2019
H % H % H % H %
2017
Tax Expense 26516 81.78% 33540 84.59% 34951 85.18% 50094 82.06%
Corporate Dividend tax 5404 16.67% 5404 13.63% 5457 13.30% 8731 14.30%
2018
Other taxes 362 1.12% 502 1.27% 461 1.12% 447 0.73%
Customs duty 141 0.43% 204 0.51% 164 0.40% 1774 2.91%
2019 Total 32423 100.00% 39650 100.00% 41033 100.00% 61046 100.00%
DIRECT ECONOMY IMPACT
H in Lakhs
FY2017 FY2018 FY2019
Total Revenue 414172 394971 503624
Exports 353148 327927 417456
Tax Expense 33540 34978 50022
Consumption of Material 154158 150490 183783
Employee Benefit Expenses 49033 44627 53072
Interest 226 133 350
Dividend & Dividend Tax 31951 32004 51206
EMPLOYEES CUSTOMERS
H in Lakhs
FY2017 FY2018 FY2019 FY2017 FY2018 FY2019
Cost towards wages / salaries 47853 43065 50738 Total Revenue 414172 394971 503624
Other benefit costs 2137 2541 2334 Debtors 100042 111211 128224
Total personnel costs 49990 45606 53072 Payments received during 410745 383802 486611
the year
% of Sales Revenue 12.07% 11.55% 10.54%
Debtors’ outstanding (in 90 103 93
Number of employees 9735 10762 11847 average number of days)
07
Geographical Market Presence

AMERICA
FY2017 FY2018 FY2019 FY2017 FY2018 FY2019

Sales H Lakhs 133808 108749 127212 Sales H Lakhs 47284 34730 59183
ASIA
% Share 33% 28.98% 26.85% % Share 11.66% 9.25% 12.49%

THE WORLD
REST OF
EUROPE
FY2017 FY2018 FY2019 FY2017 FY2018 FY2019

Sales H Lakhs 162825 163798 217452 Sales H Lakhs 9460 20028 13609
% Share 40.16% 43.64% 45.90% % Share 2.33% 5.34% 2.87%
FY2017 FY2018 FY2019

INDIA
Sales H Lakhs 52097 48014 56266

% Share 12.85% 12.79% 11.88%
08
Corporate Overview
Geographical Market Presence / Performance Highlights
Performance Highlights
H in Lakhs
FY2014-15 FY2015-16 FY2016-17 FY2017-18 FY2018-19
Turnover and Profit Indian
Ind AS
GAAP
Revenue# 308401 374985 406578 383723 487966
Revenue Growth (y-o-y) 23% 22% 8% (6%) 27%
Other Income 4284 9592 7594 11248 15658
Total Revenue 312685 384577 414172 394971 503624
Total Income Growth (y-o-y) 20% 23% 8% (5%) 28%
Profit before Interest, depreciation and tax. (EBDIT) 120489 149640 151375 136311 200554
EBDIT to Revenue 39% 39% 37% 35% 40%
EBDIT Growth (y-o-y) 9% 24% 1% (10%) 47%
Finance Charges 186 301 226 133 350
Depreciation 13585 11810 12326 14242 16881
Profit before tax (PBT) 106718 137529 138823 121936 183323
PBT Growth (y-o-y) 6% 29% 1% (12%) 50%
Provision for Taxation 22012 26445 33496 34978 50058
Profit After Tax (PAT) (before OCI) 84706 111084 105327 86958 133265
PAT Growth (y-o-y) 7% 31% (5%) (17%) 53%
Dividend, Share Capital and Capital Employed
Dividend 1000% 500% 500% 500% 800%
Dividend Amount 31951 31951 31951 32004 51206
Dividend payout (%) 38% 29% 30% 37% 38%
Equity Share Capital 2655 5309 5309 5309 5309
Reserves & Surplus 353541 430395 535582 590656 692022
Net Worth 356196 435704 540891 595965 697331
Net Worth growth % 17% 22% 24% 10% 17%
Gross Fixed Assets 195240 219542 243724 300966 325422
Net Fixed Assets 130873 143864 155895 199588 208742
Total Assets 447477 496549 621008 680778 804018
Key Financial Indicators
Earnings per share (face value of H2/- each) 63.82 41.84* 39.68 32.76 50.20
Cash Earnings Per Share (face value of H2/- each) 74.05 46.29* 44.32 38.12 56.56
Gross Turnover Per share (face value of H2/- each) 236 145* 156 149 190
Book Value per share (face value of H2/- each) 268 164* 204 224 263
Net Debt to Equity 0.010 0.010 0.010 0.011 0.015
EBDIT / Gross Turnover % 39% 39% 37% 35% 40%
Net Profit Margin % 27% 29% 25% 22% 26%
RONW % 22% 25% 19% 15% 19%
# Inclusive of excise duty

* Post Bonus Issue
09
Responsibility at Core
At Divi’s we diligently follow our social responsibility efforts to strive to create a

positive impact in the lives of people through our initiatives aimed at improving their
quality of life.
While the Governments are needs such as education and We continue to take long-term
making serious efforts towards health. To supplement these view of our business with a
improving the living standards efforts, Divi’s, Laboratories strong commitment to work
of our people particularly in the has been focussing on social for sustainable living along
rural hinterland, there remains initiatives by reaching out to with creating economic value
a large section of the society deprived sections of society towards sustainable living and
struggling with very basic around its manufacturing sites. empowerment.
Our key focus areas:
Promoting Public Rural

Education Health Development
Empowering Promoting Animal Welfare &

Women Rural Sports Dairy Development
Support to Differently Livelihood Safe Drinking

Abled People Enhancement project Water
Swachh Environmental
Bharat Sustainability
10
Corporate Overview
Promoting Education
Quality of and access to education is a major concern in rural schools as there are fewer teachers, lack of proper text books and learning
material in many rural schools. We realise the importance of education in development of any person’s life for understanding, gainful occupation
and empowerment. We undertake a wide gamut of activities enumerated below and help ensure proper education facilities provided to children
especially the underprivileged ones.
Key Activities Outcomes in FY 2018-19
42 59 5770
To encourage young minds to attend school
and to support the schools, we provided
students with basic necessities such as note Villages covered Government Students impacted
books, uniforms, school accessories and schools reached through this initiative.
furniture and also contribute for teachers’
salaries
47 47 1957
All-in-one books to SSC students to ensure
they study and score well in their examination.
Villages covered Government Students impacted
schools reached through this initiative.
43 62 6005
We ensure that proper nutrition is provided to
students by distributing Horlicks sachets on a
regular basis. Villages covered Government Students per day benefited
11
Key Activities Outcomes in FY 2018-19
11 22 172
As part of digitization program, we ensure
that students in the rural area are benefited
by this technology access. We have provided Digital class rooms Computer labs Computers installed
computer labs and digital training rooms. established established
3798 7
We have been constantly working towards
improvement in the infrastructure of schools.
Some of our contributions include provision of Provided iron grills
Duel desk benches
iron grills for safety of children and distribution in primary schools
distributed
of duel desk benches.
135 37
In order to ensure that education is provided
to deserving students, we give merit base
scholarship. Students awarded with Villages covered
scholarship
We provided teaching/learning materials to

enhance the learning experience of young
minds
23
Schools provided with
1350
Students benefited
teaching learning materials
71
To beautify the walls around the school at
R. Tallavalasa village, we undertook theme
wall painting activity.
Students benefited
800
We undertook construction of play school for
toddlers at Anganwadi Building at Manthena
village.
Families benefited
Mid-day Meal Initiative for schools
30,000
Centralized kitchen at Gambhiram Village
by Akshaya Patra Foundation has become
operational. Divi’s supported this facility. The
Children per day from government schools at
kitchen is equipped with latest green and
Vishakhapatnam and vizianagaram districts
efficient technology.
benefited from this kitchen
12
Corporate Overview
Healthcare
Rural Health care is one of biggest challenges faced by Governments in India, and
over 70 percent of population live in rural areas with inadequate health facilities. To
supplement the efforts of the Government, we also do our part to contribute to good
health and well-being of the people around our manufacturing sites. Our contribution
includes giving the resources and medical help to cure and prevent various health
problems. On an on-going basis, we organize free eye and dental camps, ORT
training and pulse polio campaigns, preventive camps Japanese Encephalitis and
provide nutritious food to TB patients and created awareness on cervical cancer
through cancer walk.
During the year under review, we provided free of cost treatment to children born with
Cleft Lip and Palate Deformities. The treatment was provided by an expert team of
doctors from Canada.
123 Children under the age of 15 years were provided free treatment during the
year.
On TB day, we extended our support to TB patients in 100+ villages by providing

them with nutritious food to 82 TB patients.
42 59 5770
At regular intervals, we organize health check-
up camps at schools to ensure physical
fitness of students. Villages covered Government Students benefited
13
Rural Development
Rural development projects are one of the key focus areas of Divi’s. Through our intervention, we strive to provide basic amenities and infrastructure
along with improving the connectivity to remote villages. Our approach towards rural development has been on understanding the needs of the
people and trying to fulfil the same in co-ordination with the local communities. During the year, we distributed street lights, constructed roads,
drainages and developed burial grounds. We also extended our support to the victims of the recent Titly Cyclone in North Coastal Districts of
Andhra Pradesh by providing them with basic amenities. To strengthen the law and supervision in the rural areas, we donated bikes to traffic police
department of Vizianagaram District and even initiated construction of police control room in Visakhapatnam region in Andhra Pradesh.
J 11 crore
Contribution towards improvement of
Gudivada Annavaram Road near our
manufacturing site.
14
Corporate Overview
Empowering Women
Women form an integral part of society and
need support for skill development and
upgradation to empower them to participate
in the mainstream of society. We have been
following a focused approach of providing
training for self-employment opportunities
to women in the backward regions. We
have constructed Mahila Mandal Building
at Panthangi and Lingojigudem Villages in
Telangana State. We undertook various
training programmes such as tailoring,
books binding, Aarya work and embroidery
to empower women to be self-reliant and
generate financial resource for their families.
Promoting Rural Sports

Donation of Cement Benches to the Cricket
Ground, Pedanagamayyapalem
Support for Constitutional Level Sports Meet
Support to Mr. Paravada Krishna for

Participating in World Ironmen Championship
15
Animal Welfare and Dairy Development

Livestock plays an important role in rural
economy in India and a good number of
families depend upon livestock for their
livelihood. We have been closely working
with experts to enhance veterinary care by
conducting camps and equip veterinary
hospitals with the required medical equipment,
vaccination and medicines. To further extend
our support to farmers, we conducted expert
advisory camps on dairy development, cattle
feed and animal welfare.
Support to differently abled

For the past few years, we have been
constantly supporting differently abled
children through various initiatives. In schools
for visually challenged children, we renovated
dining hall, donated dining tables and
assisted students to get admission for higher
education. Through this initiative so far, 45
Visually Challenged students have completed
SSC and joined in intermediate courses at
Netravidyalaya, Hyderabad.
16
Corporate Overview
Livelihood Enhancement
At our skill development centre, we undertake
a wide range of training programmes
to enhance skills and competency of
underprivileged people and help them secure
income-generating opportunities. We offer
free training courses in the field of sewing
machine operator, general duty assistant
and hospitality. So far 273 youth from our
nearby community were trained and have got
placements in various locations.
17
Safe Drinking water

A large section of the society is still deprived
of clean drinking water facility. To address
this challenge, we initiated ‘SUJALAM’, a
protected drinking water scheme. Through
this scheme we installed RO plants in villages
and initiated smart card system for any
time water (ATW) and handed over to the
local community or administration. We also
ensured that safe and clean drinking water is
available at several villages by building tanks
and providing water through water tankers,
especially in summer.
Drinking Water Tanks
Constructed 7 storage/distribution tanks with a pipeline from Gostani river near our Unit-II to provide water to 15 villages and 13,000 people are
getting clean water every day. So far, our SUJALAM Scheme has benefited 1,75,000 villagers of 47 villages by 65 RO Plants.
18
Corporate Overview
Swachh Bharat
In support to the swachh bharat initiatives of the
Governments, we undertook various initiatives
to maintain cleanliness and hygiene in the
rural villages. These initiatives include setting
up of swachh bins for disposal of Recyclable
and Biodegradable waste separately and
collection of waste by tricycles. Engaging
with local panchayats, we contribute monthly
wages to helpers to ensure regular cleaning
of Swachh bins in 28 locations.
19
Environmental Sustainability
We conduct our business in a sustainable
and responsible manner by optimising our
processes, conserving resources and taking
necessary steps to protect the environment.
Our comprehensive approach towards
environmental sustainability includes:
• Continuously reviewing and evaluating

our manufacturing processes to ensure
optimisation of inputs and time cycles,
eliminating wastages and follow green
chemistry principles.
• Recover, recycle and reuse solvents by

continuously upgrading processes.
• Standardise material handling and reduce

leaks or wastages.
• Minimise consumption of utilities like steam,

power, nitrogen etc., thereby achieving
operational efficiency.
• Effective water conservation by improving

condensate temperature, water recovery
and reusing the water from RO plant.
• Process wastes generated are sent to

other industries like cement, paint, paper
& pulp, leather, phenol, acid, textile, brick
etc., and are used as alternate fuel thus
saving valuable resources.
• Provide and maintain significant greenery

cover across our manufacturing sites with
several forest species and maintain good
ecological balance.
20
Corporate Overview
Operational Safety
Our EHS Management team, along with the • Eliminated manual handling during material • Extended fixed and portable systems for
Production and Process Managers, constantly charging into vessels by adopting closed detecting various gases in process areas.
review all manufacturing processes and align charging methods like Glove Boxes, FIBC Taken up several dust control measures
our standard operating procedures aimed handling through jib crane / monorail, PTS, like Antistatic Flexible Sleeves, Dust leak
at safe and efficient handling by employees. Hoppers including man-way purge type test programs, etc.
Major initiatives taken during the year are: also.
• Arranged oxygen analyzers to the vessels
• Dedicated facility for handling high pressure • Introduced slurry transfers instead of solid for continuous monitoring of required
hydrogenation reactions. material handling (offloading, carrying, oxygen levels.
charging) to avoid employee exposure.
• Procurement of raw materials in bulk Closed handling of catalysts is being • Established automatic CO2 suppression
instead of drums, re-designed storage followed to prevent the fire hazards. system to electrical panels and automatic
tank systems with additional safety features explosion suppression system to critical
for containment and provision of nitrogen • Installed online earth monitoring systems for equipment to control/avert damage.
blanketing systems for flammable storage operating equipment like reactors, ANFs,
tanks to prevent hazards. Tanks that store etc. Introduced in-situ cleaning for vessels • Provided automatic high velocity water
flammable substances have been shifted to to avoid explosive atmosphere and ensure sprinkler system for power transformers.
safe distance from manufacturing blocks to workplace safety.
minimize inherent risks. Mass flow meters
were installed to avoid overflow scenarios.
21
Business Responsibility Report

Section A: General Information about the Company
1. Corporate Identity Number (CIN) of the Company L24110TG1990PLC011854

2. Name of the Company Divi’s Laboratories Limited
3. Registered Address Divi Towers, 1-72/23(P)/DIVIS/303,
Hyderabad – 500 032, Telangana, India
4. Website www.divislabs.com
5. E-mail Id mail@divislabs.com
6. Financial Year reported April 2018 to March 2019
7. Sector(s) that the Company is engaged (industrial activity code-wise) Pharmaceuticals
NIC Code: 2100
8. List of three products/services that the Company manufactures/ Naproxen, Gabapentin, Dextromethorphan HBr
provides
9. Total number of Locations where business activity is undertaken by
the Company
a. Number of International Locations We have marketing subsidiaries at New Jersey in USA and Basel
in Switzerland for our nutraceutical products
b. Number of National Locations 4 manufacturing facilities and 3 R&D Centres. Refer Page No. 3
10. Markets served by the Company – Local/State/National/International Our major markets include Europe, United States of America (USA)
and Asia
Section B: Financial Details of the Company
1. Paid-up Capital H5309 Lakhs

2. Total Revenue H503624 Lakhs
3. Total profit after taxes H133265 Lakhs
4. Total spending on Corporate Social Responsibility (CSR) as 2.13%
percentage of profit after tax (%)
5. List of activities in which expenditure in 4 above has been incurred:- Refer Page No. 63 & 64
Section C: Other Details
1. Does the Company have any Subsidiary Company/ Companies? Yes

2. Do the Subsidiary Company/ Companies participate in the BR Our Subsidiary Companies are closely integrated with our
Initiatives of the parent company? If yes, then indicate the number of Corporate BR initiatives
such subsidiary company(s)
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Yes. We have a Code of Conduct for stakeholders, which we
Company does business with, participate in the BR initiatives of the expect them to follow.
Company? If yes, then indicate the percentage of such entity/entities?
[Less than 30%, 30-60%, More than 60%]
22
Statutory Reports
Section D: BR Information
1. Details of Director/ Directors responsible for BR

(a) Details of the Director/ Directors responsible for implementation of the BR policy/policies
DIN Number 00005040
Name Dr. Murali K. Divi
Designation Chairman & Managing Director
(b) Details of the BR head
DIN Number (if applicable)
Name Mr. Madhusudhana Rao Divi
Designation Whole-time Director
Telephone number 91-40-23786339
e-mail id kishore@divislabs.com
2. Principle-wise (as per NVGs) BR Policy/policies

(a) Details of Compliance (Reply in Y/N)
No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1. Do you have a policy/policies for… Yes Yes Yes Yes Yes Yes Yes Yes
2. Has the policy being formulated in consultation Yes Yes Yes Yes Yes Yes Yes Yes
with the relevant stakeholders?
3. Does the policy conform to any national / Yes* Yes* Yes* Yes* Yes* Yes* Yes* Yes **
international standards? If yes, specify?
4. Has the policy being approved by the board? Yes Yes Yes Yes Yes Yes Yes Yes
If yes, has it been signed by MD/owner/ CEO/
appropriate Board Director?
5. Does the company have a specified committee Yes* Yes* Yes* Yes* Yes* Yes* Yes* Yes*
of the Board/ Director/ official to oversee the
implementation of the policy?
6. Indicate the link for the policy to be viewed www. Available NA www. www. www. www. Available
NA
online? divislabs. on our divislabs. divislabs. divislabs. divislabs. on our
com Intranet com com com com Intranet
7. Has the policy been formally communicated to Yes Yes Yes Yes Yes Yes Yes Yes
all relevant internal and external stakeholders?
8. Does the company have in-house structure to Yes Yes Yes Yes Yes Yes Yes Yes
implement the policies?
9. Does the company have a grievance redressal Yes Yes Yes Yes Yes Yes NA Yes
mechanism related to the policies to address
stakeholders’ grievances related to the policies?
10. Has the company carried out independent Yes Yes Yes Yes Yes Yes Yes Yes
audit/ evaluation of the working of this policy by
an internal or external agency?
*Policies conform to applicable laws and the national standards. Implementation of the Policies lie with the respective functional Heads and reviewed by the Management.
**Divi’s has policies and procedures in line with its business and conform to national and international standards relevant to the type of industry in which it operates
23
Principle-wise Index: Principle 2: Businesses should provide goods and

services that are safe and contribute to sustainability
P1 - Code of Ethics and Business P6 - EHS Policy throughout their life cycle
Conduct
P2 - Product Lifecycle P7 - Policy Advocacy statement 1. List up to 3 of your products or services whose design
Sustainability (EHS Policy) (N.A.) has incorporated social or environmental concerns, risks
P3 - Employee Wellbeing P8 - CSR Policy and/or opportunities.
P4 - Stakeholder Engagement P9 - Quality Policy
• Hydrogen Chemistry
P5 - Human Rights Statement
• Safe handling to reduce exposure of chemicals to environment
(code of conduct)
• Reduction of carbon foot print
3. Governance related to BR 2. For each such product, provide the following details in
respect of resource use (energy, water, raw material etc.)
a Indicate the frequency with which the Board of Directors, per unit of product(optional):
Committee of the Board or CEO to assess the BR
(a) Reduction during sourcing/production/ distribution
performance of the Company. Within 3 months, 3-6
achieved since the previous year throughout the
months, Annually, More than 1 year
value chain?
Annually
(b) Reduction during usage by consumers (energy,
b Does the Company publish a BR or a Sustainability water) has been achieved since the previous year?
Report? What is the hyperlink for viewing this report?
Due to the change in design and process of the products, we
How frequently it is published?
have been able to achieve the following:
Yes, the company publishes a BR report annually. Web link:
• dedicated manufacturing facility constructed for handling
https://www.divislabs.com/csr-and-responsibility/
high pressure hydrogenation reactions for handling critical
Principle 1: Businesses should conduct and reactions/materials.
govern themselves with Ethics, Transparency • reduction of inherent risks.
and Accountability
• eliminated several open solid material charging into vessels by
1. Does the policy relating to ethics, bribery and corruption adopting closed charging methodologies like Glove Boxes,
cover only the company? Does it extend to the Group/ FIBC handling with Jib crane / Monorail, PTS, Hoppers,
Joint Ventures/ Suppliers/Contractors/NGOs /Others? Manway purge hoppers.
The Policy extends to all our stakeholders like suppliers, customers, • closed handling of catalysts to avoid the fire hazards.
employees etc. Divi’s Code of Ethics and Business Conduct • installed ductless hoods, bio-safety cabinets, filters and carbon
conforms to standards of corporate governance by complying with cartridges in quality control units to minimize the emissions.
laws and regulations and to fulfill the responsibilities to stakeholders
• achieved significant reduction of greenhouse gases during
and implement standards of transparency, integrity, accountability
the year through process related initiatives.
and corporate social responsibility in all dealings.
3. Does the company have procedures in place for
2. How many stakeholder complaints have been received
sustainable sourcing (including transportation)?
in the past financial year and what percentage was
satisfactorily resolved by the management? If so, provide (a) If yes, what percentage of your inputs was sourced
details thereof. sustainably? Also, provide details thereof, in about 50
words or so.
We have not received any significant complaints from stakeholders
in the last financial year. Yes, Divi’s has a responsible supply-chain policy aimed at
sustainable sourcing of inputs. The Company has a supplier
evaluation and qualification process. On-site audits/visits
are made to review the practices followed at suppliers’ site
towards this objective.
24
Statutory Reports
4. Has the company taken any steps to procure goods 4. Please indicate the number of permanent employees with
and services from local & small producers, including disabilities: 26
communities surrounding their place of work? If yes,
what steps have been taken to improve their capacity and 5. Do you have an employee association that is recognized
capability of local and small vendors? by management? Divi’s does not have any employee association
or a trade union of workers.
Yes, Divi’s procures, where available, goods and services
from local and small producers. We have a comprehensive 6. What percentage of your permanent employees is
engagement model for encouraging local/small vendors. 48% members of this recognized employee association? Not
of Divi’s procurement is from domestic producers and 52% from applicable
international producers.
7. Please indicate the number of complaints relating to child
Divi’s has continuously put efforts to increase the procuring of labor, forced labor, involuntary labor, sexual harassment
goods and services from the local youth, small producers and in the last financial year and pending, as on the end of the
farmers in the surrounding communities and towards this objective, financial year.
established a community based skill development centre and
No. No. of No. of
also took up several agri programs for upgrading their skills and
complaints complaints
business growth, which helped source food and other items and
Category filed during pending as
services from the surrounding villages.
the financial at end of the
5. Does the company have a mechanism to recycle products year financial year
and waste? If yes what is the percentage of recycling of 1 Child labor/forced Nil Nil
products and waste (separately as <5%, 5-10%, >10%). labor/involuntary
Also, provide details thereof labor
2 Sexual harassment 1 Nil
Yes, we have a mechanism to recycle the process solvents and 3 Discriminatory Nil Nil
allow our wastes to recycle at authorized offsite facilities. Divi’s realized employment
that co-processing of hazardous substances as alternate fuel in
8. What percentage of your under mentioned employees
cement industry is beneficial whereby hazardous wastes are not only
were given safety & skill up-gradation training in the last
destroyed at higher temperature, but its inorganic content gets fixed
year?
with the clinker apart from using the energy content of the waste.
All permanent employees and contract labor of manpower
Principle 3: Businesses should promote the wellbeing contractor undergo safety training. Development opportunities
of all employees for our employees are customized as per their functional
needs. We have in-house skill enhancement programs and
Our Company promotes the well-being of all employees by providing externally supported skill up-gradation programs for employees.
equal opportunities, facilities and a workplace environment that is safe, All employees attend our Health & Safety training programmes.
hygienic, humane and which upholds the dignity of the employees.
We encourage participation of employees through various committees.
We have set up Grievance Redressal Committee for the resolution of
Principle 4: Businesses should respect the interests
disputes or grievances of employees. Management is accessible at all
of, and be responsive towards all stakeholders,
points of time to redress grievances and complaints of employees as per
especially those who are disadvantaged, vulnerable
defined procedures.
and marginalized.
1. Has the company mapped its internal and external

1. Please indicate the total number of employees: 11,847
stakeholders? Yes/No
2. Please indicate the total number of employees hired on
Yes, we have identified the stakeholders, internal and external, who
temporary/contractual/casual basis: 4,310
directly or indirectly influence our business operations. Our major
3. Please indicate the number of permanent women stakeholders are employees, community & society, investors,
employees: 537 shareholders, vendors, suppliers, Government and regulators.
25
2. Out of the above, has the company identified the 2. Does the company have strategies/ initiatives to address
disadvantaged, vulnerable & marginalized stakeholders. global environmental issues such as climate change, global
warming, etc? Y/N. If yes, please give hyperlink for webpage
Yes, as a responsible organization, we are committed to work etc.
for the welfare of communities around us. Various vulnerable
stakeholders around our manufacturing sites have been identified Yes, there is a continuous thrust on “Green Chemistry principles”
and we have devised and implemented various welfare & and the company identifies processes to minimize consumption of
development, livelihood & skill upgradation programs for them hazardous materials & energy, recycle and reduce waste, thereby
from time to time. minimizing the impact on environment. This is made available on
our Company’s website at https://www.divislabs.com/csr-and-
3. Are there any special initiatives taken by the company responsibility/.
to engage with the disadvantaged, vulnerable and
marginalized stakeholders. If so, provide details thereof, 3. Does the company identify and assess potential
in about 50 words environmental risks? Y/N
Yes. Special initiatives are taken by the company to engage with Yes, the company has Environment Management System
the disadvantaged, vulnerable and marginalized stakeholders by (EMS) and key environmental impact/risks are identified and
providing books, special aids, educational material for visually appropriate controls to eliminate/mitigate the risks are identified
challenged, scholarship and school infrastructure. and established.
4. Does the company have any project related to Clean

Principle 5: Businesses should respect and promote Development Mechanism? If so, provide details thereof.
human rights Also, if Yes, whether any environmental compliance
report is filed?
1. Does the policy of the company on human rights cover
only the company or extend to the Group/Joint Ventures/ We currently do not have any Clean Development Mechanism
Suppliers/Contractors/NGOs/Others? (CDM) projects.
Our policy on human rights extends to all across the supply chain 5. Has the company undertaken any other initiatives on –
of our group including suppliers, contractors as well as the local clean technology, energy efficiency, renewable energy,
communities and consumers. etc. Y/N. If yes, please give hyperlink for web page etc.
2. How many stakeholder complaints have been received in Yes, The Company utilises latest technologies towards Green
the past financial year and what percent was satisfactorily Environment. Divi’s EHS policy stresses on continuous process
resolved by the management? upgradation to minimize risks and wastage. It gives utmost
importance for conservation of energy with the objective of improving
We have not received any stakeholder complaints pertaining to
yields or eliminating wastage by increasing overall system efficiency
this principle, during the financial year.
and reviews the processes to minimize energy losses.
Principle 6: Business should respect, protect, and Optimum utilization of energy is achieved through energy efficient
make efforts to restore the environment systems/equipment, using alternate renewable energy and energy
efficient lighting. We also achieve water conservation by harvesting
1. Does the policy related to Principle 6 cover only the rain water, recycling process water & installing equipment and
company or extends to the Group/Joint Ventures/ improving our processes to minimize water utilization.
Suppliers/Contractors/NGOs/others.
6. Are the Emissions/Waste generated by the company
As part of our corporate goals, the Policy demonstrates our within the permissible limits given by CPCB/SPCB for the
commitment to maintain a high standard of environmental financial year being reported?
protection, sharing of best practices and providing a safe and
healthy workplace. The policy is accessible to all our employees & Yes, the emissions/waste generated by our manufacturing facilities
interested parties and to ensure compliance. are well within the permissible limits. This is continuously ensured by
effective online monitoring systems installed at several locations.
26
Statutory Reports
7. Number of show cause/ legal notices received from 4. What is your company’s direct contribution to community
CPCB/SPCB which are pending (i.e. not resolved to development projects- Amount in INR and the details of
satisfaction) as on end of Financial Year. the projects undertaken.
There were no show cause/ legal notices received from CPCB/ Total expenditure incurred on community development initiatives
SPCB in the reporting year. during the financial year is H2837 lakhs. The programs undertaken
are as per the CSR Policy enumerated elsewhere.
Principle 7: Businesses, when engaged in influencing 5. Have you taken steps to ensure that this community
public and regulatory policy, should do so in a development initiative is successfully adopted by the
responsible manner community?
1. Is your company a member of any trade and chamber or Community development initiatives undertaken by Divi’s are
association? If Yes, Name only those major ones that your successfully adopted and continued by the local communities.
business deals with: We have adopted a collaborative and participatory approach in
(a) National Safety Council the formulation and implementation of community development
programs for ensuring continuity and sustainability. Some of our
(b) Pharmaceuticals Export Promotion Council of India
initiatives have exit strategy wherein we handover the project,
(c) Bulk Drug Manufacturers Association after successful implementation, to local administration for the
(d) National Fire Protection Association community ownership.
(e) Swiss-India Chamber of Commerce
(f) The Federation of Telangana And Andhra Pradesh Chambers Principle 9: Businesses should engage with and
of Commerce And Industry provide value to their customers and consumers in a
responsible manner
2. Have you advocated/lobbied through above associations
for the advancement or improvement of public good? 1. What percentage of customer complaints/consumer
Yes/No; cases are pending as at the end of financial year?
No. No pending complaints. The complaints are handled timely as per

the internal SOP and responded to customers.
Principle 8: Businesses should support inclusive 2. Does the company display product information on the
growth and equitable development product label, over and above what is mandated as per
local laws? Yes/No/N.A. /Remarks
1. Does the company have specified programs/initiatives/
projects in pursuit of the policy related to Principle 8? If Yes, all the relevant product information such as name and grade
yes details thereof. of the product, batch number, manufacturing date, re-test date,
quantity, manufacturer’s details, storage and handling instructions,
As part of its CSR policy, the company has taken up several
precautionary/ hazard statements, disposal procedures etc are
initiatives in this regard for the communities or villages around
provided on the labels.
the manufacturing sites. All our programs and initiatives have
complemented and supported the development priorities of the 3. Is there any case filed by any stakeholder against the
local communities. company regarding unfair trade practices, irresponsible
advertising and/or anti-competitive behavior during the
2. Are the programs/projects undertaken through in-
last five years and pending as on the end of financial year.
house team/own foundation/external NGO/government
structures/any other organization? No
All the programs/ projects undertaken by Divi’s are through in-house 4. Did your company carry out any consumer survey/
team. A separate department with qualified staff has been constituted consumer satisfaction trends?
for formulation, implementation and review of CSR activities.
Yes, customer feedback is taken and evaluated periodically.
3. Have you done any impact assessment of your initiative?
Yes. We measure the outcome of every initiative implemented for

the community through listening and feedback. The assessment
helps us in designing new programs and initiatives to address the
felt needs of local communities.
27
Management Discussion and Analysis

1. Economy and Industry Outlook
Global spending on medicines reached $1.2 trillion in 2018 and Company has constantly been working towards improving
is set to be about $1.3 trillion by 2019, growing at about 4–5% quality systems, compliances to environment and safety while
globally. By the year 2023, global spending is expected to exceed simultaneously creating additional capacities with supporting
$1.5 trillion. (IQVIA Institute forecast, January 2019). infrastructure; and is well equipped to service several projects of
customers for custom synthesis opportunities as well as increase
Global growth of medicine spending through 2023 will primarily its generic business.
be driven by developed markets and their adoption of a wave of
newly launched innovative products. Growth in the United States 2.1 Manufacturing Facilities
will be driven by new products and pricing adjustments. Global
growth will be driven by expanded access and use of medicines in The company operates at two manufacturing locations:
pharmerging markets with demographic growth, affordability and
• Unit I, which is the first facility located at village Lingojigudem
government spending. Pharmerging market growth continues to
in Yadadri Bhuvanagiri District near Hyderabad (Telangana)
derive primarily from increasing per capita use due to increasing
which started operations during the year 1995. This
urbanization and growing middle class, but some markets are
facility comprises 13 multi-purpose production blocks
seeing wider uptake of newer medicines as patients’ ability to
with finished product areas for manufacture of APIs and
afford their share of costs improves with economic growth.
intermediates. Spread across about 500 acres equipped
Research and development pipelines are growing while success with diverse equipment for handling various types of
rates are continuing at historic levels and may result in more new chemical reactions supported with all utilities and services;
product launches in the next five years. New products will also and has added capacities and are upgraded, renovated
contribute a larger average annual spending on an absolute dollar and modernized from time to time.
basis but may account for a lower percentage of brand spending,
• Unit-II at village Chippada, Bheemunipatnam Mandal,
as the market for brands will grow overall. Over the next five years,
about 30 KM from Visakhapatnam (Andhra Pradesh) on
life sciences companies will continue to develop and invest in
a 490-acre site. This Unit houses:
artificial intelligence, machine learning and deep learning programs
that might lead to breakthroughs impacting the discovery and • An Export Oriented Unit, which has 8 production
accelerated development of medicines. blocks which has been operating since the year 2003.
• An SEZ Unit, which went into commercial operations

2. Company Overview
during the year 2006 and has 9 production blocks
Divi's Laboratories Limited is a leading manufacturer of Active with all required utilities and infrastructure.
Pharmaceutical Ingredients (“API”), intermediates as well as
• DSN SEZ Unit, which has 6 production blocks and
nutraceutical ingredients offering quality products with the high
went into commercial operations during the year 2011.
level of compliance to customers in over 95 countries. Company
is recognised as a reliable supplier of generic APIs, a trustworthy • All these Units have been adding capacities and are
custom manufacturer to big pharma and is among the top API upgraded and modernized from time to time.
manufacturers worldwide.
2.2 Research Centers
Divi’s operates from its headquarters and registered office at
Hyderabad. The Company has four multi-purpose manufacturing The Company has Research Centers at Sanathnagar,
facilities from two sites with all support infrastructure like utilities, Hyderabad and at the manufacturing sites. These centers
environment management and safety systems. are involved in development of processes for both new
compounds and improvement of processes for compounds
on the market.
28
Statutory Reports
Centres at the manufacturing sites are categorized as Development 2.3 Subsidiaries

and Service Centres. Process Development Centers work on
process development and scale up from gram scale further The company has two subsidiaries M/s. Divi’s Laboratories (USA) Inc.,
through various stages of development, process optimization, in the United States of America and M/s. Divi’s Laboratories Europe AG
impurity profile, pilot studies, pre-validation batches, validation of in Switzerland for marketing its nutraceutical products and to provide a
process and transfer of technology to Plant. The Process Service greater reach to customers within these regions.
Centers review improvement of processes and gives process
support to the Plants from time to time.
Switzerland
Delhi
New Jersey
Visakhapatnam
Mumbai
Kolkata
Hyderabad
Hyderabad Corporate office Visakhapatnam (VIZAG)
750 KMs from unit-1 north east
of VIZAG R&D center unit-2
Manufacturing unit-2
65 KMs towards east
R&D center, unit-1 Chennai
Manufacturing unit -1
3. Internal Control systems
The Company has in place adequate internal financial controls Divi’s encourages and recognizes improvements in work
over financial reporting. It has adopted necessary policies practices. The Company’s internal control system and the internal
and procedures for ensuring the orderly and efficient conduct financial control processes are reviewed by the Audit Committee
of its business, including adherence to Company's policies, periodically. The Management duly considers and takes
safeguarding of its assets, prevention and detection of frauds and appropriate action on the recommendations made by the internal
errors, accuracy and completeness of the accounting records, auditors, statutory auditors and the Audit Committee.
and timely preparation of reliable financial information.
4. Risks and Concerns
The Company maintains a system of well established policies and
procedures for internal control of operations and activities and these Divi’s lays emphasis on risk management and has an enterprise-
are continually reviewed for effectiveness. The internal control system wide approach to risk management, which lays emphasis on
is supported by qualified personnel and a continuous program identifying and managing key operational and strategic risks.
of internal audit. The prime objective of such audits is to test the The Company strives to identify opportunities that enhance
adequacy and effectiveness of all internal control systems laid down organisational values while managing or mitigating risks that can
by the management and to suggest improvements. adversely impact its future performance through:
We believe that the Company’s overall system of internal control is • Integrated process for identification, assessment and reporting
adequate given the size and nature of operations and has effective • Decentralized management of specific opportunities and risks
implementation of internal control self assessment procedures to and
ensure compliance to policies, plans and statutory requirements. • Aggregation at corporate level monitored by the Risk
Management Committee with the overall direction and control
by the Board.
29
The Company continues its initiatives aimed at assessment and regulations, quality testing, standard operating procedures and
avoidance of various risks affecting its business and towards norms. Divi’s has invested in extensive training to incorporate
cost control and efficiency across its businesses and functions, the cGMP updates into its operating systems. The company
taking appropriate measures and reviewing them from time to constantly reviews its policies and procedures to adhere
time. The company’s risk management and control procedures conformity of the various global and domestic regulations for
involve prioritization and continuous assessment of these risks and its manufacturing facilities or statutory compliances.
devise appropriate controls, evaluating and reviewing the control
mechanism and redesigning from time to time in the light of its 4.4 Patent compliance
effectiveness.
The Company manufactures either patent-expired generics
Risks and Risk Mitigation or undertakes custom synthesis of compounds for the
innovator MNC companies. Divi’s continually reviews patent
4.1 Global markets compliance in its process development of active ingredients
and has a monitoring mechanism to validate non-infringement
Divi’s is engaged in manufacture of generic APIs, custom of the processes developed.
synthesis of active ingredients for innovator companies, other
specialty chemicals and nutraceuticals. The Company is 4.5 Employee Relations
very selective in its product portfolio with a focus on export
markets within the domain of its capabilities. As the company We consider employees as an integral part of our operations
has significant exposure to export markets, and hence may and we put in place appropriate compensation plans,
have impact due to global economy or changing dynamics in feedback process, continuing training and upgradation of
the supply-chain of its products in the global markets besides skills in their functional areas. Employee relations are affable
any protective actions by governments of recipient countries. and harmonious with safe and healthy working environment
and all-round contribution and participation in the growth.
4.2 Competition
4.6 Commercial and Financial Risks
In order to stay competitive vis-a-vis its peers in Europe and
US, the Company lays great stress on leveraging its inherent With predominance of its exports, the Company is exposed
skills and strengths in chemistry by building strong customer to a wide spectrum of risks relating to markets, legal disputes
relationships supported by cost competitive and fast delivery relating to contracts, various statutory compliances, credit
structure. However, competition is inherent in the business from suppliers or to customers or from banks/lenders,
of the Company as there are constant efforts in process interest rates, liquidity as well as foreign exchange rate
innovation and cost competitiveness. Divi’s continues to work volatility, continuity in supply of raw materials and prices or
towards optimizing its processes and upgrading its plant of any sudden changes relating to trade and regulations by
capacities and capabilities at its multi-purpose manufacturing countries where company does business; and addresses
facilities to stay competitive and compliant to regulations; these appropriately to mitigate or minimize these risks.
and is also creating additional capacities addressing the Company constantly reviews its systems and processes and
anticipated or increasing business opportunities. takes adequate measures to address these risks or meet its
obligations.
4.3 Regulatory and Quality Compliances
Company has significant exports, besides imports of inputs
The Company devotes significant importance to the regulatory and hence has a large exposure to exchange rate risks. Given
compliances as it accesses advanced markets like Europe the instability in the global, political and economic environment
and USA for a major part of its business. Risks relating to and bilateral trade issues, there has been significant volatility
regulatory compliances to such markets are inherent to the of foreign currency rates. Such events are outside the control
Company’s business. Divi’s has put in place appropriate or horizon of Indian companies and it is becoming very difficult
systems, processes, operations and procedures to monitor to accurately predict currency movements. In the long run,
and ensure consistent practice for the evolving compliance we realise the best way to manage currency fluctuations is
regime for market access to the recipient countries of its to have a better geographic balance in revenue mix factoring
products and specifications. The chemists and staff are Company’s competitive positioning, and to ensure a foreign
periodically retrained so that they are fully aware of the latest currency match between liabilities and earnings.
30
Statutory Reports
Company constantly reviews and aligns its policies and 5. Regulatory Filings/Approvals
decisions to minimize the commercial and financial risks.
Divi’s has triple Certifications ISO-9001 (Quality Systems), ISO-
4.7 Insurance 14001 (Environment Management Systems) and OHSAS-18001
(Occupational Health and Safety systems) for its manufacturing
The Company’s current and fixed assets as well as products
facilities and adheres to cGMP and standard operating practices
are adequately insured against various risks like transit,
in its manufacturing/operating activities and these certifications
fire and allied risks, public and product liability, personnel,
are renewed from time to time. The company has also obtained
directors & officers’ liability etc.
Food Safety System Certification (FSSC) 22000 for vitamins and
4.8 Environment, health and safety carotenoids. All the manufacturing sites are periodically inspected
by US-FDA, EU and other agencies.
As the Company’s manufacturing operations involve complex
chemical reactions, risks exist on any issues relating to safe Divi’s has a total of 39 drug master files (DMFs) with US-FDA and
operations and environment compliances. Divi’s policies and 22 CEPs (Certificates of Suitability) issued by EDQM authorities.
processes are designed and reviewed from time to time Divi’s has filed for a total of 37 patents for generic products.
to adhere to all applicable regulations on the environment
management, employee health and safety. Divi’s continually 6. Business distribution
strives to optimize the resources and upgrade its processes
in order to reduce the environmental impact of its processes, Our product portfolio comprises of two broad categories i) Generic
products and services, besides ensuring health and safety of APIs (Active Pharma Ingredients) and Nutraceuticals and ii) Custom
employees involved in the processes. Synthesis of APIs, intermediates and specialty ingredients for
innovator pharma giants.
4.9 Information Technology
The Company operates predominantly in export markets and has
The Company has put in place an IT policy in order to ensure a broad product portfolio under generics and custom synthesis.
consistency, protection and security of data and IT systems Among Divi’s well distributed product range, some of the
to ensure smooth business processes. The systems used components of the business are given below:
for information security are constantly tested, continuously
updated and expanded. In addition, our employees are Particulars 2018-19 2017-18
regularly trained on data protection and safety including secure Exports 88% 87%
online banking transactions. IT-related risk management Imports (% of material consumption) 52% 52%
exercise is conducted using appropriate protocols and tools. Largest Product 18% 15%
Top 5 Products 47% 46%
4.10 Sustainable operations Top 5 Customers 37% 42%
Exports in $ terms 84% 86%
As part of our efforts towards sustainable business Exports in Pounds 11% 11%
operations, we assess the opportunities and risks associated Exports in Euro 5% 3%
with sustainable sourcing/utilization of resources and
manufacturing activity; and continually evaluate alternatives
and implement optimum processes for sustainable and
safe operations in order to minimize, mitigate or de-risk our
business operations.
31
7. Performance and Operations Review 7.1 Exports
Analysis of profitability (Standalone) for the current and the last Exports constituted 88% of sales revenue during the year.
financial years is given hereunder: Exports to advanced markets comprising Europe and
America accounted for 73% of business.
(J in lakhs)
Particulars 2018-19 2017-18 7.2 Region-wise Sales Revenue
Revenue 487966 383723
Other Income 15658 11248 (J in lakhs)
Total Revenues 503624 394971
Region 2018-19 2017-18
Expenditure 303070 258660
Sales % Sales %
PBDIT 200554 136311
revenue Share revenue Share
Finance Cost 350 133
Depreciation 16881 14242 J lakhs J lakhs
Profit before Tax (PBT) 183323 121936 Asia 59183 12.5% 34730 9.3%
Provision for tax: Europe 217452 45.9% 163798 43.6%
Current Tax 47245 28713 America 127212 26.8% 108749 29.0%
Deferred Tax 2813 6265 Rest of the World 13609 2.9% 20028 5.3%
Profit after Tax (PAT) 133265 86958 India 56266 11.9% 48014 12.8%
Other Comprehensive Income 105 67 Total 473722 100.0% 375319 100.0%
(net of tax)
Region wise Sales Revenue
Total Comprehensive Income 133370 87025
Earnings per Share (EPS)
INDIA, 11.9% ASIA, 12.5%
Basic & Diluted (H) 50.20 32.76
ROW, 2.9%
Operations for the year reflect normalized operations after
successful closure of audits by US-FDA for Company’s
Unit-II at Visakhapatnam, Andhra Pradesh during the last year.
The Company’s Unit-I at Choutuppal, Telangana State was also
inspected by the US-FDA during May 2018; and was concluded
AMERICA,
without any observations. EUROPE, 45.9%
26.8%
Total revenue for the year has increased by 28% to H503624
lakhs. Revenues for the last year were impacted due to the Import
Alert issued by US-FDA on the Company’s Unit-II. PBDIT for the 7.3 Other Income
year grew by 47% to H200554 lakhs. Tax provision accounted to
H50058 lakhs. Other Income mainly comprises of Dividend Income, gain on
forex fluctuation and net gain on financial assets measured
Profit after Tax (PAT) before Other Comprehensive Income for the at fair value. Other Income for the year amounted to H15658
year amounted to H133265 lakhs as against a PAT of H86958 lakhs as against H11248 lakhs last year. Gain on foreign
lakhs for the last year. Earnings Per Share of H2/- each works out currency transactions for the year amounted to H3092 lakhs
to H50.20 for the year as against H32.76 for the last year. as against H2460 lakhs last year.
32
Statutory Reports
7.4 Distribution of Total Revenue
Total Comprehensive Income Net materials consumed, 36.48%

for the year, 26.48%
Other Comprehensive
Income, 0.02%
Employee benefits expense, 10.53%

Income Tax expense, 9.94%
Other expenses, 13.13%

Finance costs, 0.07%
Depreciation and amortization expense, 3.35%
7.5 Material Costs 7.6 Employee Benefits Expense
J in lakhs Employee benefits expense represent salaries and benefits to

Particulars 2018-19 2017-18 employees as also managerial remuneration and commission
Material consumption 208205 152428 to Directors as approved by members.
Changes in inventories of finished Expenses for the year amounted to H53072 lakhs as against
goods and work-in-progress (24422) (1938) H44627 lakhs during the last year. Of this, remuneration to
Net Material Consumption 183783 150490 Directors including commission accounted to H11061 lakhs
Revenue from Operations 487966 383723 during the year as against H7631 lakhs last year.
% of consumption to Revenue 37.7% 39.2%
Increase in employee expenses is on account of revision of
salaries and induction of additional staff at the manufacturing
Material consumption varies from product to product. The facilities.
Company manufactures several active pharmaceutical
Employee cost for the year works out to about 10.5% of total
ingredients and intermediates within the Generic and Customs
revenue.
synthesis groups as well as nutraceuticals. Manufacture
of any product involves stage-wise controlled processing 7.7 Other Expenses
through its chemistry to the specifications under the standard
operating practices complying to cGMP conditions. Major items of Other Expenses are Power and Fuel, Stores &
Spares, Packing Materials, Repairs, Carriage Outward, Sales
Material consumption net of increase/decrease in stocks is Commission, Legal & Professional charges, Environment
about 37.7% of total revenue during the year as compared to Management Expenses and CSR Expenditure.
39.2% during the last year.
Other Expenses for the year accounted for H66215 lakhs as
against H61414 lakhs during the last year. This year we have
33
spent an amount of H2000 lakhs on contribution to political 7.10 Income-tax assets

parties. We also made a donation of H12 crores to an approved
charitable trust engaged in treatment of children born with autism Income-tax assets net of provisions, refunds and adjustments,
spectrum disorders. While there is a slight increase in power & represent the amounts paid pending assessments and
fuel cost, our CSR spend has significantly increased as we have refund.
taken up several social initiatives.
7.11 Other Non-current Assets
Other Expenses account for 13.1% of revenue.
Capital Advances have increased to H20024 lakhs as at the
7.8 Capital Expenditure end of current year as against H8298 lakhs for the last year in
view of the capex programs taken up during the last quarter of
During the year, we have capitalized PPE and Intangible the current year. Non-current assets are regularly monitored.
Assets valuing H26178 lakhs. Deductions of H141 lakhs
represent Assets discarded during the year. 7.12 Inventory position
We have taken up two brownfield projects called DCV SEZ Unit Inventory position for the last two years is as under:
at Chippada, Bheemunipatnam and DC SEZ Unit at Choutuppal, J in lakhs
Nalgonda with an estimated investment of H600 crores each. Particulars 31-03-2019 31-03-2018
Besides this, we have also taken up debottlenecking and Raw Materials 51210 38631
backward integration at both the manufacturing sites. Work-in-Progress 92849 70419
Finished Goods 11338 9346
Capital WIP as at the year-end amounted to H49191 lakhs. Stores and Spares 10921 9743
Total 166318 128139
Addition to Fixed Assets at the existing Units is primarily
to enhance capacities as well as upgrading utilities and The Company undertakes campaign production of large volume
infrastructure for compliances. As the Company has products like Naproxen, Dextromethorphan and Gabapentin
significant accumulation of cash reserves, all capex programs by running the plant at full stream and stock these products
are funded with internal accruals. for sale – thus freeing the multi-purpose plants for producing
other products; and hence carries significant volume of work-
7.9 Investments:
in-progress to be able to service the large volume products. As
The Company has been deploying its surplus cash accruals in the company has a good market share for these products, we
short term funds of SBI Mutual Fund. Investment in the growth do not foresee any problem with marketing these products and
fund plan is classified as non-current investment. This plan has managing the inventory cycle. We also augmented stock of raw
indexation benefit, and will, in the long-term, be giving higher materials to avoid any supply disruptions and ensure continued
yield. Investment in short-term direct fund (daily dividend re- operations. Some of the finished goods / WIP have been written
investment plan, net of taxes) is classified as Current Investment. down to their Net Realisable Value. Slow moving and non-
moving items have been fully provided for.
J in lakhs
7.13 Trade Receivables
Classified 2018-19 2017-18
Particulars J in lakhs
as
SBI Mutual Fund – Non-current 54725 - Particulars 31-03-2019 31-03-2018
direct growth Outstanding for a period 727 3106
SBI Mutual Fund Current 139834 188929 exceeding six months from
– short term direct the date they became due
fund for payment
Total 194559 188929 Others 127591 108283
Less: Allowances for 94 178
The Company has earned a dividend income (net of tax) of doubtful debts
H8406 lakhs during the year on these Investments as against Total 128224 111211
an income of H7612 lakhs during the last year. Gain from Average receivable days 93 103
redemption of mutual fund units amounted to H97 lakhs for
the year as against a gain of H8 lakhs last year.
34
Statutory Reports
Trade Receivables at the year end came to H128224 lakhs as 7.18 Trade Payables
against H111211 lakhs last year. Increase in debtors is due to
higher sales. Trade Payables for raw materials/services amounted to H48331
lakhs as at the end of the year as against H40565 lakhs as at
Trade Receivables outstanding for a period exceeding six the end of last year. Company follows consistent practices of
months from the date they became due for payment amounted procurement and avails efficient credit terms from vendors.
to H720 lakhs (H 3106 lakhs last year). Trade Receivables for the
year include an amount of H18716 lakhs due from subsidiaries. 7.19 Other Financial and Current Liabilities
7.14 Current Loans & Other Current Financial Assets Company has ongoing capex programs and has capital
creditors. All obligations are discharged as per the terms
J in lakhs agreed with the parties. All statutory dues are paid well within
Particulars 31-03-2019 31-03-2018 the scheduled dates.
Loans to Employees 11 17
7.20 Key Financial Ratios
Export incentive receivable 25 21
Insurance claims receivable 110 927
J in lakhs
Loans to subsidiary - 1469
Particulars 31-03-2019 31-03-2018 Change
Total 146 2434
Return on Net 19.11% 14.59% 31%
7.15 Other Current Assets Worth (%)
Return on Capital 30.62% 20.77% 29%
J in lakhs Employed (%)
Particulars 31-03-2019 31-03-2018 Basic EPS (after 50.20 32.76 53%
Indirect Taxes- Input Credits 13021 10503 exceptional items)
Prepaid Expenses 876 577 (H)
Advances to suppliers 5665 4026 Debtors Turnover 4.21 3.73 13%
Other receivables 145 424 Inventory Turnover 3.42 3.11 10%
Total 19707 15530 Current ratio 5.58 7.11 (22%)
Debt Equity ratio 0.015 0.011 36%
There has been accumulation in Input Tax Credit under GST Operating profit 39.82% 34.51% 15%
regime, as exports constitute a predominant part of our margin (%)
business and hence we started claiming refund of GST under Net profit margin (%) 26.46% 22.02% 20%
the GST Rules.
Detailed explanation of ratios:
7.16 Deferred Tax Liabilities
(i) Return on Net Worth
Deferred tax liabilities represent temporary differences arising
between the tax base of assets using the liability method as Return on Net Worth is a measure of profitability of a
also of employee benefit obligations. Deferred tax liability as of Company expressed as a percentage of networth. It
31-03-2019 amounted to H22118 lakhs as against H19269 is calculated by dividing profit after tax for the year by
lakhs as of 31-03-2018. average capital employed during the year.
7.17 Current Borrowings Return on Networth for the year has increased by 31%
primarily because margins/profits were impacted during
Current borrowings representing working capital loans the last year (base effect) due to the import alert and
(secured) as at the end of the year amounted to H10560 lakhs warning letter issued by US-FDA on the company’s
as against H6311 lakhs as at the end of last year. Of this, an Unit-II at Visakhapatnam, as explained in the Board’s
amount of H1090 lakhs has been utilized during the year as report. There was also significant expenditure incurred
loan against fixed deposits pledged with the bank. We will be last year for remediation measures for addressing the
paying interest on the borrowing only when there is utilization issues raised by FDA.
due to shortfall or mismatch between inflows-outflows while we
earn some interest on our deposits. Any surplus amounts at
the end of the day are deployed in money market mutual funds.
35
(ii) Return on Capital Employed Decrease in current ratio during the year is due to the
classification of a part of the investments as non-current
Return on Capital Employed is a ratio that measures a as explained in para 7.9 above.
Company’s profitability and the efficiency with which its
capital is used. In other words, the ratio measures how (vii) Debt Equity Ratio
well a Company is generating profits from its capital. It
is calculated by dividing net operating profit (EBIT) by The ratio is used to evaluate a Company’s financial
average capital employed during the year. leverage. It is a measure of the degree to which a Company
is financing its operations through debt versus wholly
Increase in the ratio for the current year is due to reasons owned funds. It is calculated by dividing a Company’s net
explained above. borrowings by its by its shareholder’s equity.
(iii) Basic EPS Borrowings at the end of the year have increased
compared to last year and the increase represents
Earnings Per Share is the portion of a Company’s profit overnight balances. As explained at para 7.17 above,
allocated to each share. It serves as an indicator of a the company will be paying interest on borrowings only
Company’s profitability. It is calculated by dividing the net when there is utilisation.
profit for the year by weighted average number of shares
outstanding during the year. (viii) Operating Profit Margin
Basic EPS for the current year has increased during the Operating Profit Margin is a profitability or performance
current year by 53% over the previous year. While the ratio used to calculate the percentage of profit a
business, margin and profitability have been impacted Company produces from its operations. It is calculated
during previous year as explained above, the current by dividing the EBIT by total revenue.
year reflected in normalized operations after successful
closure of audits by US-FDA for company’s Unit-2 at (ix) Net Profit Margin
Visakhapatnam, Andhra Pradesh.
The net profit margin is equal to how much net income
(iv) Debtors Turnover or profit is generated as a percentage of revenue. It
is calculated by dividing the net profit for the year by
The above ratio is used to quantify a Company’s total revenue.
effectiveness in collecting its receivables or money owed
by customers. The ratio shows how well a Company 7.21 Cautionary Statement
uses and manages the credit it extends to customers
This report may contain certain statements that the
and how quickly that short-term debt is collected or is
Company believes are or may be considered to be ‘forward
paid. It is calculated by dividing total revenue by average
looking statements’ which are subject to certain risks and
trade receivables.
uncertainties. These estimates and judgments relating
(v) Inventory Turnover to the financial statements have been made on a prudent
and reasonable basis, in order that the statements reflect,
Inventory Turnover is the number of times a Company in a true and fair manner, the state of affairs and profits
sells and replaces its inventory during a period. It is for the year. Actual results may differ materially from those
calculated by dividing total revenue by average inventory. expressed or implied. Significant factors that could influence
the Company’s operations include government regulations,
(vi) Current Ratio tax regimes, market access related regulatory compliances,
patent laws and domestic and international fiscal policies.
The Current Ratio is a liquidity ratio that measures a
Company’s ability to pay short-term obligations or those
due within one year. It is calculated by dividing the
current assets by current liabilities.
36
Statutory Reports
Corporate Governance Report
CORPORATE GOVERNANCE REPORT

Report, in line with the requirements of Regulation 34(3) read regard to all transactions, making all the necessary disclosures and
with Schedule V of the SEBI (Listing Obligations and Disclosure decisions, complying with all the laws of the land, accountability
Requirements) Regulations, 2015, on the practices followed by the and responsibility towards the stakeholders and commitment to
Company and other voluntary compliances: conduct business in an ethical manner.
Your Company adheres to the principles of corporate

1. Company’s Philosophy on Corporate Governance governance and commits itself to accountability and fiduciary
duty in the implementation of guidelines and mechanisms to
Corporate Governance is the set of processes, customs, policies,
ensure its corporate responsibility to the members and other
laws and institutions affecting the way a company is directed,
stakeholders.
administered or controlled. It is a system of structuring, operating
and controlling a company with a view to achieve long-term The Company is in compliance with the requirements stipulated
strategic goals to satisfy shareholders, creditors, employees, under Regulation 17 to 27 and 46 read with Schedule V of
customers, vendors and other stakeholders. Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (“SEBI Listing
Corporate governance is based on principles such as conducting
Regulations”) as amended, with regard to Corporate Governance.
the business with all integrity and fairness, being transparent with
2. Board of Directors
The Board of Directors is the highest governance body constituted to oversee the Company’s overall functioning. The responsibility of Board
is to provide strategic guidance to the Company, to ensure effective monitoring of the management and to be accountable to the Company
and the shareholders. The meetings of the Board of Directors are held generally at Company’s Registered Office at Hyderabad, and are
scheduled well in advance. In case of business exigencies or urgency of matters, resolutions are passed by circulation. Information relating to
the business, operations and risks affecting the Company is regularly placed before the Board for its consideration apart from information as
mentioned in Part A of Schedule II of SEBI Listing Regulations. The Board regularly reviews the compliance reports of all laws applicable to the
Company, prepared by the Company.
2.1 Composition and category
The Board comprises of eleven directors, five of whom are Executive and remaining are Non-executive Independent Directors, including
two Woman Directors of which one is Non-executive Independent Director. The Company has an Executive Chairman. The category of
directors as on 31 March 2019 is as follows:
Name of the Director Designation Category

Dr. Murali K. Divi Chairman and Managing Director Promoter and Executive Director
Mr. N. V. Ramana Executive Director Executive Director
Mr. Madhusudana Rao Divi Whole-Time Director Executive Director
Mr. Kiran S. Divi Whole-Time Director Executive Director
Ms. Nilima Motaparti Whole-Time Director Executive Director
Dr. G. Suresh Kumar Director Non-executive Independent Director
Mr. R. Ranga Rao Director Non-executive Independent Director
Mr. K. V. K. Seshavataram Director Non-executive Independent Director
Dr. Ramesh B. V. Nimmagadda Director Non-executive Independent Director
Dr. S. Ganapaty Director Non-executive Independent Director
Prof. Sunaina Singh* Additional Director Non-executive Independent Director
*Appointed w.e.f 28.03.2019
37
2.2 Attendance of Directors

Directors’ attendance at the Board and General Meetings held during the financial year 2018-19 is as follows:
No. of Board Meetings Attendance at last AGM
Name of the Director
Held Attended
Dr. Murali K. Divi 6 6 Yes
Mr. N. V. Ramana 6 6 Yes
Mr. Madhusudana Rao Divi 6 5 Yes
Mr. Kiran S. Divi 6 5 No
Ms. Nilima Motaparti 6 6 Yes
Dr. G. Suresh Kumar 6 6 Yes
Mr. R. Ranga Rao 6 6 Yes
Mr. K. V. K. Seshavataram 6 6 Yes
Dr. Ramesh B. V. Nimmagadda 6 6 Yes
Dr. S. Ganapaty 6 5 Yes
2.3 Other Directorships
No Director holds membership of more than 10 Committees of Boards nor is a Chairman of more than 5 Committees of Boards of all the
companies in which he/she is a Director.
Number of other Directorships and Chairmanship/ Membership of Committees of each Director in various companies is as follows:
No. of other In other companies
Name of the Director Directorships Committee Committee
Memberships Chairmanships
Dr. Murali K. Divi 5 1 -
Mr. N. V. Ramana - - -
Mr. Madhusudana Rao Divi - - -
Mr. Kiran S. Divi 3 - -
Ms. Nilima Motaparti 3 - -
Dr. G. Suresh Kumar 2 - -
Mr. R. Ranga Rao 1 - 1
Mr. K. V. K. Seshavataram - - -
Dr. Ramesh B. V. Nimmagadda - - -
Dr. S. Ganapaty - - -
Prof. Sunaina Singh - - -
None of the Directors hold directorship in any other listed 2.4 Number & Dates of Board Meetings held during the
company. year
In terms of Regulation 25(8) of SEBI Listing Regulations, The Board meets in executive session at least four times in
Independent Directors have confirmed that they are not a year at quarterly intervals and more frequently if deemed
aware of any circumstance or situation which exists or may necessary, to transact its business. During the financial year,
be reasonably anticipated that could impair or impact their the Board has met six times, i.e. on 26 May 2018, 04 August
ability to discharge their duties. Based on the declarations 2018, 27 October 2018, 02 February 2019, 09 March 2019
received from the Independent Directors, the Board of and 28 March 2019.
Directors has confirmed that they meet the criteria of
independence as mentioned under Regulation 16(1)(b) of the 2.5 Disclosure of relationship between Directors inter-se
SEBI Listing Regulations and that they are independent of the
Dr. Murali K. Divi, Chairman & Managing Director is the father
management.
of Mr. Kiran S. Divi and Ms. Nilima Motaparti, Whole-time
38
Statutory Reports
Directors. Mr. Madhusudana Rao Divi, Whole-time Director is 3. Audit Committee

brother of Dr. Murali K. Divi. None of the other Directors are
related to each other. The primary objective of the Audit Committee of the Company is
to monitor and provide effective supervision of the management’s
2.6 Shares held by Non-Executive Directors financial reporting process with a view to ensure accurate, timely
and proper disclosures and transparency, integrity and quality of
None of the Non-Executive Directors hold any equity shares
financial reporting.
in the Company.
The constitution, terms of reference, role and scope shall be as
2.7 Meeting of Independent Directors
prescribed by Regulation 18 of SEBI Listing Regulations read with
During the year under review, the Independent Directors met Section 177 of the Companies Act, 2013 covering:
on 02 February 2019, inter alia, to review the performance of
a) Oversight of the Company’s financial reporting process and
Non-Independent Directors and the Board as a whole.
the disclosure of its financial information to ensure that the
2.8 Details of familiarization programmes for Independent financial statement is correct, sufficient and credible;
Directors b) Scrutiny and review of all financial transactions, inter corporate
loans, investments, funds utilization, related party transactions
Details of familiarisation programme of the Independent
and the general financial condition of the Company;
Directors are available on the website of the Company at:
https://www.divislabs.com/wp-content/uploads/2018/09/ c) Recommendation for appointment, remuneration and terms
Familiarisation-Programs-for-Independent-Directors.pdf of appointment of auditors of the Company and approval of
remuneration of auditors;
2.9
List of Board’s skills/expertise/competencies
fundamental for the effective functioning of the d) Review and monitor the auditor’s independence and
Company: performance, and effectiveness of audit process;
e) Reviewing, with the management, the periodic financial

The Board has identified the following skills/expertise/
statements and auditor’s report thereon before submission to
competencies fundamental for the effective functioning of the
the Board for approval;
Company which are currently available with the Board:
f) Reviewing, with the management, performance of statutory
Global Understanding the dynamics of global
and internal auditors, adequacy of the internal control
business business relating to the operations of the
systems;
Company and regulatory requirements in the
geographical markets. g) Evaluation of internal financial controls and risk management
Marketing & Understanding the competitive environment systems;
Strategy for Company’s business globally, customer
h) To review the functioning of the Whistle Blower mechanism;
relationships and strategies for continuity and
growth of business for its product range. i) To review statement of deviations in reporting to monitoring
Governance Knowledge of governance processes and agencies.
compliance to applicable laws and regulations
to service best interests of all stakeholders, 3.1 Composition of the Audit Committee and the details
maintaining Board and Management of meetings held and attended by its members:
accountability and corporate ethics and values
The Committee comprises of three Independent Directors.
Leadership Experience in significant enterprise, distinct
The Company Secretary acts as Secretary of the Committee.
roles and responsibilities through organization
The Audit Committee also invites attendance at the meetings
structure, risk management and talent
of the Whole-time Director, the Chief Financial Officer, Internal
development and succession planning.
Technology Knowledge of technology related to Auditor and representatives of Statutory Auditors of the
Company’s current and future products and Company.
business opportunities, of evolving trends of
usage of its product range and of developing
cost efficient processes
39
The Committee met four times during the year, i.e. on 26 May 4.2 Composition of the Compensation, Nomination and
2018, 04 August 2018, 27 October 2018 and 02 February Remuneration Committee and the details of meetings
2019. held and attended by its members:
Designation No. of Meetings The Committee met two times during the year, i.e. on
Name
Held Attended 02 February 2019 and 28 March 2019. Attendance of each
Mr. K. V. K. Chairman 4 4 member of the Committee is as follows:
Seshavataram
Dr. G. Suresh Kumar Member 4 4 Designation No. of Meetings
Name
Mr. R. Ranga Rao Member 4 4 Held Attended
Dr. G. Suresh Kumar Chairman 2 2
Mr. R. Ranga Rao Member 2 2
4. Compensation, Nomination and Remuneration Dr. Ramesh B. V. Member 2 2
Committee Nimmagadda
Compensation, Nomination and Remuneration Committee Dr. S. Ganapaty Member 2 2
comprises of four Independent Directors. The Constitution and terms 4.3 Performance Evaluation
of reference of the Compensation, Nomination and Remuneration
Committee is in compliance with provisions of the Companies Act, The Company has devised a Policy for Performance
2013, Regulation 19 of the SEBI Listing Regulations, and SEBI Evaluation of Independent Directors, Board, Committees and
(Employee Stock Option Scheme and Employee Stock Purchase other individual Directors. The manner in which the evaluation
Scheme) Guidelines, 1999, as amended from time to time. has been carried out has been explained in the Board’s
Report.
4.1. Terms of Reference of the Committee include the
following: The performance evaluation of Independent Directors shall be
done by the entire Board of Directors (excluding the director
• To formulate the criteria for determining qualifications,
being evaluated). On the basis of the report of performance
positive attributes and independence of a Director,
evaluation, it shall be determined whether to extend or continue
and recommend to the Board a policy, relating to the
the term of appointment of the Independent Director.
remuneration for the Directors, key managerial personnel
and other employees.
Independent Directors are expected to provide an effective
• To formulate the criteria for evaluation of performance of monitoring role and to provide help and advice for the
Independent Directors and the Board; and evolve and executive directors. The broad issues considered in
review the policy on Board diversity. evaluating Independent Directors are:
• To identify/ evaluate persons for appointment to the
Board or in senior management in accordance with the • Providing necessary guidance using their knowledge
criteria laid down and to recommend to the Board their and experience in development of corporate strategy,
appointment and/ or removal. major plan of action, risk policy, and setting performance
objectives.
• Support the Board and Independent Directors in
evaluation of the performance of the Board, its • Independence exercised in taking decisions, listening to
committees and individual directors. views of others and maintaining their views with resolute
• Recommend to the Board, all remuneration, in whatever attitude.
form, payable to senior management.
• Ability in assisting the Company in implementing the best
• To administer, monitor and formulate Employees’ Stock corporate governance practices.
Option Scheme with terms and conditions relating to
• Capability in exercising independent judgement to tasks
quantum, exercise, granting, vesting etc and evolve a
where there is a potential for conflict of interest.
procedure for making a fair and reasonable adjustment
to the scheme in case of any corporate actions. • Commitment in fulfilling the director’s obligations fiduciary
• To carry out any other function as is mandated by the Board responsibilities.
from time to time and/ or required by any statutory notification,
amendment or modification, as may be applicable.
40
Statutory Reports
5. Remuneration of Directors 6.1 Composition of the Stakeholders Relationship

5.1 Details of Remuneration to Executive Directors Committee and the details of meetings held and
attended by its members:
(H in Lakhs)
The Stakeholders Relationship Committee consists of
Name Salary PF Perks Commission Total
three Independent Non-Executive Directors and Chief
Dr. Murali K. Divi 90 11 19 5761 5881
Financial Officer of the Company. The Company Secretary
Mr. N. V. Ramana 84 10 15 2881 2990
is the Compliance Officer of the Company for attending to
Mr. Madhusudana 78 9 12 -- 99
complaints / grievances of the members.
Rao Divi
Mr. Kiran S. Divi 78 9 15 1921 2023
Stakeholders Relationship Committee met four times during
Ms. Nilima 48 6 14 -- 68
the year on 26 May 2018, 04 August 2018, 27 October 2018
Motaparti
and 02 February 2019 and considered issue of duplicate
Total 378 45 75 10563 11061
share certificates, transfer / transmission of shares and other
5.2 Details of Remuneration to Non-Executive Directors investor grievances.
There were no pecuniary relationship or transactions of the Non- Designation No. of Meetings
Name
Executive Directors vis a vis the Company. The Company does not Held Attended
pay any remuneration to Non-Executive Directors except sitting Dr. Ramesh B. V. Chairman 4 4
fees and reimbursement of travelling and out of pocket expenses Nimmagadda
for attending the Board/ Committee meetings. The Company Mr. K.V.K. Seshavataram Member 4 4
has not granted any stock options to any of its Non-Executive Dr. S. Ganapaty Member 4 4
Directors. The details of sitting fee paid to Non-Executive Directors Mr. L Kishore Babu Member 4 4
during the year 2018-19 is as follows:
6.2 Complaints / Grievances received and attended
(H in Lakhs)
During the year under review, Company has received 26
Sitting complaints from investors. All were replied/resolved to the
Name of the Non-Executive Director
Fees satisfaction of the investors and no complaints were outstanding.
Dr. G. Suresh Kumar 12
Mr. R. Ranga Rao 13
Mr. K. V. K. Seshavataram 10 7. Corporate Social Responsibility Committee
Dr. Ramesh B. V. Nimmagadda 9
The Corporate Social Responsibility (CSR) Committee’s
Dr. S. Ganapaty 7
Prof. Sunaina Singh* - responsibility is to assist the Board in undertaking CSR activities by
*Appointed w.e.f 28.03.2019 way of formulating and monitoring CSR Policy of the Company.
The brief terms of reference of the Committee are as follows:

6. Stakeholders Relationship Committee
(a) Formulate and recommend to the Board, a Corporate Social
The Stakeholders Relationship Committee is empowered, inter Responsibility Policy in line with the requirement of the
alia, to review all matters connected with the Company’s share Companies Act, 2013 which shall indicate the activities to be
transfers and transmissions and redressal of shareholders/ undertaken by the Company;
investors’ complaints like non-transfer of shares, non-receipt of (b) Recommend the amount of expenditure to be incurred on
dividend, Annual Report etc. CSR activities and
The composition and the terms of reference of Committee are in (c) Monitor the implementation of Corporate Social Responsibility
line with the requirements of provisions of the Companies Act, Policy of the Company from time to time.
2013 and Regulation 20 of SEBI Listing Regulations.
41
7.1 Composition of the Corporate Social Responsibility monitoring the risks and deploy appropriate control systems aimed
Committee and the details of meetings held and at mitigating such risks to the extent possible.
attended by its members:
8.1 Composition of the Risk Management Committee
CSR Committee met five times during the year on 26 May and the details of meetings held and attended by its
2018, 04 August 2018, 27 October 2018, 02 February 2019 members:
and 28 March 2019. The attendance of each member of the
Committee is as follows: Risk Management Committee met once during the year on
10 September 2018. The attendance of each member of the
Designation No. of Meetings Committee is as follows:
Name
Held Attended
Mr. R. Ranga Rao Chairman 5 5 Designation No. of Meetings
Name
Dr. Murali K. Divi Member 5 5 Held Attended
Mr. N. V. Ramana* Member 5 4 Mr. Madhusudana Rao Chairman 1 1
Mr. Madhusudana Rao Member 5 5 Divi
Divi Mr. N. V. Ramana* Member 1 0
Dr. Ramesh B.V. Member 5 1 Mr. Kiran S. Divi Member 1 0
Nimmagadda* Ms. Nilima Motaparti* Member 1 0
Mr. L. Kishore Babu Member 1 1
*Due to reconstitution of the CSR Committee by the Board of Directors Mr. L. Ramesh Babu Member 1 1
at its meeting held on 09 March 2019, Mr. N.V. Ramana ceased to be
the member of the Committee and Dr. Ramesh B.V. Nimmagadda was
*Due to reconstitution of the Risk Management Committee by the Board
of Directors at its meeting held on 09 March 2019, Mr. N.V. Ramana
appointed as member of the Committee w.e.f. 09 March 2019.
ceased to be the member of the Committee and Ms. Nilima Motaparti was
appointed as member of the Committee w.e.f. 09 March 2019.
8. Risk Management Committee

9. Allotment Committee
Risk Management Committee was constituted by the Board to
review the processes and procedures for ensuring that all strategic, The Allotment Committee oversees the issues relating to
operational and regulatory risks are properly identified and that allotment of shares under various corporate actions like Mergers,
appropriate systems of monitoring and mitigation are in place and to Amalgamations, Preferential Issue, Rights Issue, Bonus Issue etc.,
oversee and review the risk management framework, assessment No meetings of the Committee were held during the year.
of risks and minimization procedures. Risk Management Committee
9.1 Composition of the Committee:
of the Company meets from time to time to evaluate and ensure that
the control mechanism operates effectively. Name Category Designation
Dr. G. Suresh Kumar Independent Director Chairman
The Company constantly evaluates various risks – business,
Mr. R. Ranga Rao Independent Director Member
customer concentration, supplier concentration, regulatory
Mr. Kiran S. Divi Whole-time Director Member
compliances, confidentiality of processes, consistency of
cGMP practices, environment, employee health and safety etc., The Company Secretary acts as Secretary of the Committee.
10. General Body Meetings

10.1 General Meetings
Location and time of last three Annual General Meetings and details of special resolutions, if any:
Date & Time Venue Details of Special Resolutions
Year ended
passed, if any
31 March 2018 10 September 2018 at 10 AM Global Peace Auditorium, Brahma Kumaris, Shanti Nil
31 March 2017 25 September 2017 at 10 AM Sarovar, Academy for Better World, Gachibowli, Nil
Hyderabad - 500 032
31 March 2016 29 August 2016 at 10 AM Sundarayya Vignana Kendram (SVK), Gachibowli Nil
X-Roads, Green Lands Colony, Besides Centre
for Good Governance, Serilingampalli Mandal,
Hyderabad – 500 032
42
Statutory Reports
10.2 Special Resolutions through Postal Ballot
Details of special resolution passed through postal ballot, the persons who conducted the postal ballot exercise, details of the voting
pattern and procedure of postal ballot:
The Company had sought the approval of the shareholders by way of Special Resolutions through notice of postal ballot dated
02 February 2019 for the following resolutions, which were duly passed and the results of which were announced on 18 March 2019.
Mr. V. Bhaskara Rao (Membership No. F 5939), Practicing Company Secretary, was appointed as the Scrutinizer to scrutinize the postal
ballot and remote e-voting process in a fair and transparent manner.
No. of No. of No. of % of Votes % of Votes
Votes Votes Cast Votes Cast in Favour Cast Against
Resolution
Polled in Favour Cast on Votes on Votes
Against Polled Polled
Re-appointment of Dr. G. Suresh Kumar 220231528 199357530 20873998 90.52 9.48
(DIN: 00183128) as an Independent Director for a
second term of five consecutive years
Re-appointment of Mr. R. Ranga Rao 220247148 220028052 219096 99.90 00.10
Approval for continuance of Directorship of 220247245 220151716 95529 99.96 00.04
Mr. K. V. K. Seshavataram (DIN: 00060874), as a
Non- Executive Independent Director of the Company
Re-appointment of Mr. K. V. K. Seshavataram 220247245 220147948 99297 99.96 00.04
The postal ballot was carried out as per the provisions of Sections 108 and 110 and other applicable provisions of the Companies Act,
2013 read with the Rules framed thereunder.
In the ensuing AGM, no business is proposed to be transacted requiring a postal ballot.
11. Means of Communication
• Quarterly, half-yearly and annual financial results of the Company are communicated to the Stock Exchanges immediately after the same
are considered by the Board and are published in all India editions of Financial Express and Hyderabad edition of Andhra Prabha.
• Financial results, official news releases of the Company and other shareholder information are also made available on the Company’s
website, i.e. www.divislaboratories.com or www.divislabs.com.
• Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Board’s Report, Auditors’ Report and
other important information is circulated to members and others entitled thereto. The document is also placed on the Company’s website
and sent to Stock Exchanges.
• All periodical compliance filings like shareholding pattern, corporate governance report, company announcements, among others are filed
electronically on NSE Electronic Application Processing System (NEAPS) and BSE Listing Centre.
12. General Shareholder Information
Annual General Meeting

Date: 23 August 2019
Time: 10.00 a.m.
Venue: Global Peace Auditorium, Brahma Kumaris, Shanti Sarovar, Academy for Better World, Gachibowli,
Hyderabad - 500 032
Financial Year 1 April 2018 to 31 March 2019
43
Dividend payment date On or before 06 September 2019

Book Closure Date 17 August 2019 to 23 August 2019
ISIN No INE361B01024
Listing on Stock Exchanges BSE Limited
Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai-400 001
National Stock Exchange of India Limited
Exchange Plaza, Bandra-Kurla Complex,
Bandra (East), Mumbai–400051.
Stock Code BSE - 532488
NSE - DIVISLAB
The Company has paid listing fees for the year 2018-19 to both the above Stock Exchanges.
13. Market Price Data

Monthly high and low quotations as well as the volume of shares traded at BSE and National Stock Exchanges for the financial year 2018-19
are as follows:
BSE Limited National Stock Exchange
Month
Low (J) High (J) Volume Low (J) High (J) Volume
Apr-18 1081.10 1207.85 486240 1079.25 1208.75 11232912
May-18 1041.00 1220.00 664839 1042.20 1223.00 12340331
Jun-18 994.95 1115.00 782143 994.95 1116.90 15601316
Jul-18 1024.85 1165.15 723975 1025.25 1164.55 16948316
Aug-18 1079.80 1327.00 959889 1080.00 1328.00 24339155
Sep-18 1233.00 1425.60 1185338 1232.80 1425.00 23575924
Oct-18 1214.25 1511.90 1323954 1212.50 1512.00 27161123
Nov-18 1421.00 1577.00 1671365 1420.00 1578.00 33887688
Dec-18 1422.00 1551.00 495571 1420.05 1553.15 13227401
Jan-19 1429.30 1547.70 570640 1428.25 1548.00 11091285
Feb-19 1488.90 1697.65 734603 1488.65 1700.00 19010885
Mar-19 1639.30 1767.10 425548 1636.00 1774.95 12592802
Chart given below shows the stock performance at closing prices in comparison to the broad-based index such as BSE Sensex.
BSE Vs DIVI’S LABS (2018-19)

46,000 1,900
44,000 1,800
DIVI’S SHARE PRICE
42,000 1,700
1,600
BSE SENSEX
40,000
1,500
38,000
1,400
36,000
1,300
34,000
1,200
32,000 1,100
30,000 1,000
28,000 900
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
BSE 35,1 35,3 35,4 37,6 38,6 36,2 34,4 36,1 36,0 36,2 35,8 38,6
DIVI’S 1,19 1,05 1,03 1,14 1,30 1,31 1,48 1,43 1,48 1,50 1,65 1,70
BSE DIVI’S
44
Statutory Reports
14. Unclaimed Dividend Amounts and Transfer to IEPF
The Company has transferred dividend amounts which remained unpaid or unclaimed for a period of seven years from the date of their transfer
to unpaid dividend account, from time to time, on due dates to the Investor Education and Protection Fund (IEPF) administered by the Central
Government.
The Company has uploaded the details of unpaid and unclaimed dividends lying with the Company as on 10 September 2018 (date of last
Annual General Meeting) on the website of the Company, and on the website of the Ministry of Corporate Affairs.
During the year under review, the Company has credited H12.57 lakhs to the Investor Education and Protection (IEPF) pursuant to Section
125(1) of the Companies Act, 2013.
Information in respect of such unclaimed dividends due for transfer to the Investor Education and Protection Fund (IEPF) is as follows:
Date of Amount outstanding as Due for transfer to IEPF

declaration of on 31 March 2019 on
dividend (JIn lakhs)
2011-2012 06.08.2012 8.78 05.09.2019
2012-2013 05.08.2013 8.80 04.09.2020
2013-2014 25.08.2014 13.97 24.09.2021
2014-2015 31.08.2015 11.83 30.09.2022
2015-2016 (Interim) 10.03.2016 15.68 09.04.2023
2016-2017 25.09.2017 29.07 24.10.2024
2017-2018 10.09.2018 9.18 09.10.2025
In accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), shares in respect of which dividend has not been paid
or claimed for seven consecutive years or more, will be transferred to the demat account of IEPF Authority. The Company has sent notice to
all shareholders whose shares are due to be transferred to the IEPF Authority. Members are advised to visit the website of the company to
ascertain the details of shares liable for transfer in the name of IEPF Authority.
Shareholders whose unclaimed dividend/ shares are transferred to the IEPF Authority can now claim their unclaimed dividend and shares from
the Authority by following the Refund Procedure as detailed on the website of IEPF Authority.
15. Share Transfer System
The Stakeholders Relationship Committee approves transfer of shares in physical mode. The Company’s RTA transfers the shares within 15
days of receipt of request, subject to documents being valid and complete in all respects. Dematerialization is done within 15 days of receipt
of request along with the shares through the Depository Participant of the shareholder. The Stakeholders Relationship Committee will meet as
often as required to approve share transfers and to attend to any grievances or complaints received from the members.
Members may please note that the Securities and Exchange Board of India (SEBI) has made it mandatory to furnish PAN particulars for registration of
physical share transfer requests. Hence, all members are required to furnish their PAN particulars in the transfer deed while seeking transfer of shares.
16. Distribution of Shareholding as on 31 March 2019
No. of % of No. of % of
Category
shareholders shareholders shares shareholding
1 – 5000 79077 97.66 9153445 3.45
5001 – 10000 635 0.78 2298181 0.87
10001 – 20000 481 0.59 3637885 1.37
45
No. of % of No. of % of
Category
shareholders shareholders shares shareholding
20001 – 30000 173 0.21 2099001 0.79
30001 – 40000 115 0.14 2087387 0.78
40001 – 50000 61 0.08 1403403 0.53
50001 – 100000 150 0.19 5415946 2.04
100001 & above 280 0.35 239373332 90.17
TOTAL 80,972 100 265468580 100
17. (i) Shareholding Pattern
As on 31 March 2019 As on 31 March 2018

Category No. of shares % to share No. of shares % to share
capital capital
Promoters 138069360 52.01 138181232 52.05
Mutual Funds 36885049 13.89 41025312 15.45
Banks/Financial institutions/NBFCs 878527 0.33 886347 0.33
Foreign Portfolio Investors 56301726 21.21 48862026 18.41
Private Corporate Bodies 9580167 3.61 10997986 4.14
Indian Public 20299839 7.65 22366479 8.43
Non-Resident Indians 1405037 0.53 1579752 0.60
Clearing Members 1100194 0.41 349352 0.13
Trusts 934582 0.35 662643 0.25
Alternative Investment Fund -- -- 554069 0.21
IEPF 14099 0.01 3382 0.00
Grand Total 265468580 100 265468580 100
(ii) Shareholding Profile as on 31 March 2019
Mode of holding No. of holders No. of Shares % to Equity

NSDL 56925 259019903 97.57
CDSL 23997 5750841 2.17
PHYSICAL 50 697836 0.26
Total 80972 265468580 100
Shareholding Profile as on 31 March 2019
CDSL - 2.17%
PHYSICAL - 0.26%
NSDL - 97.57%
46
Statutory Reports
18. Dematerialization of Shares and Liquidity Plot No. 31 – 32, Gachibowli,

Financial District, Nanakramguda,
The Company’s shares have been mandated for compulsory Hyderabad – 500 032,
trading in demat form. Valid demat requests received by the Telangana, INDIA
Company’s Registrar are confirmed within the statutory period. CIN: U72400TG2017PTC117649
Phone No: 040-67161526;
International Securities Identification Number (ISIN) allotted for
Fax: 040-23001153
the Company by NSDL and CDSL is INE361B01024. In case a
Toll Free No. 1800-3454-001
member wants his shares to be dematerialized, he may send the
E-mail: einward.ris@karvy.com
shares along with the request through his depository participant
(DP) to the Registrars, M/s. Karvy Fintech Private Limited. Company:
The Company’s Registrars promptly intimate the DPs in the event The Company Secretary & Compliance Officer,
of any deficiency and shareholders are also kept abreast. Pending Divi’s Laboratories Limited
demat requests in the records of the Depositories, if any, are 1-72/23(P)/DIVIS/303, Divi Towers,
continually reviewed and appropriate action initiated. Cyber Hills, Gachibowli,
Hyderabad – 500 032,
As on 31 March 2019, 99.74 % of the shares were in demat mode. Telangana, INDIA
CIN: L24110TG1990PLC011854
Phone: 040-2378 6300;
19.
Outstanding GDRS/ADRS/Warrants or Any
Fax: 040-2378 6460
Convertible Instruments, Conversion Date and
E-mail: cs@divislabs.com
Likely Impact on Equity
We have no GDRs/ADRs or any commercial instrument. 23. Credit Rating
CARE Ratings Limited has reaffirmed the credit rating for the Company
20. Commodity Price Risk or Foreign Exchange Risk
as CARE AA+ Outlook: Stable for long-term bank facilities and AA+
and Hedging Activities
(Stable) outlook: Stable, A+ for long/short-term bank facilities.
The Company is not carrying on any Commodity Business and
has not undertaken any hedging activities. 24. Other Disclosures
A) Dividend Distribution Policy:
21. Plant Locations
This Policy is also available on the website of the Company: (http://
www.divislabs.com)
Choutuppal Lingojigudem Village, Choutuppal Mandal
Unit: Nalgonda Dist. (TS), Pin Code - 508252. 1. Preamble
Export Chippada Village, Bheemunipatnam Mandal
This Policy has been adopted by the Board of Directors (the
Oriented Unit: Visakhapatnam Dist. (A.P), Pin Code - 531163
“Board”) of Divi’s Laboratories Limited (the “Company”) at its
Divi’s Pharma Chippada Village, Bheemunipatnam Mandal
meeting held on 12 August, 2016. The Board may review
SEZ: Visakhapatnam Dist. (A.P), Pin Code - 531163
and amend this policy from time to time and shall comply with
DSN SEZ Chippada Village, Bheemunipatnam Mandal
SEBI Listing Regulations and the provisions of the Companies
Unit: Visakhapatnam Dist. (A.P), Pin Code - 531163
Act, 2013 as amended.
22. Address for Correspondence 2. Policy

The Board of Directors decides each year, in accordance
Registrar and Share Transfer Agents:
with this policy, which portion of the earnings shall be retained
M/s. Karvy Fintech Private Limited to fund future growth or for other purposes and the portion
Unit: Divi’s Laboratories Limited of earnings to be distributed to reward shareholders for their
Karvy Selenium Tower B, investment in the Company.
47
Dividends are declared at the Annual General Meeting of while also taking into account the needs of business and
the shareholders based on the recommendation by the consistency of dividend payout.
Board. The Board may recommend dividends, to be paid
to shareholders, after taking into consideration the operating e) Utilisation of retained earnings:
and financial performance of the Company, the advice of
Profits as earned by the Company may either be retained
executive management and other relevant factors. The Board
in business for future business needs as detailed under
may also declare interim dividends.
(b) above or may be distributed to the shareholders
This Policy sets out the parameters and circumstances that
f) Manner of payout:
may be taken into account by the Board in determining
recommendation of dividend and/or retain the profits earned o Interim dividend, if any, may be declared by the Board.
by the Company.
o Recommendation of dividend, if any, shall be done by
a) Statutory requirements: the Board, usually at the Board Meeting that considers
and approves the annual financial statements.
The Company shall observe the relevant statutory
requirements for creation of any reserves from out of o Dividend recommended by the Board is subject to
profits etc., as provided in the Companies Act, 2013 as approval by members at the annual general meeting
applicable while taking decisions for dividend declaration of the Company.
or retention of profits. o Payment of dividends shall be made within
the stipulated time and in compliance with the
b) Prudential requirements: regulations or the applicable laws.
The Company shall analyse the prospective projects,
g) Circumstances under which dividend may not be
capital expenditure for expansions, growth of business,
working capital needs, acquisitions, strategic decisions or paid
as a result of expanded capital on account of bonus, new
The Board may in extraordinary circumstances like
issue of various classes of shares or debentures, which
adverse market conditions, business uncertainty,
may need creation of healthy reserve, internal resources,
inadequacy of profits etc., deviate from the policy
servicing and capital conservation for such needs.
parameters and may prune or not recommend dividend.
c) External factors:
h) Multiple classes of shares
The Board may take into account any external factors
while considering recommending dividend, such as: Factors, parameters and payment for dividend to different
class of shares of the Company shall be similar to the policy
o Political, tax or regulatory changes relating to its formulated herein, and subject to the respective rights
business or declaration of dividend attached to each class of shares as per their terms of issue
o Any material changes relating to the operations of and in compliance with applicable regulations or laws.
the Company or the economic and technological
environment impacting the business of the Company B) Disclosures on Materially Significant Related Party
Transactions
o Any significant change in the competitive conditions
affecting the operations of the Company, which The Company does not have any materially significant related party
might require dynamic changes in operations or transactions, which may have potential conflict with the interest
making significant investments. of the Company. Other related party transactions have been
o Any restrictions on payment of dividends by virtue reported at Note No.39 of notes to Financial Statements. The
of any regulation as may be applicable to the Register of Contracts, containing transactions in which Directors
Company at the time of declaration of dividend. are interested, is placed before the Board regularly.
d) Expectations of stakeholders/ various classes of The Company has formulated a policy on materiality of Related
shares: Party Transactions and also on dealing with Related Parties. The
The Board, while deciding recommendation of dividend,
shall also factor the expectations of the stakeholders
48
Statutory Reports
policy is also available on the website of the Company.(https:// Sl. Particulars Number
www.divislabs.com/wp-content/uploads/2018/07/Related-Party- No.
Transactions-Policy-1.pdf) 2 Number of complaints disposed of during 1
the financial year
C) Cases of Non-Compliances / Penalties
3 Number of complaints pending as on end of Nil
There has been no instance of non-compliance by the Company financial year
on any matter related to capital markets during the last three years.
I) Fees paid for the services of Auditors
Hence, the question of imposition of penalties or strictures by SEBI
or the Stock Exchanges does not arise. Details of the total fees for all services paid by the Company and its
subsidiaries, on a consolidated basis, to the statutory auditor and
D) Vigil Mechanism
all entities in the network firm/network entity of which the statutory
Information relating to Vigil mechanism has been provided in the auditor is a part, are as follows:
Board’s Report. The Vigil mechanism policy is available on the
(H in lakhs)
website of the Company
For year ended For year ended
Particulars
E) Whistle Blower Policy March 31, 2019 March 31, 2018
As Statutory Auditor 30 26
To strengthen its policy of corporate transparency, the Company For Quarterly Reviews 19 16
has established an empowering mechanism for employees Re-imbursement of 3 1
and accordingly formulated Whistle Blower Policy to provide a expenses
mechanism for directors and employees of the Company to report Total payments to 52 43
instances of unethical behavior, actual or suspected fraud, or auditors
violation of the Code of Ethics and Business Conduct in good
faith to the Vigilance Officer / Chairman of the Audit Committee. 25. The Company has complied with the requirements of the Schedule
This mechanism also provides for adequate safeguards against V Corporate Governance Report sub-paras (2) to (10) of the SEBI
victimization of director(s) / employee(s) who avail the mechanism (Listing Obligations and Disclosure Requirements) Regulations, 2015.
and provides for direct access to the Chairman of the Audit
Committee in exceptional cases. No personnel have been denied 26. Compliance with Mandatory Requirements and
access to the Audit Committee. Adoption of Discretionary Requirements
F) Policy for determining material subsidiaries is disseminated on the The Company has complied with all the mandatory requirements
website of the Company: (https://www.divislabs.com/wp-content/ of the Corporate Governance as stipulated in Schedule V of the
uploads/2018/07/Policy-on-Material-Subsidiary_1.pdf) SEBI Listing Regulations. Certificates from Mr. V. Bhaskara Rao,
Practicing Company Secretary, confirming compliance with the
G) The Company has obtained a certificate from Mr. V. Bhaskara Rao,
conditions of Corporate Governance are annexed.
Practicing Company Secretary that none of the Directors on the
Board of the Company has been debarred or disqualified from Status of adoption of the discretionary requirements pursuant to
being appointed or continuing as Directors of Companies by the Regulation 27(1) of the SEBI Listing Regulations read with Part E of
Board/Ministry of Corporate Affairs or any such statutory authority. Schedule II is as under:
H) Sexual Harassment Shareholder Rights: Half-yearly and other quarterly financial

statements are published in newspapers and uploaded on
In compliance with Sexual Harassment of Women at Workplace
Company’s website;
(Prevention, Prohibition and Redressal) Act, 2013 statement of
complaints for the financial year ended 31 March, 2019: Audit Qualifications: The Company already has a regime of un-
qualified financial statements. Auditors have raised no qualification
Sl. Particulars Number on the financial statements.
No.
1 Number of complaints filed during the 1
financial year
49
27. Compliance with Corporate Governance Requirements Specified in Regulation 17 to 27 and Clauses (B)
to (I) of Sub-Regulation (2) of Regulation 46 are as Follows:
Regulation Compliance
Particulars of Regulation
Status (Yes/ No)
17 Board of Directors Yes
18 Audit Committee Yes
19 Nomination and Remuneration Committee Yes
20 Stakeholders Relationship Committee Yes
21 Risk Management Committee Yes
22 Vigil Mechanism Yes
23 Related Party Transactions Yes
24 Corporate Governance requirements with respect to subsidiary of the Company Yes
25 Obligations with respect to Independent Directors Yes
26 Obligations with respect to Directors and Senior Management Yes
27 Other Corporate Governance requirements Yes
46(2)(b) to (i) Website Yes
Subsidiaries
The Company has two foreign subsidiaries. The Audit Committee reviews the financial statements of the subsidiary companies. During the
year, the Board took on record the minutes of the Board meetings of the subsidiary companies.
CEO and CFO Certification
The CMD and CFO of the Company have certified to the Board in relation to reviewing financial statements and other information as required
by Regulation 17(8) of the SEBI Listing Regulations and the certificate is appended.
Code of Ethics and Business Conduct
The Company has adopted a Code of Ethics and Business Conduct for Directors and Senior Management. The code is comprehensive in
nature and applicable to all Directors, Executive as well as Non-Executive and to Senior Management of the Company.
Copy of the said Code is available on the Company’s website, www.divislabs.com. The code has been circulated to all the members of the
Board and Senior Management and the compliance of the same has been affirmed by them. A declaration signed by the Chairman & Managing
Director is as follows:
I hereby confirm that the Company has obtained from all the members of the Board and senior management, affirmation that they have
complied with the code of ethics and business conduct for directors and senior management in respect of the financial year 2018-19.
For and on behalf of the Board
Dr. Murali K. Divi

Hyderabad Chairman & Managing Director
25 May 2019 (DIN: 00005040)
50
Statutory Reports
CERTIFICATION BY CHAIRMAN AND MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER
We, Murali K. Divi, Chairman and Managing Director appointed in terms of the Companies Act, 2013 and Mr. L. Kishore Babu, Chief Financial Officer
to the best of our knowledge and belief, certify that:
a. We have reviewed the financial statements and cash flow statement (standalone and consolidated) for the period ended 31 March, 2019 and
to the best of our knowledge and belief these statements;
i. do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
ii. together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws
and regulations.
b. There are, to the best of our knowledge and belief, no transactions entered into by the company during the period which are fraudulent, illegal
or violative of the company’s code of conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness
of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee,
deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take
to rectify these deficiencies.
d. We have indicated to the auditors and the Audit committee
i. significant changes in internal control over financial reporting during the period;
ii. significant changes in accounting policies during the period and that the same have been disclosed in the notes to the financial statements; and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee
having a significant role in the company’s internal control system over financial reporting.
For Divi’s Laboratories Limited
Dr. Murali K. Divi L Kishore Babu

Hyderabad Chairman & Managing Director Chief Financial Officer
25 May 2019 (DIN: 00005040)
51
CERTIFICATION ON CORPORATE GOVERNANCE
To
The Members of
CIN: L24110TG1990PLC011854
1-72/23(P)/DIVIS/303, Divi Towers
Cyber Hills, Gachibowli
Hyderabad -500 032
We have examined the Compliance of conditions of Corporate Governance by DIVI’S Laboratories Limited (the Company), for the year ended
31 March 2019 as stipulated in Regulations 17 to 27 and clauses (b) to (i) of Regulations 46(2) and para C, D and E of Schedule V of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”)
The Compliance of the conditions of Corporate Governance is the responsibility of the management. This responsibility includes the design,
implementation, and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance
stipulated in Listing Regulations.
Our examination is limited to examining the procedures and implementation thereof, adopted by the company for ensuring the compliance with the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
We have examined the books of account and other relevant records and documents maintained by the company for the purposes of providing
reasonable assurance on the compliance with Corporate Governance requirements by the Company.
Based on our examination of the relevant records and according to the information and explanations provided to us and the representations
provided by the Management, we certify that the company has complied with the conditions of Corporate Governance as stipulated in Regulations
17 to 27 and clauses (b) to (i) of Regulations 46(2) and para C. D and E of Schedule V of the SEBI Listing Regulations.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which
the Management has conducted the affairs of the Company.
For V. Bhaskara Rao & Co.,

Company Secretaries
V. Bhaskara Rao
Place: Hyderabad Proprietor
Date: 25 May 2019 F.C.S.No.5939, C.P.No.4182
52
Statutory Reports
Certificate of Non-Disqualification of Directors
[Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
To,
The Board of Directors
Divi’s Laboratories Limited,
CIN: L24110TG1990PLC011854
1-72/23(P)/DIVIS/303,
Divi Towers Cyber Hills, Gachibowli,
Hyderabad, Telangana-500032
We have examined the relevant registers, records, forms, returns and disclosures (hereinafter referred to as ‘relevant documents’) produced to us
by M/s. Divi’s Laboratories Limited, bearing CIN L24110TG1990PLC011854 and having Registered Office at 1-72/23(P)/ DIVIS/303, Divi Towers,
Cyber Hills, Gachibowli, Hyderabad, Telangana-500032 (hereinafter referred to as ‘the Company’) for the purpose of issuing this Certificate, in
accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10 (i) of the Securities Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
Based on our examination of relevant documents made available to us by the Company and such other verifications carried out by us as deemed
necessary and to the extent possible, in our opinion and to the best of our information and according to the verifications (including Directors
Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company &
its officers, we hereby certify that, for the financial year ending on March 31, 2019, none of the Directors on the Board of the Company as stated
below have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of
India, Ministry of Corporate Affairs, or any such other Statutory Authority:
Sl. DIN
Name of Director
no.
1. Dr. Murali Krishna Prasad Divi 00005040
2. Mr. Nimmagadda Venkata Ramana 00005031
3. Mr. Satchandra Kiran Divi 00006503
4. Mr. Kanteti Venkata Krishna Seshavataram 00060874
5. Mr. Madhusudana Rao Divi 00063843
6. Dr. Gangavarapu Suresh Kumar 00183128
7. Ms. Motaparti Nilima 06388001
8. Mr. Ranga Rao Ravipati 06409742
9. Dr. Rameshbabu Venkata Nimmagadda 07854042
10. Prof. Ganapaty Seru 07872766
11. Prof. Sunaina Singh 08397250
Ensuring that the eligibility of for the appointment/continuity of every Director on the Board is the responsibility of the management of the Company.
Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the
Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
This Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report of the Financial Year ended
31st March, 2019.
For V. Bhaskara Rao & Co.,

Company Secretaries
V. Bhaskara Rao
Date: 25 May 2019 F.C.S.No.5939, C.P.No.4182
53
Board’s Report
To
The Members,
Your Directors have pleasure in presenting the Annual Report of Divi’s Laboratories Limited (the Company or Divi’s) along with the audited financial
statements for the financial year ended March 31, 2019. The consolidated performance of the Company and its subsidiaries has been referred to
wherever required.
Financial Results
Financial performance of the Company for the year ended 31 March 2019 is summarized below:
(J lakhs)
Standalone Consolidated
Particulars
2018-19 2017-18 2018-19 2017-18
Revenue 487966 383723 494626 391278
Other Income 15658 11248 15563 11344
Total Revenues 503624 394971 510189 402622
Expenditure 303070 258660 307442 265107
Profit before depreciation, interest and tax (PBDIT) 200554 136311 202747 137515
Depreciation 16881 14242 16890 14249
Finance Cost 350 133 350 133
Profit before Tax (PBT) 183323 121936 185507 123133
Provision for Tax:
Current Tax 47245 28713 47551 28983
Deferred Tax 2813 6265 2682 6449
Total tax provision 50058 34978 50233 35432
Profit after Tax (PAT) 133265 86958 135274 87701
Other comprehensive Income (net of tax) 105 67 (35) 990
Total Comprehensive Income 133370 87025 135239 88691
Earnings per Share (EPS) Basic & Diluted (H) 50.20 32.76 50.96 33.04
Operations
Operations for the year reflect normalized operations after successful • Tax Provision for the current year amounted to H50058 lakhs as
closure of audits by US-FDA for Company’s Unit-II at Visakhapatnam, against a tax provision of H34978 lakhs for the last year.
Andhra Pradesh during the last year. The Company’s Unit-I at
Choutuppal, Telangana State was also inspected by the US-FDA • Profit after Tax (PAT) before Other Comprehensive Income for the
during May 2018 and was concluded without any observations. year amounted to H133265 lakhs as against a PAT of H86958
lakhs last year.
Standalone
• Earnings Per Share of H2/- each works out to H50.20 for the year
• Total Revenues for the year increased by 28% to H503624 lakhs. as against H32.76 last year.
• Operating profit (PBDIT) for the year grew by 47% to H200554 • Out of the total revenue, 27% came from North America, 46% from
lakhs as against an operating profit of H136311 lakhs last year. Europe, 12% from Asia, 12% from India and 3% from rest of the
World.
• Profit before Tax (PBT) for the year amounted to H183323 lakhs as
against a PBT of H121936 lakhs for the last year.
54
Statutory Reports
Board’s Report
Consolidated standards. The audited consolidated financial statements together with

Auditors Report thereon form part of the Annual report.
Our total revenues on consolidated basis increased by 27% to
H510189 lakhs from H402622 lakhs in the previous year.
Capital Expenditure
The operating profit before depreciation, finance charges and tax
(PBDIT) amounted to H202747 lakhs as against H137515 lakhs in the In order to cater to the increasing opportunities in generic and big
previous year. Profit after Tax, before Other Comprehensive Income, for pharma business, the Company is taking up two brownfield projects
the year accounted to H135274 lakhs as against H87701 lakhs in the with an aggregate investment of H1200 crores:
previous year.
• An SEZ Unit at our Unit-II at Visakhapatnam, named as DCV SEZ
Unit, with an investment of H600 crores. (revised from the estimate
Subsidiaries of H400 crores announced at the last General Meeting).
Our subsidiaries viz., M/s. Divi’s Laboratories (USA) Inc., in USA and • Another SEZ Project with an investment of H600 crores in
M/s. Divi’s Laboratories Europe AG in Switzerland are engaged in the available land at our Unit-I in Bhuvangiri-Yadadri (erstwhile
marketing/distribution of nutraceutical products and to provide a greater Nalgonda) District, Telangana State.
reach to customers within these regions.
Work has already commenced and the Projects are expected to
During the year, the subsidiaries have achieved aggregate turnover of be completed by end of the year 2019-20 barring unforeseen
H35638 lakhs as against H22593 lakhs in the previous year, reflecting circumstances. The Company has also taken up debottlenecking
a growth of 58% for the nutraceutical products in North America and programs at Unit-I as well as Unit-II by investing an aggregate amount of
Europe. H300 crores –which would also create additional capacities for existing
products. In addition, we have also taken up augmentation of waste
Subsidiaries have been having consistent profitable operations for treatment infrastructure at Unit-II at an estimated cost of H150 crores.
the past few years, have cleared accumulated losses and turned into
positive networth. There has been no material change in the nature of
the business of the subsidiaries. Material Changes and Commitments
As per Section 129(3) of the Companies Act, 2013 read with No other material changes and commitments have occurred after the
Companies (Accounts) Rules, 2014, statement containing the salient close of the year till the date of this Report, which affect the financial
features of the financial statement of Company’s subsidiaries in form position of the Company. Further, there is no change in the nature of
AOC-1 is annexed herewith as “Annexure I”. Moreover, pursuant to business of the Company.
provisions of Section 136(1) of the Companies Act, 2013, audited
financial statements of the subsidiary companies are placed on the Dividend
website of the Company at www.divislabs.com. The Consolidated
Financial Statements presented by the Company include the financial Your Directors are pleased to recommend a dividend of H16/- per
results of its subsidiary companies. equity share of H2/- each, i.e., 800% for the financial year ended
31 March 2019, subject to approval of members at the ensuing Annual
Policy for determining Material Subsidiaries, is available on the General Meeting.
Company’s corporate website at:
https://www.divislabs.com/wp-content/uploads/2018/07/Policy-on- The total dividend payout for the current year amounts to H51206 lakhs
Material-Subsidiary_1.pdf Presently, the Company does not have any (inclusive of tax of H8731 lakhs) as against H32004 lakhs in the previous
material subsidiary. year. Dividend payout (including dividend tax) as a percentage of profits
is 38% as compared to 37% in the previous year.
Consolidated Accounts
As stipulated in the SEBI (Listing Obligations and Disclosure Transfer to Reserves

Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and the
The Directors have decided to retain the entire total comprehensive
Companies Act, 2013, the consolidated financial statements have been
income of H133370 lakhs in the Retained Earnings.
prepared by the Company in accordance with the relevant accounting
55
Deposits Management Discussion and Analysis
The Company has not accepted any deposits from public covered by In terms of provisions of Regulation 34(2) of SEBI Listing Regulations
provisions of Section 73 of the Companies Act, 2013. report on Management Discussion & Analysis for the year under review
is provided in a separate section forming part of this Annual Report.
Loans, Guarantees or Investments

Directors’ Responsibility Statement
During the year, the Company has not given any loans or guarantees
covered under the provisions of Section 186 of the Companies Act, As required under Section 134 (5) of the Companies Act, 2013,
2013. Directors of your Company hereby state and confirm that:
The details of investments made by the Company are given in the notes a) the applicable accounting standards have been followed in the
to the financial statements. preparation of the annual accounts;
b) accounting policies selected were applied consistently and the

Related Party Transactions judgements and estimates made are reasonable and prudent so
as to give a true and fair view of the state of affairs of the Company
There are no materially significant related party transactions made
as at the end of the financial year and of the profit of the Company
by the Company with Promoters, Key Managerial Personnel or other
for the period;
designated persons which may have potential conflict with interest of
the Company at large. As a matter of policy, your Company carries out c) proper and sufficient care has been taken for the maintenance of
transactions with related parties on an arms’ length basis. Statement of adequate accounting records in accordance with the provisions
these transactions is given at Note No. 39 of the Notes to Accounts. of the Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
Accordingly, particulars of contracts or arrangements with related
parties referred to in Section 188(1) along with the justification for d) the annual accounts have been prepared on a going concern
entering into such contract or arrangement in Form AOC-2 does not basis;
form part of this report.
e) internal financial controls have been laid down and such controls
are adequate and operating effectively;
Internal Financial Controls
f) proper systems have been laid down to ensure compliance
Information in respect of internal financial controls and their adequacy is
with the provisions of all applicable laws and such systems are
included in the Management Discussion and Analysis, which is a part
adequate and operating effectively.
of the Annual report.
Number of Meetings of Board of Directors

Risk Management
The Board meets at least four times in a year at quarterly intervals and
The Company has an enterprise-wide approach to risk management,
more frequently if deemed necessary, to transact its business. During
which lays emphasis on identifying and managing key operational and
the financial year, the Board has met six times, i.e. on 26 May 2018,
strategic risks. The aim is to avoid or minimise risks that pose a threat to
04 August 2018, 27 October 2018, 02 February 2019, 09 March
Divi’s continued existence and to make improved managerial decisions to
2019 and 28 March 2019.
create value. The Company has been addressing various risks impacting
the Company and the policy and processes of the Company on risk
management is provided in the Management Discussion and Analysis. Directors and Key Managerial Personnel
The Risk Management Committee constituted by the Company Re- Appointment:

constantly evaluates various risks – business, customer concentration,
supplier concentration, regulatory compliances, confidentiality of As per the provisions of the Companies Act, 2013 Mr. Kiran S. Divi and
processes, consistency of cGMP practices, environment, employee Ms. Nilima Motaparti, Whole-time Directors will retire by rotation at the
health and safety etc., monitors risk and deploy appropriate control ensuing 29th Annual General Meeting (AGM) and, being eligible, offer
systems aimed at mitigating such risks to the extent possible. themselves for re-appointment.
56
Statutory Reports
Board’s Report
Members have approved the re-appointment of Dr. G. Suresh Kumar Policy on Directors’ Appointment and Remuneration
and Mr. R. Ranga Rao as Non-executive Independent Directors of
the Company by special resolution passed through postal ballot for a The Policy on appointment and remuneration of Directors, Key
second term of five years with effect from 31 March 2019. Managerial Persons and Senior Management including criteria
for determining qualifications, positive attributes and director’s
Members have approved the continuance of directorship and re- independence as required under Section 178(3) of the Companies Act,
appointment of Mr. K. V. K. Seshavataram as Non-executive Independent 2013 and Regulation 19 read with Schedule II Part D of SEBI Listing
Director of the Company by special resolution passed through postal Regulations has been formulated by the Company:
ballot for a second term of five years with effect from 23 June 2019.
• To identify persons who are qualified to become directors and who
Appointment: may be appointed in senior management in accordance with the
criteria laid down.
Your Board has appointed Prof. Sunaina Singh as an Additional
Independent Director, at its meeting held on 28 March 2019 on the • To ensure a transparent board nomination process with the
recommendation of the Nomination and Remuneration Committee. The diversity of thought, experience, knowledge, perspective and
Board commends her appointment as an Independent Director for your gender in the Board.
approval.
• To determine remuneration based on the Company’s size and
Brief profile of the directors proposed for appointment/ re-appointment financial position and trends and practices on remuneration
is given in the notice convening the 29th AGM for reference of the prevailing in peer companies, in the Pharma industry besides
members. qualifications, skills, capabilities etc.,
• To carry out evaluation of the performance of Directors, as well as

Declaration by Independent Directors Key Managerial and Senior Management Personnel.
The Company has obtained declaration from all independent directors
• To provide them rewards linked directly to their effort, performance,
of the Company under Section 149(7) of the Companies Act, 2013
dedication and achievement relating to the Company’s operations.
confirming that they meet the criteria of independence as provided in
Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI • To retain, motivate and promote talent and to ensure long
Listing Regulations. term sustainability of talented managerial persons and create
competitive advantage.
Board Evaluation Policy on Nomination and Remuneration of Directors, Key / Senior
The Board of Directors carried out an annual evaluation of its own Managerial Personnel may be accessed on the Company’s website at:
performance, of the committees of the Board and of the individual https://www.divislabs.com/wp-content/uploads/2018/07/Nomination-
directors pursuant to the provisions of the Companies Act, 2013 and and-Remuneration-policy18-1.pdf
SEBI Listing Regulations.
Remuneration Details of Directors and KMP
Performance evaluation was carried out on the basis of criteria
evolved, as provided by the Guidance Note on Board Evaluation Particulars required to be furnished under Rule 5(1) of the Companies
issued by Securities and Exchange Board of India, seeking inputs (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
from the directors individually and the committees through a structured as amended are given in “Annexure – II” and forms part of this Report.
questionnaire which provides a valuable feedback for contribution to
the Board, improving board effectiveness, maximising strengths and
Particulars of Employees
highlighting areas for further improvement etc.,
Particulars of employees required to be furnished under Rule 5(2) and
In a separate meeting of the Independent Directors, performance of the
5(3) of the Companies (Appointment and Remuneration of Managerial
non-independent directors and the Board as a whole was evaluated
Personnel) Rules, 2014, as amended are given in “Annexure – III” and
taking into account the views of the non-independent directors and the
forms part of this Report.
same was discussed in the Board Meeting. Performance evaluation
of Independent Directors is done by the entire Board of Directors
(excluding the directors being evaluated).
57
Corporate Social Responsibility or ethics policy. The Policy provides that the Company investigates such
incidents, when reported, in an impartial manner and takes appropriate
The Board of Directors has constituted Corporate Social Responsibility action to ensure that requisite standards of professional and ethical
Committee (CSR Committee) consisting of members viz. Mr. R. Ranga conduct are always upheld. This mechanism also provides for adequate
Rao (Chairman), Dr. Murali K. Divi, Mr. Madhusudana Rao Divi and safeguards against victimization of director(s)/ employee(s) who avail the
Dr. Ramesh B.V. Nimmagadda. mechanism and also provide for direct access to the Chairman of the
Audit Committee in exceptional cases. The Whistle Blower Policy may be
Corporate Social Responsibility Policy (CSR Policy) indicating the
accessed on the Company’s website at:
activities to be undertaken by the Company was adopted by the Board
https://www.divislabs.com/wp-content/uploads/2019/03/Whistle-
on the recommendation of the CSR Committee.
blower-policy.pdf
Report on Corporate Social Responsibility as per Rule 8 of Companies
(Corporate Social Responsibility Policy) Rules, 2014 is prepared and Audit Reports
the same is enclosed as “Annexure – IV” to this Report.
• Report of the Statutory Auditors for the year does not contain
any qualification, reservation or adverse remark or disclaimer or
reporting of any offence or fraud.
Pursuant to the SEBI Listing Regulations, Business Responsibility
• The Secretarial Audit Report does not contain any qualification,
Report (BRR) describing the initiatives taken by the Company is
reservation or adverse remark or disclaimer.
enclosed as part of this Report.
Statutory Auditors
Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings & Outgo At the Annual General Meeting held on 25 September 2017, M/s
Price Waterhouse Chartered Accountants LLP (Firm Registration No.
Particulars required under Section 134 (3) (m) of the Companies Act,
012754N/ N500016) were appointed as Statutory Auditors of the
2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is
Company to hold office for five consecutive years till the conclusion of the
given in the “Annexure – V” to this report.
32nd Annual General Meeting of the Company in the calendar year 2022
(subject to ratification by the members at each Annual General Meeting).
In terms of first proviso to Section 139 of the Companies Act, 2013, the
The report on Corporate Governance as per Regulation 34(3) read appointment of the auditors shall be placed for ratification at every Annual
with Schedule V of the SEBI Listing Regulations is included as a part General Meeting. However, Companies (Amendment) Act, 2017 omitted
of this Annual Report. The requisite certificate from Mr. V. Bhaskara the first proviso to Section 139 of Companies Act, 2013 that requires
Rao, Practicing Company Secretary confirming the compliance with ratification of appointment of auditor at every annual general meeting.
the conditions of Corporate Governance is attached to the report on
Corporate Governance. Accordingly, M/s. Price Waterhouse Chartered Accountants LLP will
continue as the Statutory Auditors of the Company till conclusion of
32nd Annual General Meeting of the Company.
Audit Committee
The details pertaining to the role, objective and composition of the Audit Secretarial Audit
Committee are included in the Corporate Governance Report which is
part of the Annual Report for the year. Pursuant to provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board of Directors of the Company has
Vigil Mechanism appointed Mr. V. Bhaskara Rao, Practicing Company Secretary (PCS
The Company has established a vigil mechanism and formulated a Registration No. 4182) as the Secretarial Auditor of the Company
Whistle Blower Policy to provide mechanism for directors and employees to conduct the Secretarial audit for the financial year 2018-19. The
of the Company to report their concerns about any unethical behavior, Secretarial Audit report for the financial year 2018-19 is annexed
actual or suspected fraud or violation of the Company’s code of conduct herewith as “Annexure VI”.
58
Statutory Reports
Board’s Report
Cost Audit • Company has complied with provisions relating to the constitution
of Internal Complaints Committee under the Sexual Harassment of
Pursuant to the Section 148 of the Act and Rule 3 of the Companies Women at Workplace (Prevention, Prohibition and Redressal) Act,
(Cost Records and Audit) Rules, 2014 as amended, the Company 2013 and rules made thereunder.
maintains cost records in its books of account. As per Rule 4 of the
said rules, the requirement for cost audit is not applicable to a company • No cases remain unresolved pursuant to the Sexual Harassment
which is covered under Rule 3, and whose revenue from exports, in of Women at Work Place (Prevention, Prohibition and Redressal)
foreign exchange, exceeds seventy five per cent of its total revenue or Act, 2013 during the year under review.
which is operating from a special economic zone. However, Company
• As per Regulation 43A of the SEBI Listing Regulations, the Dividend
has voluntarily opted for audit of cost records and appointed M/s. E.V.S
Distribution Policy is disclosed in the Corporate Governance
& Associates, Cost Accountants as Cost Auditors.
Report and on the website of the Company.
Extract of Annual Return • Directors of your company hereby state and confirm that the
Company has complied with all the applicable Secretarial
An Extract of Annual Return in Form MGT-9 as per the provisions Standards.
of Section 92(3) of the Companies Act, 2013 and Rule 12 of
Companies (Management and Administration) Rules, 2014, is
enclosed as “Annexure VII” to this report and is also available on
Acknowledgements
the website of the Company at https://www.divislabs.com/wp-content/ The Directors thank the customers, vendors, various Government
uploads/2019/07/FROM-NO.-MGT-9.pdf. departments and agencies, investors and its banks for their continuous
support. The Directors also appreciate and value the commitment and
Other Disclosures contribution by its employees at all levels.
• Information on Unclaimed Dividend and transfer to IEPF is provided

in the Corporate Governance Report.
• No company has become or ceased to be its subsidiary, joint
venture or associate company during the year.
Dr. Murali K. Divi
• No significant and material orders were passed by the regulators
Place: Hyderabad Chairman & Managing Director
or courts or tribunals impacting the going concern status and
Date: 25 May 2019 (DIN: 00005040)
Company's operations in future.
59
ANNEXURE – I
FORM AOC-1
STATEMENT PURSUANT TO SECTION 129(3) OF THE COMPANIES ACT, 2013 RELATING TO SUBSIDIARY COMPANIES
J in lakhs
Sl. Particulars Divis Laboratories Divi’s Laboratories
No (USA) Inc. Europe AG.
1 The date since when Subsidiary was acquired 1 February 2006 6 February 2006
2 Reporting period for the Subsidiary 31 March 2019 31 March 2019
3 Reporting Currency and Exchange rate as on the last date of the relevant USD = 69.1713 CHF = 69.56
financial year Balance sheet Balance sheet
USD = 69.9103 for P&L CHF = 70.4459 for P&L
4 Share Capital 87 404
5 Reserves & Surplus (83) (180)
6 Total assets 9046 11634
7 Total liabilities 9046 11634
8 Investments - -
9 Turnover 16282 19356
10 Profit before taxation 2058 963
11 Provision for taxation 594 126
12 Profit after taxation 1464 837
13 Other Comprehensive Income after tax for the year (102) (18)
14 Total Comprehensive Income for the year 1362 819
15 Proposed Dividend - -
16 % of shareholding 100% 100%
Dr. Murali K. Divi

Date: 25 May 2019 (DIN: 00005040)
60
Statutory Reports
Board’s Report
ANNEXURE – II
INFORMATION PURSUANT TO RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF
MANAGERIAL PERSONNEL) RULES, 2014, AS AMENDED
(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year, the percentage
increase in remuneration of each Director, Chief Financial Officer and Company Secretary are given below:
Name of Director / KMP and Remuneration of Ratio of remuneration of % increase/
Designation Director/ KMP for each Director to median (decrease) in
Sl.
financial year remuneration of employees of remuneration
No
(J in lakhs) the Company for the financial in the financial
year year
1 Dr. Murali K. Divi 5881 1 : 0.0006838 46.29%
Chairman & Managing Director
2 Mr. N.V. Ramana 2990 1 : 0.0013450 45.23%
Executive Director
3 Mr. Madhusudana Rao Divi 99 1 : 0.0404702 0.00%
Whole-time Director
4 Mr. Kiran S. Divi 2023 1 : 0.0019875 44.27%
Whole-time Director
5 Ms. Nilima Motaparti 68 1 : 0.0592816 34.25%
Whole-time Director
6 Dr. G. Suresh Kumar * 12 1 : 0.3350935 14.01%
7 Mr. R. Ranga Rao * 13 1 : 0.3093171 23.52%
8 Mr. K.V.K. Seshavataram * 10 1 : 0.4021122 24.69%
9 Dr. Ramesh B.V. Nimmagadda * 9 1 : 0.4467913 63.49%
10 Dr. S. Ganapaty* 7 1 : 0.5744460 133.33%
12 Mr. L. Kishore Babu 228 N.A. 8.66%
Chief Financial Officer
13 Mrs. P. V. Lakshmi Rajani 32 N.A. 41.06%
Company Secretary
* Independent Directors were paid sitting fees for attending the Meetings
(ii) The percentage increase in the median remuneration of employees in the financial year was 3.96%.
(iii) As on 31 March 2019, the Company has 4407 permanent employees on the rolls of Company as defined under rule 5(1) of the Companies Act 2013.
(iv) Average percentile increase already made in the salaries of employees other than the managerial personnel in the financial year was 18%
whereas the increase in the managerial remuneration was 44%.
(v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
Dr. Murali K. Divi

Date: 25 May 2019 (DIN: 00005040)
61
ANNEXURE – III
INFORMATION PURSUANT TO RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION
OF MANAGERIAL PERSONNEL) RULES, 2014
Age Qualifications Designation Date of Experi- Gross Last employment

(yrs) commence- ence remune-
Name
ment of (yrs) ration 1
employment (J lakhs)
Dr. Murali K. Divi 68 M. Pharm. Chairman & 12-Oct-90 44 5881 Managing Director,
Ph. D. Managing Director Cheminor Drugs Ltd.
Ramana. N.V. 61 B.Sc. Executive Director 26-Dec-94 34 2990 President, Enmark Exim
(Chem) Services Pvt. Ltd
Kiran S. Divi 43 M. Pharm. Whole-time Director 10-Aug-01 18 2023 --
Devendra Rao. S. 57 M. Sc. General Manager 10-Feb-95 36 184 Senior Manager (Prod),
Natco Laboratories Ltd.
Hemanth Kumar. 59 M. Sc. General Manager 1-Nov-94 36 184 Sr. Prodn. Manager, Sumitra
G. Pharma Ltd.,
Kishore Babu. L. 67 B.Com, FCMA Chief Financial Officer 20-Nov-94 46 228 Finance Manager, Nagarjuna
Fert & Chem Ltd.,
Madhu Babu. D 58 Masters in Vice President 2-May-16 32 114 Senior Vice President,
Planning IL&FS Cluster Development
Initiative Limited
Prasad. Y.T.S. 51 B.E. General Manager 1-Nov-90 31 184 Engineer (Devpt), Cheminor
Drugs Ltd.,
Ramakrishna. S. 57 M. Sc. General Manager 15-Feb-95 36 184 General Manager (Works),
Vera Laboratories Ltd.
Ramana. L.V 49 M. Sc. General Manager 12-Aug-91 27 138 --
Ramesh Babu. L. 63 M.Com, MBA, Vice President 20-May-09 30 167 Group Captain, Indian Air
LLB (Procurement) & CIO Force
Ramesh Babu. M. 53 B. Sc. General Manager 1-Nov-90 33 184 R&D Incharge, Cheminor
Technical Operations Drugs Ltd.,
Satya Prakash Divi 42 MS (CIS), MBA Vice President (Sales 1-Mar-13 17 228 VP, Marketing & IT, EF
& Marketing) International Academy,
Switzerland
Srinivasa Rao. P 54 M. Pharm General Manager 1-Nov-90 31 184 Sr. Chemist, Cheminor
Technical Operations Drugs Ltd.
Notes:
1) Remuneration includes salary, allowances, company contribution to provident fund, Commission and benefits.
2) All the above appointments are contractual.
3) Dr Murali K Divi, Chairman and Managing Director and Mr. Madhusudana Rao Divi, Whole-time Director are related to each other.
4) Dr Murali K Divi, Chairman and Managing Director and Mr. Kiran S Divi, Whole-time Director are related to each other.
5) Mr. L. Ramesh Babu, Vice President (Procurement) and Chief Information Officer is related Mr. L. Kishore Babu, Chief Financial Officer.
6) No other employee mentioned above is related to any Director of the Company in terms of Section 2 of the Companies Act, 2013.
Dr. Murali K. Divi

Date: 25 May 2019 (DIN: 00005040)
62
Statutory Reports
Board’s Report
ANNEXURE – IV
REPORT ON CSR ACTIVITIES UNDERTAKEN DURING THE YEAR
1. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the
web-link to the CSR policy and projects or programs.
Divi’s strongly believe that Industrial Growth must contribute to the upliftment of the society around. Hence, the main focus of CSR is communities
or villages around the manufacturing sites.
The objective of Divi’s CSR Policy is:
• To make sure the business remains sustainable and continues to contribute to the welfare of all stakeholders.
• To take up programmes that benefit the neighboring communities in enhancing quality of life and economic well-being of the local
populace.
• To facilitate a holistic approach based for a sustainable improvement in the social, economic and environmental situation of the needy and
underserved.
• Also embedded in this objective is support to the marginalised cross section of the society by providing opportunities to improve their
quality of life.
The CSR projects undertaken are within the broad framework of Schedule VII of the Companies Act, 2013. Details of the CSR policy and
projects or programmes undertaken by the Company are available on the website of the Company: Web link: https://www.divislabs.com/wp-
content/uploads/2018/07/Divis-CSR-Policy-1.pdf
2. Composition of the CSR Committee:
Please refer to the Corporate Governance Report for the composition of CSR Committee.
3. Average net profit of the company for last three financial years (H in lakhs) 141209
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above) (H in lakhs) 2824
5. Details of CSR spent during the financial year:
(a) Total amount to be spent for the financial year (H in lakhs) 2824
(b) Amount unspent Nil
(c) Manner in which the amount spent during the financial year
Details of Corporate Social Responsibility activities under taken and manner in which the amount has been spent during the Year
2018-19:
(1) (2) (3) (4) (5) (6) (7) (8)

Sl. CSR project Sector in Projects or Amount Amount spent on the Cumulative Amount spent:
No or activity identified which the programs outlay projects or programs expenditure Direct or
project is (1) Local area or (budget) Sub heads: upto the through
covered other Project or (1) Direct expenditure reporting implementing
(2) Specify the program on projects or period agency
State and district wise (J in programs (J in lakhs)
where projects lakhs) (2) Overheads
or programs was (*) (J in lakhs)
undertaken
(1) Direct Expenditure
1. Promoting education Promoting 1200 1205 1205
Education
2. Public Health Promoting 80 52 52
health care
63
(1) (2) (3) (4) (5) (6) (7) (8)

Sl. CSR project Sector in Projects or Amount Amount spent on the Cumulative Amount spent:
No or activity identified which the programs outlay projects or programs expenditure Direct or
project is (1) Local area or (budget) Sub heads: upto the through
covered other Project or (1) Direct expenditure reporting implementing
(2) Specify the program on projects or period agency
State and district wise (J in programs (J in lakhs)
where projects lakhs) (2) Overheads
or programs was (*) (J in lakhs)
undertaken
3. Village Development Rural Local 1400 1279 1279
development
4. Women Welfare Empowering 10 9 9
& Economic Women
Empowerment
5. Support to differently State of Telangana 20 16 16
abled
6. Animal Welfare & Dairy Animal State of Andhra 10 4 4
Development Welfare Pradesh
7. Drinking water Safe Drinking 140 145 145
schemes Water
8. Environmental Environment 100 71 71 Direct
Sustainability Sustainability
9. Promotion of Rural Promotion of 10 9 9
Sports Rural Sports
10. Swachh Bharat Swachh 10 6 6
Bharat
11. Livelihood Livelihood 5 1 1
Enhancement Enhancement
program
(2) Overheads
Administrative Expenses & Salaries 50 40 40
Total 3035 2837 2837
6. Responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives
and Policy of the Company
We hereby undertake that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
Dr. Murali K. Divi R. Ranga Rao

Chairman and Managing Director Chairman, CSR Committee
(DIN: 00005040) (DIN: 06409742)
Place: Hyderabad
Date: 25 May 2019
64
Statutory Reports
Board’s Report
ANNEXURE - V
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts)
Rules, 2014.
A. Conservation of Energy
(i) Steps taken or impact on conservation of energy

Energy conservation refers to reducing energy consumption through optimal energy utilisation technologies, enhancing energy availability,
resource efficiency as also use of renewable energy.
A dedicated energy management team focuses on energy management and constantly reviews the progress made. It has implemented
a number of energy conservation initiatives. Some of them are:
• Replacing brine circulation to chilled water system by modifying the utility system
• Improved water conservation utilizing condensate/purified water
• Reduction of time cycles by optimizing processes
• Installed heat recovery exchangers for energy recovery
• Provided variable frequency drives and eliminated booster pumps for brine circulation
• Replaced the HPSV bulbs with high efficiency LED bulbs
(ii) Steps taken by the company for utilising alternate sources of energy
• Alternative heating through solar panels
• Usage of Steam in cooking instead of LPG for efficient energy consumption
• Effluent evaporation using Solar Evaporation system
• Solar street lighting/ solar fencing
(iii) The capital investment on energy conservation equipment is H641 lakhs
B. Technology Absorption
1. Efforts in brief, made towards technology absorption The Company has its own R&D Centres which develop technologies
and processes for Active Pharmaceutical Ingredients and drug
intermediates and these technologies are implemented at the
Company’s manufacturing facilities.
2. Benefits derived as a result of the above efforts The Company constantly reviews, optimizes and improves its
processes for its product range. These efforts have resulted in lower
cost of production, achieve consistent exports and be competitive
in the global market. The process upgradations also brought about
improvement in green chemistry by reducing reagents, minimize
wastes and increasing recoveries.
3. Information regarding import of technology during the last three There is no import of technology.
years.
4. Expenditure incurred on research and development
J in lakhs
Particulars 2018-19 2017-18
Capital 305 1134
Recurring 3489 3177
Total 3794 4312
Total R&D Expenditure as a percentage of Sales Revenue 0.78% 1.12%
65
C. Foreign Exchange Earnings and Outgo
J in lakhs
Particulars 2018-19 2017-18
Foreign Exchange earnings 412376 323590
Foreign Exchange outgo:
- CIF Value of Imports 121868 84852
- Expenditure in Foreign Currency 2183 5571
Net Foreign Exchange Earning (NFE) 288325 233167
NFE / Earnings % 70% 72%
Dr. Murali K. Divi

Date: 25 May 2019 (DIN: 00005040)
66
Statutory Reports
Board’s Report
ANNEXURE - VI
FORM NO. MR-3
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2019
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
SECRETARIAL AUDIT REPORT

To, Acquisition of Shares and Takeovers) Regulations, 2011;
The Members of
Divi’s Laboratories Limited b. The SEBI (Listing Obligations and Disclosure Requirements)
CIN: L24110TG1990PLC011854 Regulations, 2015 ;
1-72/23(P)/DIVIS/303, Divi Towers,
c. The Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015;
Hyderabad -500032.
d. The Securities and Exchange Board of India (Issue of Capital
We have conducted the Secretarial Audit of the compliance of applicable
and Disclosure Requirements) Regulations, 2018*;
statutory provisions and the adherence to good corporate practices by
Divi’s Laboratories Limited (herein after called the Company). Secretarial e. The Securities and Exchange Board of India (Employee Stock
Audit was conducted in a manner that provided us a reasonable basis Option Scheme and Employee Stock Purchase Scheme)
for evaluating the corporate conducts/statutory compliances and Guidelines, 1999 and the Securities and Exchange Board of
expressing our opinion thereon. India (Share Based Employee Benefits) Regulations, 2014*;
Based on our verification of the Company’s books, papers, minute f. The Securities and Exchange Board of India (Issue and Listing
books, forms and returns filed and other records maintained by the of Debt Securities) Regulations, 2008 *;
Company and also the information provided by the Company, its
officers, agents and authorized representatives during the conduct of g. The Securities and Exchange Board of India (Registrars to
secretarial audit. We hereby report that in our opinion, the Company an Issue and Share Transfer Agents) Regulations, 1993
has, during the audit period covering the financial year ended on regarding the Companies Act and dealing with client;
31.03.2019 complied with the statutory provisions listed hereunder and
h. The Securities and Exchange Board of India (Delisting of
also that the Company has proper Board-processes and compliance-
Equity Shares) Regulations, 2009 *; and
mechanism in place to the extent, in the manner and subject to the
reporting made hereinafter: i. The Securities and Exchange Board of India (Buyback of
Securities) Regulations, 2018*;
We have examined the books, papers, minute books, forms and
returns filed and other records maintained by Divi’s Laboratories Limited * Not applicable to the Company during the Audit period
(“the Company”) for the financial year ended on 31.03.2019, according
to the provisions of: (vi) Other applicable Acts
(i) The Companies Act, 2013 (the Act) and the rules made there (a) Factories Act, 1948
under; (b) Industrial Disputes Act,1947
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the (c) The Payment of Wages Act, 1936
rules made there under;
(d) The Minimum Wages Act,1948
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws
(e) Employees Provident Funds and Miscellaneous Provisions
framed there under;
Act, 1952
(iv) Foreign Exchange Management Act, 1999 and the rules and
(f) The Payment of Bonus Act, 1965
regulations made there under to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial (g) The Payment of Gratuity Act, 1972
Borrowings; (h) The Contract Labour (Regulation & Abolition) Act, 1970
(v) The following Regulations and Guidelines prescribed under the (i) The Maternity Benefit Act,1961
Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- viz (j) The Child Labour (Prohibition & Regulation) Act, 1986
a. The Securities and Exchange Board of India (Substantial (k) The Industrial Employment (Standing Order) Act, 1946
67
(l) The Employee Compensation Act, 1923 We have also examined compliance with the applicable clauses of the
(m) The Apprentices Act, 1961 following:
(n) Equal Remuneration Act, 1976 (i) Secretarial Standards issued by The Institute of Company
(o) The Employment Exchange (Compulsory Notification of Secretaries of India
Vacancies) Act, 1956 (ii) The Listing Agreements entered into by the Company with Stock
(p) Customs Act, 1962 Exchanges and Securities and Exchange Board of India (Listing
(q) Central Excise Act, 1944 Obligations and Disclosure Requirements) Regulations, 2015;
(r) Foreign Exchange Management Act, 1999 We further report that the Board of Directors of the Company has duly
(s) Foreign Trade (Development and Regulation) Act, 1992 constituted with proper balance of Executive Directors, Non-Executive
(t) Shops and Establishment Act, 1988 Directors and Independent Directors. The changes in the composition
of the Board of Directors that took place during the period under review
(u) The Water (Prevention and control of pollution) Act 1974, The
were carried out in compliance with the provisions of the Act.
Air (Prevention and control of pollution) Act 1981 and The
Environment Protection Act, 1986 and rules made thereunder Adequate notice is given to all directors to schedule the Board
(v) Public Liability Insurance Act, 1991 Meetings, agenda and detailed notes on agenda were sent at least
(w) Explosive Act, 1884 seven days in advance and a system exists for seeking and obtaining
further information and clarifications on the agenda items before the
(x) Indian Boilers Act, 1923
meeting and for meaningful participation at the meeting.
(y) The Patents Act, 1970
(z) Biological Diversity Act, 2002 Majority decisions are carried out unanimously and there were no
dissenting members during the year under review.
(aa) Food Safety and Standards Act, 2006
(bb) Special Economic Zones Act, 2005 We further report that there are adequate systems and processes
(cc) Drug and Cosmetics Act, 1940 in the Company commensurate with the size and operations of the
Company to monitor and ensure compliance with applicable laws,
(dd) Narcotic Drugs and Psychotropic Substances Act, 1985
rules, regulations and guidelines.
(ee) Employee’s State Insurance Act, 1948
(ff) Andhra Pradesh Factories and Establishment (National, We further report that, the compliance by the Company of applicable
Festival and Other Holidays) Act, 1974 financial laws like direct and indirect tax laws and maintenance of
financial records and books of accounts has not been reviewed in this
(gg) The Sexual Harassment of Women at Work Place (Prevention,
audit since the same have been subject to review by statutory financial
Prohibition and Redressal) Act, 2013
audit and other designated professionals.
(hh) The Andhra Pradesh Labour Welfare Fund Act, 1987
(ii) Conservation of Foreign Exchange and Prevention of We further report that, as informed, the Company has responded
Smuggling Act, 1974 appropriately to notices/queries received from various statutory /
regulatory authorities including initiating actions for corrective measures,
We have relied on the representations made by the Company, its wherever found necessary.
officers and reports of Internal Auditors for systems and mechanism
V.Bhaskara Rao and Co
framed by the Company for compliances under other acts, Laws and
Company Secretaries
regulations applicable to the Company as mentioned above.
V.Bhaskara Rao
Date: 25 May 2019 FCS No.5939, CP No.4182
68
Statutory Reports
Board’s Report
‘ANNEXURE A’
To,
The Members of
CIN: L24110TG1990PLC011854
1-72/23(P)/DIVIS/303, Divi Towers,
Hyderabad -500032.
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these
secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the
contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We
believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of
events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management.
Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the
management has conducted the affairs of the Company
V.Bhaskara Rao and Co

Company Secretaries
V.Bhaskara Rao
Date: 25 May 2019 FCS No.5939, CP No.4182
69
ANNEXURE VII
FORM NO. MGT-9
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31 March 2019
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies
(Management and Administration ) Rules, 2014]
I. Registration and Other Details:
i) CIN L24110TG1990PLC011854
ii) Registration Date 12-10-1990
iii) Name of the Company DIVI'S LABORATORIES LIMITED
iv) Category / Sub Category of the Company Public Company/ Limited by shares
v) Address of the Registered Office and Contact Details 1-72/23(P)/DIVIS/303, Divi Towers
Hyderabad - 500 032
Telangana, India
Tel: 040-23786300 Fax: 040-23786460
E-mail: mail@divislabs.com
vi) Whether Listed Company Yes/ No YES
vii) Name, Adrress & Contact details of Registrar and Transfer Agent KARVY FINTECH PVT. LTD
Karvy Selenium Tower B, Plot No. 31& 32
Gachibowli, Financial District
Nanakramguda, Hyderabad - 500 032
Tel: 040-67161526
E-mail: nageswara.raop@karvy.com
II. Principal Business Activities of the Company

All the business activities conributing 10% or more of the total turnover of the Company:
SI No. NIC code of the % to total

Name and description of main products / services Product / Service turnover of the
Company
1 Naproxen 29183090 18%
III. Particulars of Holding, Subsidiaries and Associate Companies
SI No. CIN/ Holding / % of shares Applicable

Name and address of the Company GLN Subsidiary / held Section
Associate
1 Divis Laboratories (USA) Inc., NA Subsidiary 100 2(87)
325 Columbia Turnpike
Suite 305, Florham Park,
New Jersy 07932, USA
2 Divi's Laboratories Europe AG NA Subsidiary 100 2(87)
Solothurnerstrasse 15
CH- Basel, Switzerland
70
Statutory Reports
Board’s Report
IV. Share Holding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)
i) Category-wise Share Holding
No. of Shares held at the beginning of the No. of Shares held at the end of the year %
Category of year change
Shareholders Demat Physical Total % of Total Demat Physical Total % of Total during
shares shares the year
A PROMOTERS
(1) Indian
(a) Individuals / Hindu 130181232 0 130181232 49.04 130069360 0 130069360 49.00 -0.04
Undivided Family
(b) Central Government 0 0 0 0.00 0 0 0 0.00 0.00
(c) State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00
(d) Bodies Corporate 8000000 0 8000000 3.01 8000000 0 8000000 3.01 0.00
(e) Banks / Financial 0 0 0 0.00 0 0 0 0.00 0.00
Institutions
(f) Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-total A(1) : 138181232 0 138181232 52.05 138069360 0 138069360 52.01 -0.04
(2) Foreign
(a) NRIs - Individuals 0 0 0 0.00 0 0 0 0.00 0.00
(b) Other - Individuals 0 0 0 0.00 0 0 0 0.00 0.00
(c) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00
(d) Banks / FI 0 0 0 0.00 0 0 0 0.00 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00 0.00
0.00
Sub-total A(2) : 0 0 0 0.00 0 0 0 0.00 0.00
0.00
Total Shareholding of 138181232 0 138181232 52.05 138069360 0 138069360 52.01 -0.04
Promoter A=A(1)+A(2):
B Public Shareholding
(1) Institutions
(a) Mutual Funds / UTI 41025312 0 41025312 15.45 36885049 0 36885049 13.89 -1.56
(b) Banks / Financial 838261 0 838261 0.32 867426 0 867426 0.33 0.01
Institutions
(c) Central Government / 0 0 0 0.00 0 0 0 0.00 0.00
(d) State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00
(e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00
(f) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00
(g) FIIs/ FPIs 48862026 0 48862026 18.41 56301726 0 56301726 21.21 2.80
(h) Foreign Venture Capital 0 0 0 0.00 0 0 0 0.00 0.00
Investors
(i) Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-total B(1) : 90725599 0 90725599 34.18 94054201 0 94054201 35.43 1.25
(2) Non-institutions
(a) Bodies Corporate
i) Indian 10997986 0 10997986 4.14 9580167 0 9580167 3.61 -0.53
ii) Overseas 0 0 0 0.00 0 0 0 0.00 0.00
(b) Individuals 0.00
i) Individual 19261085 400103 19661188 7.41 17400271 347486 17747757 6.69 -0.72
shareholders holding
nominal share capital
up to H2 lakh
71
No. of Shares held at the beginning of the No. of Shares held at the end of the year %
Category of year change
Shareholders Demat Physical Total % of Total Demat Physical Total % of Total during
shares shares the year
ii) Individual 2354941 350350 2705291 1.02 2201732 350350 2552082 0.96 -0.06
shareholders holding
nominal share capital
in excess of H2 lakh
(c) Others -
i) Non Resident Indians 1579752 0 1579752 0.60 1405037 0 1405037 0.53 -0.07
ii) Trusts 662643 0 662643 0.25 934582 0 934582 0.35 0.10
iii) Clearing Members 349352 0 349352 0.13 1100194 0 1100194 0.41 0.28
iv) NBFcs Registered 48086 0 48086 0.02 11101 0 11101 0.00 -0.01
with RBI
v) Alternative Investment 554069 0 554069 0.21 0 0 0 0.00 -0.21
Fund
vi) IEPF 3382 0 3382 0.00 14099 0 14099 0.01 0.00
Sub-total B(2) : 35811296 750453 36561749 13.77 32647183 697836 33345019 12.56 -1.21
0.00
Total Public 126536895 750453 127287348 47.95 126701384 697836 127399220 47.99 0.04
Shareholding
B=B(1)+B(2) :
C Shares held by Custodian 0 0 0 0 0 0 0 0 0.00
for GDRs & ADRs
GRAND TOTAL: 264718127 750453 265468580 100 264770744 697836 265468580 100 -
[A+B+C]
ii) Shareholding of Promoters
SI No. Shareholding at the beginning of the Shareholding at the end of the year % change in
year (As on 01-04-2018) (As on 31-03-2019) shareholding
No. of % of % of Shares No. of % of % of Shares during the
Shareholder's Name Shares total Pledged / Shares total Pledged / year
Shares encumbered Shares encumbered
of the to total shares of the to total shares
Company Company
1 NILIMA MOTAPARTI 54000000 20.34 0.00 54000000 20.34 0.00 0.00
2 DIVI SATCHANDRA KIRAN 46000000 17.33 0.00 54000000 20.34 0.00 3.01
3 MURALI KRISHNA PRASAD DIVI 15567000 5.86 0.00 7567000 2.85 0.00 -3.01
4 DIVI SWARNA LATHA 14000000 5.27 0.00 14000000 5.27 0.00 0.00
5 DIVI MADHUSUDANA RAO 584632 0.22 0.00 472760 0.18 0.00 -0.04
6 DIVI BABU RAJENDRA PRASAD 26600 0.01 0.00 26600 0.01 0.00 0.00
7 RADHAKRISHNA RAO DIVI 3000 0.00 0.00 3000 0.00 0.00 0.00
8 DIVIS BIOTECH PRIVATE LIMITED 8000000 3.01 0.00 8000000 3.01 0.00 0.00
TOTAL 138181232 52.05 138069360 52.01 -0.04
72
Statutory Reports
Board’s Report
iii) Change in Promoters’ Shareholding
SI No. Shareholding at the beginning of the Cumulative Shareholding during the

year (As on 01-04-2018) year (01-04-2018 to 31-03-2019)
Name
No. of Shares % of total Shares No. of Shares % of total Shares
of the company of the company
1 At the beginning of the year 138181232 52.05
2 Date wise Increase/ Decrease in promoters -111872 -0.04 138069360 52.01
shareholding during the year *
3 At the end of the year 138069360 52.01
*Details of inter se transfer within promoters and decrease in the promoters’ shareholding during the year:
SI No. Shareholding at the Date Increase/ Reason Cumulative Shareholding

beginning of the year Decrease in during the year (01-04-
(As on 01-04-2018) shareholding 2018 to 31-03-2019)
Name
No. of % of total No. of % of total
Shares Shares of the Shares Shares of the
Company Company
A Promoters
1 MURALI KRISHNA PRASAD DIVI
At the beginning of the year 15567000 5.86 1-Apr-18
Date wise increase/Decrease 31-Oct-18 8000000 Disposal- 7567000 2.85
during the year Off Market
Transfer-gift
At the end of the year 31-Mar-19 7567000 2.85
2 DIVI SATCHANDRA KIRAN
Date wise increase/Decrease 31-Oct-18 8000000 Acquisition- 54000000 20.34
during the year Off Market
Transfer-gift
3 MADHUSUDANA RAO DIVI
Date wise increase/Decrease 10-Apr-18 5626 Sale 579006 0.22
during the year
13-Apr-18 4374 Sale 574632 0.22
16-Apr-18 10000 Sale 564632 0.21
18-Apr-18 13200 Sale 551432 0.21
20-Apr-18 1800 Sale 549632 0.21
24-Apr-18 9561 Sale 540071 0.20
27-Apr-18 5439 Sale 534632 0.20
30-Apr-18 5000 Sale 529632 0.20
11-Jul-18 10000 Sale 519632 0.20
24-Aug-18 7654 Sale 511978 0.19
27-Aug-18 2500 Sale 509478 0.19
2-Nov-18 3000 Sale 506478 0.19
9-Nov-18 12000 Sale 494478 0.19
12-Nov-18 7000 Sale 487478 0.18
16-Nov-18 5000 Sale 482478 0.18
19-Nov-18 1000 Sale 481478 0.18
22-Nov-18 3718 Sale 477760 0.18
8-Feb-19 4000 Sale 473760 0.18
15-Mar-19 1000 Sale 472760 0.18
73
iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
SI No. Shareholding at the beginning Cumulative Shareholding at the

of the year 01-04-2018 end of the year 31-03-2019
Name No. of Shares % of total No. of Shares % of total
Shares of the Shares of the
Company Company
1 SBI MUTUAL FUND 12252813 4.62 12061718 4.54
2 RELIANCE CAPITAL TRUSTEE COMPANY LIMITED 13425419 5.06 7511601 2.83
3 GOVERNMENT PENSION FUND GLOBAL 4546265 1.71 4601104 1.73
4 AXIS MUTUAL FUND TRUSTEE LIMITED 2910663 1.10 4111031 1.55
5 PINEBRIDGE INVESTMENTS GF MAURITIUS LIMITED 3060772 1.15 3060772 1.15
6 MIRAE ASSET EQUITY SAVINGS FUND** 0 0.00 2346593 0.88
7 KOTAK FUNDS** 1525054 0.57 2342393 0.88
8 HDFC TRUSTEE CO LTD 2311900 0.87 2263903 0.85
9 BARON EMERGING MARKETS FUND 2769049 1.04 2107356 0.79
10 M3 INVESTMENT PRIVATE LIMITED** 2040700 0.77 2040700 0.77
11 L AND T MUTUAL FUND TRUSTEE LTD* 3342596 1.26 1890000 0.71
12 PINEBRIDGE GLOBAL FUNDS - PINEBRIDGE INDIA 3227059 1.22 1263883 0.48
EQUITY*
13 DSP BLACKROCK TAX SAVER FUND* 3107855 1.17 1712224 0.64
Note: The date-wise increase/ decrease in the shareholding of the top 10 shareholders is available on our website
*Ceased to be in the list of Top 10 shareholders as on 31-03-2019. The same is reflected above since the shareholder was one of the Top 10 shareholders as on 01-04-2018.
**Not in the list of Top 10 shareholders as on 01-04-2018. The same is reflected above since the shareholder was one of the Top 10 shareholders as on 31-03-2019.
The above information is based on the weekly beneficiary position received from Depositories.
v) Shareholding of Directors and Key Managerial Personnel:
SI No. Shareholding at the Cumulative Shareholding

beginning of the year during the year (01-04-
(As on 01-04-2018) 2018 to 31-03-2019)
Name
Company Company
A DIRECTORS
1 MURALI KRISHNA PRASAD DIVI
Chairman and Managing Director
At the beginning of the year 15567000 5.86
31-10-2018- Disposal-Off Market Transfer (gift) 8000000 3.01 7567000 2.85
At the end of the year 7567000 2.85
2 N. V. RAMANA
Executive Director
3 MADHUSUDANA RAO DIVI
Whole-time Director
10-04-2018- Sale 5626 0.00 579006 0.22
13-04-2018- Sale 4374 0.00 574632 0.22
16-04-2018- Sale 10000 0.00 564632 0.21
18-04-2018-Sale 13200 0.00 551432 0.21
20-04-2018- Sale 1800 0.00 549632 0.21
74
Statutory Reports
Board’s Report
SI No. Shareholding at the Cumulative Shareholding

beginning of the year during the year (01-04-
(As on 01-04-2018) 2018 to 31-03-2019)
Name
Company Company
24-04-2018-Sale 9561 0.00 540071 0.20
27-04-2018- Sale 5439 0.00 534632 0.20
30-04-2018-Sale 5000 0.00 529632 0.20
11-07-2018-Sale 10000 0.00 519632 0.20
24-08-2018-Sale 7654 0.00 511978 0.19
27-08-2018-Sale 2500 0.00 509478 0.19
02-11-2018-Sale 3000 0.00 506478 0.19
09-11-2018-Sale 12000 0.00 494478 0.19
12-11-2018-Sale 7000 0.00 487478 0.18
16-11-2018-Sale 5000 0.00 482478 0.18
19-11-2018-Sale 1000 0.00 481478 0.18
22-11-2018-Sale 3718 0.00 477760 0.18
08-02-2019-Sale 4000 0.00 473760 0.18
15-03-2019-Sale 1000 0.00 472760 0.18
4 SATCHANDRA KIRAN DIVI
Whole-time Director
31-10-2018-Acqusition-Off Market Transfer (gift) 8000000 3.01 54000000 20.34
5 NILIMA MOTAPARTI
Whole-time Director
6 DR. GANGAVARAPU SURESH KUMAR - - - -
7 RANGA RAO RAVIPATI - - - -
8 KANTHETI VENKATA KRISHNA SESHAVATARAM - - - -
9 DR. RAMESH B.V. NIMMAGADDA - - - -
10 DR. GANAPATY SERU - - - -
11 PROF. SUNAINA SINGH* - - - -
Additional Director
B KEY MANAGERIAL PERSONNEL
1 L.KISHORE BABU
Chief Financial Officer
2 P V LAKSHMI RAJANI - - - -
Company Secretary
*The opening holding has been considered from the date on which she was appointed as an Additional Director.
75
V. Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(H in lakhs)
Secured Loans Unsecured Deposits Total
excluding Loans Indebtedness
deposits
Indebtedness at the beginning of the financial year
i) Principal Amount 6311 - - 6311
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 6311 - - 6311
Change in Indebtedness during the financial year
Addition 4249 - - 4249
Reduction - - - -
Net Change 4249 - - 4249
Indebtedness at the end of the financial year
i) Principal Amount 10560 - - 10560
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 10560 - - 10560
VI Remuneration of Directors and Key Managerial Personnel

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(H in lakhs)
SI No. Name of MD/ WTD/ Manager Total
Dr. Murali Mr. N.V. Mr. Mr. Kiran Ms. Nilima Amount
Particulars of Remuneration
K. Divi Ramana Madhusudana S. Divi Motaparti
Rao Divi
1 Gross Salary
(a) Salary as per provisions contained in section 90 84 78 78 48 378
17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 19 15 12 15 14 75
1961
(c) Profits in lieu of salary under section 17(3) - - - - - -
Income-tax Act, 1961
2 Stock Option - - - - - -
3 Sweat Equity - - - - - -
4 Commission
- as % of profit 5761 2881 1921 10563
- others - - - - - -
5 Others - PF 11 10 9 9 6 45
Total (A) 5881 2990 99 2023 68 11061
Ceiling as per the Act H19205 lakhs (being 10% of the net profits of the Company calculated as per
Section 198 of the Companies Act, 2013)
76
Statutory Reports
Board’s Report
B. Remuneration to other Directors:

(H in lakhs)
SI No. Name of Director Total
Dr. G. Mr. R. Mr. K.V.K. Dr. Ramesh Dr. S. Prof. Amount
Particulars of Remuneration
Suresh Ranga Seshavataram B.V. Ganapaty Sunaina
Kumar Rao Nimmagadda Singh*
1 Independent Directors
Fee for attending board / committee meetings 12 13 10 9 7 0 51
Commission - - - - - - -
Others - - - - - - -
Total (1) 12 13 10 9 7 0 51
2 Other Non-Executive Directors
Fee for attending board / committee meetings - - - - - - -
Commission - - - - - - -
Others - - - - - - -
Total (2)
Total (B) = (1)+(2) 12 13 10 9 7 0 51
Total Mangerial Remuneration 11112
Overall Ceiling as per the Act H21126 lakhs (being 11% of the net profits of the Company calculated as per Section
198 of the Companies Act, 2013)
*Appointed w.e.f 28 March 2019
C. Remuneration to Key Managerial Personnel Other than MD/Manager/WTD

(H in lakhs)
SI No. Key Managerial Personnel Total
CEO Company CFO
Particulars of Remuneration Secretary (P (L Kishore
V Lakshmi Babu)
Rajani)
1 Gross Salary
(a) Salary as per provisions contained in section 17(1) of the Income- 31 222 253
tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - -
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 Not Applicable - - -
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission
- as % of profit - - -
- others
5 Others - PF 1 5 6
Total 32 227 259
VII Penalties / Punishment/ Compounding of Offences:

There were no penalties/ punishments/ compounding of offences for breach of any section of Companies Act against the Company or its Directors
or other Officers in default, if any during the year.
Dr. Murali K. Divi

Date: 25 May 2019 (DIN: 00005040)
77
Independent Auditor’s Report

TO
THE MEMBERS OF
DIVI’S LABORATORIES LIMITED
Report on the audit of the Standalone financial

statements
Opinion Appropriateness of capitalisation of costs as per Ind AS 16

Property, Plant and Equipment
1. We have audited the accompanying standalone financial
statements of Divi’s Laboratories Limited (“the Company”), which Refer to Note 3 to the standalone financial statements
comprise the balance sheet as at March 31, 2019, the statement
of profit and loss (including Other Comprehensive Income), the During the year, the Company has incurred capital costs aggregating
statement of changes in equity and statement of cash flows for the to H19,481 lakhs on property, plant and equipment (representing
year then ended, and notes to the standalone financial statements, Plant & Machinery and Roads & Buildings) and H63,393 lakhs on
including a summary of significant accounting policies and other Capital work-in-progress for expansion of its manufacturing facilities
explanatory information. at Choutuppal (Unit-1) and Visakhapatnam (Unit-2).
2. In our opinion and to the best of our information and according With regard to the capitalisation of Plant and Machinery, Roads
to the explanations given to us, the aforesaid standalone financial and Buildings and Capital work-in-progress, Management
statements give the information required by the Companies Act, has identified certain specific costs incurred for staff costs and
2013 (“the Act") in the manner so required and give a true and fair other overheads relating to each of the assets and capital work-
view in conformity with the accounting principles generally accepted in-progress and has applied judgement to assess if the costs
in India, of the state of affairs of the Company as at March 31, incurred in relation to these assets and capital work-in-progress
2019, total comprehensive income (comprising of profit and other meet the recognition criteria of Property, Plant and Equipment in
comprehensive income), changes in equity and its cash flows for accordance with Ind AS 16.
the year then ended.
This has been determined as a key audit matter due to the
Basis for opinion significance of the capital expenditure during the year and the risk
that the elements of costs that are eligible for capitalisation are not
3. We conducted our audit in accordance with the Standards on appropriately capitalised in accordance with the recognition criteria
Auditing (SAs) specified under section 143(10) of the Act. Our provided in Ind AS 16.
responsibilities under those Standards are further described
in the Auditor’s Responsibilities for the Audit of the Standalone How our audit addressed the key audit matter
Financial Statements section of our report. We are independent
We have performed procedures, including the following, in relation
of the Company in accordance with the Code of Ethics issued by
to testing of capitalisation of costs relating to Road and Buildings,
the Institute of Chartered Accountants of India together with the
Plant and Machinery and capital work-in-progress:
ethical requirements that are relevant to our audit of the standalone
financial statements under the provisions of the Act and the Rules • Understood, evaluated and tested the design and operating
thereunder, and we have fulfilled our other ethical responsibilities in effectiveness of key controls relating to capitalisation of various
accordance with these requirements and the Code of Ethics. We costs incurred, including in relation to Plant and Machinery,
believe that the audit evidence we have obtained is sufficient and Roads and Buildings and capital work-in-progress.
appropriate to provide a basis for our opinion.
• Tested the direct and indirect costs capitalised, on a sample
Key audit matters basis, with the underlying supporting documents to ascertain
nature of costs and basis for allocation, where applicable,
4. Key audit matters are those matters that, in our professional
and evaluated whether they meet the recognition criteria
judgment, were of most significance in our audit of the standalone
provided in the Indian Accounting Standard 16, Property,
financial statements of the current period. These matters were
Plant and Equipment
addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we • Tested, on a sample basis, the employee costs capitalized
do not provide a separate opinion on these matters. in relation to Plant and Machinery and Roads and Buildings
based on factors such as review of their timesheets.
78
Financial Statements
• Tested other costs debited to Statement of Profit and Loss 7. In preparing the standalone financial statements, management
Account, on a sample basis, to ascertain whether these meet is responsible for assessing the Company’s ability to continue
the criteria for capitalisation. as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
• Ensuring adequacy of disclosures in the financial statements unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Our procedures as mentioned above, did not identify any costs
Those Board of Directors are also responsible for overseeing the
that had been inappropriately capitalised.
Company’s financial reporting process.
Other Information Auditor’s responsibilities for the audit of the standalone
financial statements
5. The Company’s Board of Directors is responsible for the other
information. The other information comprises the information 8. Our objectives are to obtain reasonable assurance about whether
included in the Management Discussion and Analysis, Board’s the standalone financial statements as a whole are free from
Report, Business Responsibility Report, performance highlights, material misstatement, whether due to fraud or error, and to
Corporate social responsibility report and Corporate Governance issue an auditor’s report that includes our opinion. Reasonable
Report, but does not include the financial statements and our assurance is a high level of assurance, but is not a guarantee that
auditor’s report thereon. an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise
Our opinion on the financial statements does not cover the from fraud or error and are considered material if, individually or
other information and we will not express any form of assurance in aggregate, they could reasonably be expected to influence
conclusion thereon. the economic decisions of users taken on the basis of these
standalone financial statements.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, 9. As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
consider whether the other information is materially inconsistent with
throughout the audit. We also:
the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. • Identify and assess the risks of material misstatement of the
standalone financial statements, whether due to fraud or
We have nothing to report in this regard. error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
Responsibilities of management and those charged with
appropriate to provide a basis for our opinion. The risk of
governance for the standalone financial statements
not detecting a material misstatement resulting from fraud is
6. The Company’s Board of Directors is responsible for the matters higher than for one resulting from error, as fraud may involve
stated in section 134(5) of the Act with respect to the preparation collusion, forgery, intentional omissions, misrepresentations,
of these standalone financial statements that give a true and fair or the override of internal control.
view of the financial position, financial performance, changes in • Obtain an understanding of internal control relevant to the
equity and cash flows of the Company in accordance with the audit in order to design audit procedures that are appropriate
accounting principles generally accepted in India, including in the circumstances. Under Section 143(3)(i) of the Act, we
the Accounting Standards specified under section 133 of the are also responsible for expressing our opinion on whether
Act. This responsibility also includes maintenance of adequate the company has adequate internal financial controls with
accounting records in accordance with the provisions of the reference to financial statements in place and the operating
Act for safeguarding of the assets of the Company and for effectiveness of such controls.
preventing and detecting frauds and other irregularities; selection
• Evaluate the appropriateness of accounting policies used
and application of appropriate accounting policies; making
and the reasonableness of accounting estimates and related
judgments and estimates that are reasonable and prudent; and
disclosures made by management.
design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the • Conclude on the appropriateness of management’s use of the
accuracy and completeness of the accounting records, relevant going concern basis of accounting and, based on the audit
to the preparation and presentation of the standalone financial evidence obtained, whether a material uncertainty exists related
statements that give a true and fair view and are free from material to events or conditions that may cast significant doubt on the
misstatement, whether due to fraud or error. Company’s ability to continue as a going concern. If we conclude
79
that a material uncertainty exists, we are required to draw (b) In our opinion, proper books of account as required by law
attention in our auditor’s report to the related disclosures in have been kept by the Company so far as it appears from our
the standalone financial statements or, if such disclosures are examination of those books.
inadequate, to modify our opinion. Our conclusions are based
(c) The Balance Sheet, the Statement of Profit and Loss including
on the audit evidence obtained up to the date of our auditor’s
other comprehensive income, the Statement of Changes in
report. However, future events or conditions may cause the
Equity and Cash Flow Statement dealt with by this Report are
Company to cease to continue as a going concern.
in agreement with the books of account.
• Evaluate the overall presentation, structure and content of the
(d) In our opinion, the aforesaid standalone financial statements
standalone financial statements, including the disclosures,
comply with the Accounting Standards specified under
and whether the standalone financial statements represent
Section 133 of the Act.
the underlying transactions and events in a manner that
achieves fair presentation. (e) On the basis of the written representations received from
the directors as on March 31, 2019 taken on record by the
10. We communicate with those charged with governance regarding,
Board of Directors, none of the directors is disqualified as on
among other matters, the planned scope and timing of the audit
March 31, 2019 from being appointed as a director in terms
and significant audit findings, including any significant deficiencies
of Section 164 (2) of the Act.
in internal control that we identify during our audit.
(f) With respect to the adequacy of the internal financial controls
11. We also provide those charged with governance with a statement
with reference to financial statements of the Company and
that we have complied with relevant ethical requirements regarding
the operating effectiveness of such controls, refer to our
independence, and to communicate with them all relationships
separate Report in “Annexure A”.
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards. (g) With respect to the other matters to be included in the Auditor’s
Report in accordance with Rule 11 of the Companies (Audit
12. From the matters communicated with those charged with
and Auditors) Rules, 2014, in our opinion and to the best of
governance, we determine those matters that were of most
our information and according to the explanations given to us:
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. i. The Company has disclosed the impact of pending
We describe these matters in our auditor’s report unless law or litigations on its financial position in its standalone
regulation precludes public disclosure about the matter or when, financial statements – Refer Note 40
in extremely rare circumstances, we determine that a matter
ii. The Company did not have any long-term contracts for
should not be communicated in our report because the adverse
which there were any material foreseeable losses. The
consequences of doing so would reasonably be expected to
Company did not have any derivatives contracts as at
outweigh the public interest benefits of such communication.
March 31, 2019.
Report on other legal and regulatory requirements
iii. There has been no delay in transferring amounts,
13. As required by the Companies (Auditor’s Report) Order, 2016 (“the required to be transferred, to the Investor Education and
Order”), issued by the Central Government of India in terms of sub- Protection Fund by the Company.
section (11) of section 143 of the Act, we give in the Annexure B
iv. The reporting on disclosures relating to Specified Bank
a statement on the matters specified in paragraphs 3 and 4 of the
Notes is not applicable to the Company for the year
Order, to the extent applicable.
ended March 31, 2019.
14. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and

explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sunit Kumar Basu

Place: Hyderabad Partner
Date: May 25, 2019 Membership Number 55000
80
Annexure A to Independent Auditors’ Report

Referred to in paragraph 14(f) of the Independent Auditors’ Report of even date to the members of Divi’s
Laboratories Limited on the standalone financial statements for the year ended March 31, 2019
Report on the Internal Financial Controls with perform the audit to obtain reasonable assurance about whether
reference to financial statements under Clause (i) of adequate internal financial controls with reference to financial
Sub-section 3 of Section 143 of the Act statements was established and maintained and if such controls
operated effectively in all material respects.
1. We have audited the internal financial controls with reference to
financial statements of Divi’s Laboratories Limited (“the Company”) 4. Our audit involves performing procedures to obtain audit evidence
as of March 31, 2019 in conjunction with our audit of the about the adequacy of the internal financial controls system with
standalone financial statements of the Company for the year reference to financial statements and their operating effectiveness.
ended on that date. Our audit of internal financial controls with reference to financial
statements included obtaining an understanding of internal
financial controls with reference to financial statements, assessing
Management’s Responsibility for Internal Financial
the risk that a material weakness exists, and testing and evaluating
Controls
the design and operating effectiveness of internal control based
2. The Company’s management is responsible for establishing on the assessed risk. The procedures selected depend on the
and maintaining internal financial controls based on the internal auditor’s judgement, including the assessment of the risks of
control over financial reporting criteria established by the Company material misstatement of the financial statements, whether due to
considering the essential components of internal control stated fraud or error.
in the Guidance Note on Audit of Internal Financial Controls
5. We believe that the audit evidence we have obtained is sufficient
Over Financial Reporting issued by the Institute of Chartered
and appropriate to provide a basis for our audit opinion on the
Accountants of India (ICAI). These responsibilities include the
Company’s internal financial controls system with reference to
design, implementation and maintenance of adequate internal
financial statements.
financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including
adherence to company’s policies, the safeguarding of its assets, Meaning of Internal Financial Controls with reference
the prevention and detection of frauds and errors, the accuracy to financial statements
and completeness of the accounting records, and the timely
6. A company's internal financial controls with reference to financial
preparation of reliable financial information, as required under the
statements is a process designed to provide reasonable assurance
Act.
regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with
Auditors’ Responsibility generally accepted accounting principles. A company's internal
financial controls with reference to financial statements includes
3. Our responsibility is to express an opinion on the Company's
those policies and procedures that (1) pertain to the maintenance
internal financial controls with reference to financial statements
of records that, in reasonable detail, accurately and fairly reflect
based on our audit. We conducted our audit in accordance with
the transactions and dispositions of the assets of the company;
the Guidance Note on Audit of Internal Financial Controls Over
(2) provide reasonable assurance that transactions are recorded
Financial Reporting (the “Guidance Note”) and the Standards on
as necessary to permit preparation of financial statements in
Auditing deemed to be prescribed under section 143(10) of the
accordance with generally accepted accounting principles, and
Act to the extent applicable to an audit of internal financial controls,
that receipts and expenditures of the company are being made only
both applicable to an audit of internal financial controls and both
in accordance with authorisations of management and directors
issued by the ICAI. Those Standards and the Guidance Note
of the company; and (3) provide reasonable assurance regarding
require that we comply with ethical requirements and plan and
prevention or timely detection of unauthorised acquisition, use, or
disposition of the company's assets that could have a material
effect on the financial statements.
81
Inherent Limitations of Internal Financial Controls Opinion

with reference to financial statements
8. In our opinion, the Company has, in all material respects, an
7. Because of the inherent limitations of internal financial controls adequate internal financial controls system with reference to
with reference to financial statements, including the possibility financial statements and such internal financial controls with reference
of collusion or improper management override of controls, to financial statements were operating effectively as at March 31,
material misstatements due to error or fraud may occur and not 2019, based on the internal control over financial reporting criteria
be detected. Also, projections of any evaluation of the internal established by the Company considering the essential components
financial controls with reference to financial statements to future of internal control stated in the Guidance Note on Audit of Internal
periods are subject to the risk that the internal financial control Financial Controls Over Financial Reporting issued by the Institute of
controls with reference to financial statements may become Chartered Accountants of India.
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

Sunit Kumar Basu

82
Annexure B to Independent Auditors’ Report

Referred to in paragraph 13 of the Independent Auditors’ Report of even date to the members of Divi’s
Laboratories Limited on the standalone financial statements as of and for the year ended March 31, 2019
i. (a) The Company is maintaining proper records showing full v. The Company has not accepted any deposits from the public
particulars, including quantitative details and situation, of fixed within the meaning of Sections 73, 74, 75 and 76 of the Act and
assets. the Rules framed there under to the extent notified.
(b) The fixed assets are physically verified by the Management vi. Pursuant to the rules made by the Central Government of India,
according to a phased programme designed to cover all the the Company is required to maintain cost records as specified
items over a period of three years which, in our opinion, is under Section 148(1) of the Act in respect of its products. We
reasonable having regard to the size of the Company and have broadly reviewed the same, and are of the opinion that, prima
the nature of its assets. Pursuant to the programme, a facie, the prescribed accounts and records have been made and
portion of the fixed assets has been physically verified by the maintained. We have not, however, made a detailed examination
Management during the year and no material discrepancies of the records with a view to determine whether they are accurate
have been noticed on such verification. or complete.
(c) The title deeds of immovable properties, as disclosed in Note vii. (a) According to the information and explanations given to us
3 on fixed assets to the standalone financial statements, are and the records of the Company examined by us, in our
held in the name of the Company. opinion, the Company is generally regular in depositing
undisputed statutory dues in respect of income tax, though
ii. The physical verification of inventory have been conducted at there has been a slight delay in a few cases and is regular
reasonable intervals by the Management during the year. The in depositing undisputed statutory dues including provident
discrepancies noticed on physical verification of inventory as fund, employees’ state insurance, sales tax, service tax, duty
compared to book records were not material. of customs, duty of excise, value added tax, cess, goods and
service tax and other material statutory dues as applicable,
iii. The Company has not granted any loans, secured or unsecured,
with the appropriate authorities. Also refer note 40 (b) to the
to companies, firms, Limited Liability Partnerships or other parties
financial statements regarding management’s assessment on
covered in the register maintained under Section 189 of the Act.
certain matters relating to provident fund.
Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of
the said Order are not applicable to the Company. (b) According to the information and explanations given to us and
the records of the Company examined by us, there are no
iv. The Company has not granted any loans or made any investments,
dues of sales tax, service-tax, value added tax which have not
or provided any guarantees or security to the parties covered
been deposited on account of any dispute. The particulars of
under Section 185 and 186. Therefore, the provisions of Clause
dues of income tax, entry tax, duty of customs, and duty of
3(iv) of the said Order are not applicable to the Company.
excise as at March 31, 2019 which have not been deposited
on account of a dispute, are as follows.
Nature of Disputed Amount Period to which the Forum where the dispute is
Name of the Statue
Dues Amount (J) deposited (J) amount relates pending
Customs Act, 1962 Penalty 1,000,000 - January, 2007 Customs, Excise and Service Tax
Appellate Tribunal, South Zonal
Bench, Chennai.
Customs Act, 1962 Penalty 15,148,315 336,475 June, 2006 to Customs, Excise and Service Tax
December, 2008 Appellate Tribunal, South Zonal
Bench, Bangalore.
Customs Act, 1962 Customs 3,669,894 - March, 2012 Customs, Excise and Service Tax
duty and Appellate Tribunal, South Zonal
Penalty Bench, Bangalore.
Customs Act, 1962 Customs 6,314,711 - November, 2012 Customs, Excise and Service Tax
duty and Appellate Tribunal, South Zonal
Penalty Bench, Bangalore.
83
Nature of Disputed Amount Period to which the Forum where the dispute is
Name of the Statue
Dues Amount (J) deposited (J) amount relates pending
Customs Act, 1962 Penalty 859,631 - June,2009 to March, Customs, Excise and Service Tax
2010 Appellate Tribunal, South Zonal
Bench, Bangalore.
Customs Act, 1962 Customs 4,988,859 4,988,859 May, 2014 to The commissioner of customs
duty February, 2018 (Appeals)
Central Excise Act, 1944 Penalty 24,408,690 - September, 2006 to Customs, Excise and Service Tax
December, 2008 Appellate Tribunal, South Zonal
Bench, Bangalore.
Central Excise Act, 1944 Penalty 937,500 - July,2009 to March, Customs, Excise and Service Tax
2010 Appellate Tribunal, South Zonal
Bench, Bangalore.
Central Excise Act, 1944 Excise duty 1,942,840 97,142 May,2011 to Excise, Customs and Service Tax
and Penalty December, 2011 (Appeals), Visakhapatnam.
Central Excise Act, 1944 Excise duty 76,644 5,266 Financial years 2014 Commissioner of Customs,
and Penalty to 2017 (Appeals), Custom House, Port
Area, Visakhapatnam
Central Excise Act, 1944 Service tax 3,506,524 263,000 April, 2012 to March, Assistant Registrar, The Customs,
and Penalty 2013 Excise & Service Tax Appellate
Tribunal, Hyderabad
Central Excise Act, 1944 Service tax 4,518,106 376,522 April, 2010 to March, Commissioner (Appeal-III),
and Penalty 2011 Customs, Central Excise &
Service Tax, Hyderabad.
Entry of Goods into Entry Tax 46,30,657 17,99,856 Financial years 2004- Sales Tax appellate tribunal,
Local areas Act, 2001 05 to 2016-17 Hyderabad
Entry of Goods into Entry Tax 43,19,128 539,892 Financial years 2014- Sales Tax appellate tribunal,
Local areas Act, 2001 15 to 2016-17 Vijayawada
Income Tax Act, 1961 Interest 40,512 - Financial Year Additional Commissioner of
2005-06 Income Tax, Range-I, Hyderabad.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in
repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans.
Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud
by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such
case by the Management.
xi. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not
applicable to the Company.
84
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The
details of such related party transactions have been disclosed in the standalone financial statements as required under Indian Accounting
Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year
under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of
Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of
Clause 3(xvi) of the Order are not applicable to the Company.

Sunit Kumar Basu

85
Standalone Balance Sheet

(All amounts in Indian Rupees Lakhs, except equity shares and per share data unless otherwise stated)
As at As at
Particulars Note
March 31, 2019 March 31, 2018
ASSETS
Non-current assets
Property, plant and equipment 3 2,08,339 1,98,933
Capital work-in-progress 3 49,191 11,976
Intangible assets 4 405 655
Financial assets
(i) Investments 5 55,462 737
(ii) Loans 6 3,404 3,394
Income Tax assets (Net) 7 1,928 881
Other non-current assets 8 20,540 8,811
Total Non-current assets 3,39,269 2,25,387
Current assets
Inventories 9 1,66,318 1,28,139
Financial assets
(i) Investments 10 1,39,834 1,88,929
(ii) Trade receivables 11 1,28,224 1,11,211
(iii) Cash and cash equivalents 12 294 417
(iv) Bank balances other than (iii) above 13 10,226 8,731
(v) Loans 14 11 1,486
(vi) Other financial assets 15 135 948
Other current assets 16 19,707 15,530
Total Current assets 4,64,749 4,55,391
TOTAL ASSETS 8,04,018 6,80,778
EQUITY AND LIABILITIES
Equity:
Equity share capital 17(a) 5,309 5,309
Other equity:
(i) Reserves and surplus 17(b) 6,92,022 5,90,656
Total Equity 6,97,331 5,95,965
LIABILITIES
Non-current liabilities
Provisions 18 1,317 1,495
Deferred tax liabilities (net) 19 22,118 19,269
Total Non-current liabilities 23,435 20,764
Current liabilities
Financial liabilities
(i) Borrowings 20 10,560 6,311
(ii) Trade payables
-Total outstanding dues of micro enterprises and small enterprises - -
-Total outstanding dues of creditors other than micro enterprises and small enterprises 21 48,331 40,565
(iii) Other financial liabilities 22 6,289 2,233
Provisions 18 111 94
Other current liabilities 23 17,961 14,846
Total current liabilities 83,252 64,049
TOTAL LIABILITIES 1,06,687 84,813
TOTAL EQUITY AND LIABILITIES 8,04,018 6,80,778
The accompanying notes are an integral part of the financial statements

This is the Standalone Balance Sheet referred to in our report of even date
For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors of
Firm registration number: 012754N/N500016 Divi's Laboratories Limited
Sunit Kumar Basu Dr. Murali K Divi Kiran S Divi

Partner Chairman and Managing Director Director
Membership number: 55000 DIN: 00005040 DIN: 00006503
Place: Hyderabad L. Kishorebabu P.V. Lakshmi Rajani

Date: 25-05-2019 Chief Financial Officer Company Secretary
86
Standalone Balance Sheet & Standalone Statement of Profit and Loss
Standalone Statement of Profit and Loss

For the Year For the Year

Particulars Note ended ended
March 31, 2019 March 31, 2018
Revenue
Revenue from operations 24 4,87,966 3,83,723
Other income 25 15,658 11,248
Total Revenue 5,03,624 3,94,971
Expenses
Cost of raw materials consumed 26 2,08,205 1,52,428
Changes in inventories of finished goods and work-in-progress 27 (24,422) (1,938)
Excise duty - 2,129
Employee benefits expense 28 53,072 44,627
Finance costs 29 350 133
Depreciation and amortization expense 30 16,881 14,242
Other expenses 31 66,215 61,414
Total Expenses 3,20,301 2,73,035
Profit before tax 1,83,323 1,21,936
Income Tax expense 32
Current tax 47,245 28,713
Deferred tax 2,813 6,265
Profit after tax for the year 1,33,265 86,958
Other Comprehensive Income
(A) Items that will not be reclassified to profit or loss
-Remeasurements of post-employment benefit obligations 141 94
Income tax relating to these items (36) (27)
(B) Items that will be reclassified to profit or loss - -
Other Comprehensive Income/(Loss) after tax for the year, net of tax 105 67
Total Comprehensive Income for the year 1,33,370 87,025
Earnings per share (Par value of J2 each)
-Basic and Diluted 43 50.20 32.76

This is the Standalone statement of Profit and Loss referred to in our report of even date


87
Standalone Statement of Cash Flow


Note ended ended
March 31, 2019 March 31, 2018
Cash flow from operating activities
Profit before income tax 1,83,323 1,21,936
Adjustments for:
Depreciation and amortisation expense 30 16,881 14,242
Unrealised foreign exchange loss 3,647 (3,536)
Interest Income 25 (851) (674)
Dividend classified as investing cash flows 25 (8,406) (7,612)
Gain on sale of investments 25 (97) (8)
Provision for doubtful debts 31 63 61
Provisions / Liabilities no longer required written back 25 (429) -
Changes in fair value of mutual funds 25 (2,625) (260)
Loss on disposal / discard of assets 31 139 626
Government grant 25 (1) -
1,91,994 1,24,908
Change in operating assets and liabilities
(Increase) in trade receivables 11 (20,384) (6,486)
(Increase) in inventories 9 (38,179) (2,563)
Increase / (Decrease) in trade payables 21 8,077 (4,357)
Decrease / (Increase) in other non current Loans 6 (10) 1,814
Decrease / (Increase) in other non current assets 8 (3) 12
(Increase) /Decrease in Current Loans and other current financial assets 14,15 1,723 (980)
(Increase) in other current assets 16 (4,177) (8,821)
Payment towards long term employee benefit obligation 18 (22) (35)
Increase in short term employee benefit obligation 18 141 33
Increase/ (Decrease) in other financial liabilities 22 2,219 (439)
Increase in other current liabilities 23 3,319 241
Cash generated from operations 1,44,698 1,03,327
Income taxes paid including withholding tax and net of refunds (48,292) (26,855)
Net cash inflow from operating activities 96,406 76,472
Cash flows from investing activities
Payments for property, plant and equipment (73,294) (27,387)
Proceeds from sale of property, plant and equipment 2 13
Gain on Sale of investments 25 97 8
Payments for purchase of Investments 5,10 (86,404) (74,500)
Proceeds out of sale of Investments 5,10 83,399 48,903
Dividend received 25 8,406 7,612
Interest received 25 757 711
Investment in deposits 13 (1,387) (2,949)
Net cash (outflow) from investing activities (68,424) (47,589)
88


Note ended ended
March 31, 2019 March 31, 2018
Cash flows from financing activities
Proceeds from working capital loans 20 7,760 641
Interest paid 29 (350) (133)
Dividends paid to company's shareholders (Including Corporate Dividend tax) (32,004) (31,925)
Net cash inflow / (outflow) from financing activities (24,594) (31,417)
Net increase (decrease) in cash and cash equivalents 3,388 (2,534)
Cash and cash equivalents at the beginning of the financial year (4,184) (1,650)
Cash and cash equivalents at end of the year (796) (4,184)
Reconciliation of Cash and cash equivalents as per the Cash Flow

Statement
Cash and cash equivalents as per above comprise of the following:
Cash and cash equivalents (Refer Note 12) 294 417
Bank Overdrafts (Refer Note 20) (1,090) (4,601)
Balances as per Statement of Cash flows (796) (4,184)
1. The Cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7) Statement of Cash
Flows.
2. The accompanying notes are an integral part of the financial statements.
3. Previous year figures have been regrouped /reclassified to conform to current year classification.
This is the Standalone Cash Flow statement referred to in our report of even date


89
Standalone Statement of Changes in Equity

a. Equity share capital
Number of Shares Amount

As at April 01, 2017 26,54,68,580 5,309
Changes in equity share capital - -
As at April 1, 2018 26,54,68,580 5,309
As at March 31, 2019 26,54,68,580 5,309
b. Other Equity
Reserves & surplus
Securities Special Economic Zone General Retained Total
Premium Re-investment reserve reserve earnings Equity
Balance at April 1, 2017 7,988 19,900 1,00,000 4,07,694 5,35,582
Profit for the year - - - 86,958 86,958
Other comprehensive income for the year, net of income tax - - - 67 67
Total comprehensive income for the year - - - 87,025 87,025
Transactions with owners in their capacity as
owners:
Payment of dividends (including tax) - - - (31,951) (31,951)
Transfer to Special Economic Zone Re-investment - 8,927 - (8,927) -
reserve
Utilisation of Special Economic Zone Re-investment - (22,351) - 22,351 -
reserve
Balance at March 31, 2018 7,988 6,476 1,00,000 4,76,192 5,90,656
Balance at April 1, 2018 7,988 6,476 1,00,000 4,76,192 5,90,656
Profit for the year - - - 1,33,265 1,33,265
Other comprehensive income for the year, net of income tax - - - 105 105
Total comprehensive income for the year - - - 1,33,370 1,33,370
owners:
Payment of dividends (including tax) - - - (32,004) (32,004)
Transfer to Special Economic Zone Re-investment - 15,900 - (15,900) -
reserve
Utilisation of Special Economic Zone Re-investment - (2,029) - 2,029 -
reserve
Balance at March 31, 2019 7,988 20,347 1,00,000 5,63,687 6,92,022

This is the Standalone Statement of changes in Equity referred to in our report of even date


90
Standalone Statement of Changes in Equity & Notes to Standalone Financial Statements
Notes to Standalone Financial Statements

1. Background: • Ind AS 115, Revenue from contracts with customers
1.1 (Divi's), (the 'company') is a company limited by shares, • Appendix B, Foreign currency Transactions and
incorporated and domiciled in India. The company is engaged Advance consideration to Ind AS 21. The effects of
in the manufacture of Active Pharmaceutical ingredients changes in Foreign Exchange Rates
(API's), Intermediates and Nutraceutical ingredients with
The amendments listed above did not have any
predominance in exports. In addition to generic business, the
significant impact on the amounts recognised in prior
company, through its Custom synthesis business, supports
periods and are not expected to significantly affect the
innovator pharma companies for their patented products
current or future periods.
business right from gram scale requirements for clinical trials
to launch as well as late life cycle management. The Company (iv) Current and non-current classification
is a public limited company and the Company’s equity shares
are listed on the BSE Limited and National Stock Exchange of An asset / liability is classified as current if:
India Limited (NSE) in India.
(a) The amount is expected to be realized or sold or
1.2 The Financial statements are approved for issue by the consumed in the Company’s normal operating
Company’s Board of Directors on May 25, 2019. cycle; the liability is expected to be settled in normal
operating cycle;
2. Significant Accounting Policies (b) Asset / liability is held primarily for the purpose of
trading;
This note provides a list of the significant accounting policies
adopted in the preparation of these financial statements. These (c) Asset / liability is expected to be realized/settled
policies have been consistently applied to all the years presented, within twelve months after the reporting period; or
unless otherwise stated.
(d) The asset is cash or a cash equivalent unless it is
2.1 Basis of Preparation: restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting
(i) Compliance with Ind AS
period. The liability has no unconditional right to
The financial statements comply in all material aspects defer the settlement of the liability for at least twelve
with Indian Accounting Standards (Ind AS) notified under months after the reporting period.
section 133 of the Companies Act, 2013 (the Act)
All other assets / liabilities are classified as non-
[Companies (Indian Accounting Standards) Rules, 2015]
current.
and other relevant provisions of the Act and guidelines
issued by Securities and Exchange Board of India (SEBI). The operating cycle is the time between acquisition of
assets for processing and their realization in cash and
(ii) Historical cost convention
cash equivalents. Based on the nature of products
The financial statements have been prepared on a and time between acquisition of assets for processing
historical cost basis, except for the following: and their realization in cash and cash equivalents,
the Company has ascertained its operating cycle as
• Certain financial assets and liabilities that are 12 months for the purpose of current/non-current
measured at fair value; (refer accounting policy classification of assets and liabilities.
regarding financial instruments)
(v) Recent Accounting Pronouncements:
• Defined benefit plans – plan assets measured at fair
value Appendix C, Uncertainty over Income Tax
Treatments, to Ind AS 12, ‘Income Taxes’
(iii) Amended standard adopted by the Company
The appendix explains how to recognise and measure
The company has applied the following standards and
deferred and current income tax assets and liabilities
amendments for the first time for their annual reporting
where there is uncertainty over a tax treatment. In
period commencing 1 April 2018
particular, it discusses:
91

• how to determine the appropriate unit of account, Prepayment Features with Negative Compensation
and that each uncertain tax treatment should be – Amendments to Ind AS 109, ‘Financial
considered separately or together as a group, Instruments’
depending on which approach better predicts the
resolution of the uncertainty; The narrow-scope amendments made to Ind AS 109
enable entities to measure certain prepayable financial
• that the entity should assume a tax authority will assets with negative compensation at amortised cost.
examine the uncertain tax treatments and have These assets, which include some loan and debt
full knowledge of all related information, i.e. the securities, would otherwise have to be measured at
detection risk should be ignored; fair value through profit or loss. To qualify for amortised
cost measurement, the negative compensation must be
• that the entity should reflect the effect of the ‘reasonable compensation for early termination of the
uncertainty in its income tax accounting when it is contract’ and the asset must be held within a ‘held to
not probable that the tax authorities will accept the collect’ business model.
treatment;
These amendments are not expected to have any
• that the impact of the uncertainty should be impact on the financial statements of the Company.
measured using either the most likely amount
or the expected value method, depending on Plan Amendment, Curtailment or Settlement –
which method better predicts the resolution of the Amendments to Ind AS 19, ‘Employee Benefits’
uncertainty; and
The amendments to Ind AS 19 clarify the accounting
• that the judgements and estimates made must be for defined benefit plan amendments, curtailments and
reassessed whenever circumstances have changed settlements. They confirm that entities must:
or there is new information that affects the judgements.
• calculate the current service cost and net interest
The Company operates in limited countries and tax for the remainder of the reporting period after a plan
jurisdictions and has substantially completed assessing amendment, curtailment or settlement by using the
its existing models and processes which it has updated assumptions from the date of the change;
developed to account for tax uncertainties against the
specific guidance in the Appendix C to Ind AS 12 to • any reduction in a surplus should be recognised
consider the impact on income tax accounting in respect immediately in profit or loss either as part of past
of its material tax jurisdictions. Basis such assessment, service cost, or as a gain or loss on settlement.
the application of this guidance is not expected to have In other words, a reduction in a surplus must be
material impact on its financial statements. recognised in profit or loss even if that surplus was
not previously recognised because of the impact of
Long-term Interests in Associates and Joint the asset ceiling; and
Ventures – Amendments to Ind AS 28, ‘Investment
in Associates and Joint Ventures’ • separately recognise any changes in the asset
ceiling through other comprehensive income.
The amendments clarify the accounting for long-
term interests in an associate or joint venture, which in These amendments will apply to any future plan
substance form part of the net investment in the associate amendments, curtailments, or settlements of the
or joint venture, but to which equity accounting is not Company on or after 1 April 2019. The Company does
applied. Entities must account for such interests under Ind not have any impact on account of this amendment.
AS 109 ‘Financial Instruments’ before applying the loss
Ind AS 103, ‘Business Combinations’
allocation and impairment requirements in Ind AS 28.
The amendments clarify that obtaining control of
Since the Company does not have associates or joint
a business that is a joint operation, is a business
ventures, the amendments will not have any impact on
combination achieved in stages. The acquirer should re-
its financial statements.
measure its previously held interest in the joint operation
at fair value at the acquisition date.
92

These amendments will apply to future business Ind AS 116 will affect primarily the accounting by lessees
combinations of the Company for which acquisition and will result in the recognition of almost all leases
date is on or after 1 April 2019. These amendments do on balance sheet. The standard removes the current
not have any impact on the financial statements of the distinction between operating and finance leases and
Company. requires recognition of an asset (the right-of-use of the
leased item) and a financial liability to pay rentals for
Ind AS 111, ‘Joint Arrangements’ virtually all lease contracts. An optional exemption exists
for short-term and low-value leases.
The amendments clarify that the party obtaining joint
control of a business that is a joint operation should The statement of profit and loss will also be affected
not re-measure its previously held interest in the joint because the total expense is typically higher in the earlier
operation. years of a lease and lower in later years. Additionally,
operating expense will be replaced with interest and
These amendments will apply to future transactions
depreciation, so key metrics like EBITDA will change.
of the Company in which it obtains joint control of a
business on or after 1 April 2019. These amendments Operating cash flows will be higher as repayments of
do not have any impact on the financial statements of the lease liability and related interest are classified within
the Company. financing activities.
Amendment to Ind AS 12, Income Taxes The accounting by lessors will not significantly change.
Some differences may arise as a result of the new
The amendments clarify that the income tax
guidance on the definition of a lease. Under Ind AS 116,
consequences of dividends on financial instruments
a contract is, or contains, a lease if the contract conveys
classified as equity should be recognised according
the right to control the use of an identified asset for a
to where the past transactions or events that
period of time in exchange for consideration.
generated distributable profits were recognised. These
requirements apply to all income tax consequences of The Company is in the process of reviewing all of its
dividends. Previously, it was unclear whether the income leasing arrangements in light of the new lease accounting
tax consequences of dividends should be recognised in rules in Ind AS 116. The standard will affect primarily the
profit or loss, or in equity, and the scope of the existing accounting for the Company’s operating leases. The
guidance was ambiguous. Company intends to apply simplified transition approach
and will not restate comparative information in the
The amendments are effective on or after 1 April 2019
financial statements for the year ending 31 March 2020
and the Company will apply the amendments for the
to show the impact of adopting Ind AS 116.
financial statements prepared on or after 1 April 2019.
2.2 Segment Reporting:
Ind AS 23, ‘Borrowing Costs’
Operating segments are reported in a manner consistent
The amendments clarify that if a specific borrowing
with the internal reporting provided to the Chief Operating
remains outstanding after the related qualifying asset is
Decision Maker. The Chairman and Managing Director has
ready for its intended use or sale, it becomes part of
been identified as being the Chief Operating Decision Maker.
general borrowings.
Refer note 37 for the segment information presented.
Since the Company does not have qualifying assets,
2.3 Foreign currency translation:
these amendments do not have any impact on the
financial statements of the Company. (i) Functional and presentation currency
Ind AS 116, ‘Leases’ Items included in the financial statements of the Company
are measured using the currency of the primary
Ind AS 116 was notified by Ministry of Corporate Affairs
economic environment in which the entity operates
on 30 March 2019 and it is applicable for annual
('the functional currency'). The financial statements are
reporting periods beginning on or after 1 April 2019.
presented in Indian rupee (INR), which is Divi's (the
Company’s) functional and presentation currency.
93

(ii) Transactions and balances instances in which the period between payment and
transfer of the goods will be one year or less. Taxes
Foreign currency transactions are translated into the collected from customers relating to product sales
functional currency using the exchange rates at the and remitted to government authorities are excluded
dates of the transactions. Foreign exchange gains and from revenues.
losses resulting from the settlement of such transactions
and from the translation of monetary assets and For contracts with multiple performance obligations,
liabilities denominated in foreign currencies at year end the Company allocates the transaction price to each
exchange rates are generally recognised in statement of performance obligation based on the relative standalone
profit and loss. selling price. The Standalone selling price of each
performance obligation is estimated using expected costs
Non-monetary items that are measured at fair value in of satisfying such performance obligation and then an
a foreign currency are translated using the exchange appropriate margin is added for such goods or services.
rates at the date when the fair value was determined.
Translation differences on assets and liabilities carried (ii) Revenue from Sale of Services:
at fair value are reported as part of the fair value gain
or loss. For example, translation differences on non- Revenue from Sale of services is recognised as per the
monetary assets and liabilities such as equity instruments terms of the contracts with customers when the related
held at fair value through profit or loss are recognised services are performed or the agreed milestones are
in statement of profit and loss as part of the fair value achieved.
gain or loss and translation differences on non-monetary
(iii)
Export incentives:
assets such as equity investments classified as FVOCI
are recognised in other comprehensive income. Export incentives comprise of Duty draw back and MEIS
(Merchandise Exports Incentive scheme) scrips.
2.4 Revenue recognition:
Duty drawback is recognised as income when the right
Revenue is measured at fair value of the consideration
to receive credit as per the terms of the scheme is
received or receivable. Amounts disclosed as revenue are
established in respect of the exports made and where
inclusive of excise duty and net of returns, trade allowances,
there is no significant uncertainty regarding the ultimate
rebates, sales tax, value added taxes, Goods & Service Tax
collection of the relevant export proceeds.
(GST) and amounts collected on behalf of third parties.
MEIS scrips are freely transferable and can be utilised
(i) Revenue from Sale of Goods:
for the payment of customs duty. MEIS scrips are
Effective April 1, 2018, the Company adopted Ind AS recognised either on transfer/sale of such scrips or
115 “Revenue from Contracts with Customers” using the when it is reasonably certain that such scrips can be
modified retrospective method. Also, refer note 44. The utilised against customs duty on imports.
following is a summary of new and/or revised significant
(iv)
Dividend Income:
accounting policies related to revenue recognition.
Refer Note 2 “Significant Accounting Policies,” in the Dividends are received from financial assets at fair
Company’s 2018 Annual Report for the policies in effect value through profit or loss and at FVOCI. Dividends
for revenue prior to April 1, 2018. are recognised as other income in profit or loss when
the right to receive payment is established. This applies
Revenue from sale of goods is recognized when the
even if they are paid out of pre-acquisition profits, unless
customer obtains control of the Company’s product,
the dividend clearly represents a recovery of part of the
which occurs at a point in time, usually upon shipment,
cost of the investment.
with payment terms typically in the range of 60 to 180 days
after invoicing depending on product and geographic (v)
Interest Income:
region. The Company elected the practical expedient
approach not to adjust the amount of consideration for Interest income from financial assets at fair value through
the effects of a significant financing component for all profit or loss is disclosed as interest income within other
income. Interest income, on financial assets at amortised
94

cost and financial assets at FVOCI, is calculated using differences will reverse in the foreseeable future and taxable
the effective interest method and the same is recognised profit will not be available against which the temporary
in the statement of profit and loss as part of other income. difference can be utilized.
Interest income is calculated by applying the effective
interest rate to the gross carrying amount of a financial Deferred tax assets and liabilities are offset when there is
asset except for financial assets that subsequently a legally enforceable right to offset current tax assets and
become credit-impaired. For credit-impaired financial liabilities and when the deferred tax balances relate to the
assets, the effective interest rate is applied to the net same taxation authority. Current tax assets and tax liabilities
carrying amount of the financial asset (after deduction of are offset where the entity has a legally enforceable right to
the loss allowance). offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
2.5 Income Taxes:
Current and deferred tax is recognised in profit or loss,
The income tax expense or credit for the period is the tax except to the extent that it relates to items recognised in other
payable on the current period's taxable income based on the comprehensive income or directly in equity. In this case, the
applicable income tax rate for each jurisdiction adjusted by tax is also recognised in other comprehensive income or
changes in deferred tax assets and liabilities attributable to directly in equity, respectively.
temporary differences and to unused tax losses.
For operations carried out in Special Economic Zones which
The current income tax charge is calculated on the basis are entitled to tax holiday under the Income tax Act, 1961
of the tax laws enacted or substantively enacted at the end no deferred tax is recognised in respect of timing differences
of the reporting period. Management periodically evaluates which reverse during the tax holiday period, to the extent
positions taken in tax returns with respect to situations in company’s gross total income is subject to the deduction
which applicable tax regulation is subject to interpretation. during the tax holiday period. Deferred tax in respect of
It establishes provisions, where appropriate, on the basis of timing differences which reverse after the tax holiday period is
amounts expected to be paid to the tax authorities. recognised in the year in which timing difference originate.
Deferred income tax is provided in full, using the liability Deferred Tax Assets include Minimum Alternative Tax (MAT)
method, on temporary differences arising between the tax paid in accordance with the tax laws in India, which is likely to
bases of assets and liabilities and their carrying amounts in give future economic benefits in the form of availability of set off
the financial statements. Deferred income tax is determined against future income tax liability. Accordingly, MAT is recognized
using tax rates (and laws) that have been enacted or as deferred tax asset in the Balance sheet when the asset can
substantially enacted by the end of the reporting period and be measured reliably and it is probable that the future economic
are expected to apply when the related deferred income tax benefit associated with the asset will be realized.
asset is realized or the deferred income tax liability is settled.
2.6 Impairment of assets:
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it is Assets are tested for impairment whenever events or changes
probable that future taxable amounts will be available to utilize in circumstances indicate that the carrying amount may not be
those temporary differences and losses. recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
Deferred tax liabilities are not recognised for temporary amount. The recoverable amount is the higher of an asset's
differences between the carrying amount and tax bases of fair value less costs of disposal and value in use. For the
investments in subsidiaries where the Company is able to purposes of assessing impairment, assets are grouped at the
control the timing of the reversal of the temporary differences lowest levels for which there are separately identifiable cash
and it is probable that the differences will not reverse in the inflows which are largely independent of the cash inflows from
foreseeable future. other assets or groups of assets (cash-generating units).
Non-financial assets that suffered an impairment are reviewed
Deferred tax assets are not recognised for temporary for possible reversal of the impairment at the end of each
differences between the carrying amount and tax bases of reporting period.
investments in subsidiaries where it is not probable that the
95

2.7 Cash and cash equivalents: The classification depends on the entity's business
model for managing the financial assets and the
For the purpose of presentation in the statement of cash flows, contractual terms of the cash flows.
cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly For assets measured at fair value, gains and losses will
liquid investments with original maturities of three months or either be recorded in profit or loss or other comprehensive
less that are readily convertible to known amounts of cash income. For investments in debt instruments, this will
and which are subject to an insignificant risk of changes in depend on the business model in which the investment
value, and bank overdrafts. Bank overdrafts are shown within is held. For investments in equity instruments, this
borrowings in current liabilities in the balance sheet. will depend on whether the Company has made an
irrevocable election at the time of initial recognition to
2.8 Trade receivables: account for the equity investment at fair value through
other comprehensive income. The Company reclassifies
Trade receivables are recognised initially at fair value and
debt investments when and only when its business
subsequently measured at amortised cost using the effective
model for managing those assets changes.
interest method, less provision for impairment, since the
company holds trade receivables with an objective to collect (ii)
Recognition
contractual cash flows.
Purchases and sale of financial assets are recognised
2.9 Inventories: on trade date, the date on which company commits to
purchase or sale the financial assets.
Raw materials and stores, work-in-progress, traded and
finished goods are stated at the lower of cost, calculated on (iii)
Measurement
weighted average basis, and net realizable value. Cost of
raw materials and stores comprise of costs of purchases. At initial recognition, the Company measures a financial
Cost of work-in-progress and finished goods comprises asset at its fair value plus, in the case of a financial asset
direct materials, direct labour and an appropriate proportion not at fair value through profit or loss, transaction costs that
of variable and fixed overhead expenditure, the latter being are directly attributable to the acquisition of the financial
allocated on the basis of normal operating capacity. Cost of asset. Transaction costs of financial assets carried at fair
inventories also include all other costs incurred in bringing the value through profit or loss are expensed in profit or loss.
inventories to their present location and condition. Costs of
purchased inventory are determined after deducting rebates Debt instruments
and discounts. Net realizable value is the estimated selling
Subsequent measurement of debt instruments depends
price in the ordinary course of business less the estimated
on the Company's business model for managing the
costs of completion and the estimated costs necessary to
asset and the cash flow characteristics of the asset.
make the sale. Items held for use in the production of inventory
There are three measurement categories into which the
are not written below cost if the finished product in which these
Company classifies its debt instruments:
will be incorporated are expected to be sold at or above cost.
Amortised cost: Assets that are held for collection of
2.10 Investments and other financial assets:
contractual cash flows where those cash flows represent
(i) Classification: solely payments of principal and interest are measured at
amortised cost. Interest income from these financial assets
The Company classifies its financial assets in the is included in finance income using the effective interest
following measurement categories: rate method. Any gain or loss arising on derecognition
is recognised directly in profit or loss and presented in
• those to be measured subsequently at fair value other gains/(losses). Impairment losses are presented as
(either through other comprehensive income, or separate line item in the statement of profit and loss
through profit or loss), and
Fair value through other comprehensive income (FVOCI):
• those measured at amortised cost. Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets' cash
96

flows represent solely payments of principal and interest, For trade receivables only, the Company applies the
are measured at fair value through other comprehensive simplified approach permitted by Ind AS 109 Financial
income (FVOCI). Movements in the carrying amount Instruments, which requires expected lifetime losses to
are taken through OCI, except for the recognition of be recognised from initial recognition of the receivables.
impairment gains or losses, interest revenue and foreign
exchange gains and losses, which are recognised in profit (v) Derecognition of financial assets
and loss. When the financial asset is derecognised, the
A financial asset is derecognized only when
cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in • the Company has transferred the rights to receive
other gains/(losses). Interest income from these financial cash flow from the financial asset or
assets is included in other income using the effective
interest rate method. • retains the contractual rights to receive the cash
flows of the financial assets, but assumes a
Fair value through profit or loss: Assets that do not meet contractual obligation to pay cash flows to one or
the criteria for amortised cost or FVOCI are measured more recipients.
at fair value through profit or loss. A gain or loss on a
debt investment that is subsequently measured at fair Where the entity has transferred an asset, the Company
value through profit or loss and is not part of a hedging evaluates whether it has transferred substantially all
relationship is recognised in profit or loss and presented risks and rewards of ownership of the financial asset.
net in the statement of profit and loss within other gains/ In such cases, the financial asset is derecognized.
(losses) in the period in which it arises. Interest income Where the entity has not transferred substantially all
from these financial assets is included in other income. risks and rewards of ownership, the financial asset is not
derecognized.
Equity instruments
Where the entity has neither transferred a financial
Subsequent measurements of all equity investments are asset nor retains substantially all risks and rewards of
done at fair value. Where the Company's management ownership of the financial asset, the financial asset is
has elected to present fair value gains and losses on derecognised if the Company has not retained control
equity investments in other comprehensive income, there of the financial asset. Where the Company retains
is no subsequent reclassification of fair value gains and control of the financial asset, the asset is continued to
losses to profit or loss. Dividends from such investments be recognised to the extent of continuing involvement in
are recognised in profit or loss as other income when the financial asset.
the Company's right to receive payments is established.
Changes in the fair value of financial assets at fair value 2.11 Offsetting financial instruments:
through profit or loss are recognised in other income in
Financial assets and liabilities are offset and the net amount
the statement of profit and loss. Impairment losses (and
is reported in the balance sheet where there is a legally
reversal of impairment losses) on equity investments
enforceable right to offset the recognized amounts and there is
measured at fair value are not reported separately from
an intention to settle on a net basis or realize the asset and settle
other changes in fair value.
the liability simultaneously. The legally enforceable right must not
(iv) Impairment of financial assets be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency
The Company assesses on a forward looking basis, the or bankruptcy of the Company or the counterparty.
expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The 2.12 Property, Plant & Equipment:
impairment methodology applied depends on whether
Freehold land is carried at historical cost. All other items of
there has been a significant increase in credit risk. Note
property, plant and equipment are stated at historical cost
35 details how the Company determines whether there
less depreciation. Historical cost includes expenditure that
has been a significant increase in credit risk.
is directly attributable to the acquisition of the items. On
97

transition to Ind AS, the Company had elected to continue 2.13 Intangible Assets:
with the carrying value of all its property, plant and equipment
recognized as at 1st April 2015 measured as per the previous (i) Computer software
GAAP and use that carrying value as the deemed cost of the
Costs associated with maintaining software are
property, plant and equipment.
recognised as an expense as incurred. Development
Subsequent costs are included in the asset’s carrying amount costs that are directly attributable to the design and
or recognized as a separate asset, as appropriate, only when testing of identifiable and unique software products
it is probable that future economic benefits associated with controlled by the Company are recognised as intangible
the item will flow to the Company and the cost of the item can assets when the following criteria are met:
be measured reliably. The carrying amount of any component
- it is technically feasible to complete the software so
accounted for as separate asset is derecognized when
that it will be available for use
replaced. All other repairs and maintenance are charged to
profit or loss during the reporting period in which they are - management intends to complete the software and
incurred. use or sell it
Capital work-in-progress includes cost of property, plant and - there is an ability to use or sell the software
equipment under installation/development as at the balance - it can be demonstrated how the software will
sheet date. generate probable future economic benefits
(i) Depreciation methods, estimated useful lives and - adequate technical, financial and other resources
residual value to complete the development and to use or sell the
software are available and;
Depreciation on Property, Plant & Equipment is provided
on straight-line basis to allocate their cost, net of residual - the expenditure attributable to the software during
value over the estimated useful lives of the assets. The its development can be reliably measured.
useful lives have been determined in order to reflect the
On transition to Ind AS, the Company had elected to
actual usage of the assets.
continue with the carrying value of all of intangible assets
Following are the estimated useful lives: recognized as at 1st April 2015 measured as per the
previous GAAP and use that carrying value as the
Plant & Machinery 7.5-25 years deemed cost of intangible assets.
Roads and Buildings 30 & 60 years
Capitalised development costs are recorded as
Furniture and Fixtures 10 years intangible assets and amortised from the point at which
Vehicles 8 & 10 years the asset is available for use.
Office Equipments 5 years
(ii) Research and development
Laboratory Equipments 10 years
Computer and data processing units 3-6 years Research and Development expenditure that do not
meet the criteria in (i) above are recognized as an
The residual values are not more than 5% of the original expense as incurred. Development costs previously
cost of the asset. The assets’ residual values and useful recognized as an expense are not recognized as an
lives are reviewed, and adjusted if appropriate, at the asset in a subsequent period.
end of each reporting period. An asset’s carrying amount
is written down immediately to its recoverable amount if (iii) Amortization methods and periods
the asset’s carrying amount is greater than its estimated
The Company amortizes intangible assets over a period
recoverable amount.
of 3 years based on their estimated useful lives.
Gains and losses on disposal are determined by
2.14 Trade and Other Payables:
comparing proceeds with carrying amount. These
are included in profit or loss within other income/other These amounts represent liabilities for goods and services
expenses. provided to the company prior to the end of financial year
98

which are unpaid. Trade and other payables are presented as Investment income earned on the temporary investment of
current liabilities unless payment is not due within 12 months specific borrowings pending their expenditure on qualifying
after the reporting period. They are recognized initially at their assets is deducted from the borrowing cost eligible for
fair value and subsequently measured at amortized cost capitalization. Other borrowings costs are expensed in the
using the effective interest method. period in which they are incurred.
2.15 Borrowings: 2.17 Provisions:
Borrowings are initially recognized at fair value, net of Provision for legal claims and volume discounts are recognized
transaction cost incurred. Borrowings are subsequently when the Company has a present legal or constructive
measured at amortized cost. Any difference between the obligation as a result of past events, it is probable that an
proceeds (net of transaction costs) and the redemption outflow of resources will be required to settle the obligation
amount is recognized in profit or loss over the period of the and the amount can be reliably estimated. Provisions are not
borrowings using the effective interest method. Fees paid recognized for future operating losses.
on the establishment of loan facilities are recognized as
Provisions are measured at the present value of management’s
transaction costs of the loan to the extent that it is probable
best estimate of the expenditure required to settle the present
that some or all of the facility will be drawn down. In this
obligation at the end of the reporting period. The discount
case, the fee is deferred until the draw down occurs. To the
rate used to determine the present value is a pre-tax rate
extent there is no evidence that it is probable that some or
that reflects current market assessments of the time value
all the facility will be drawn down, the fee is capitalized as of money and the risks specific to the liability. The increase
a prepayment for liquidity services and amortized over the in the provisions due to the passage of time is recognized
period of the facility to which it relates. as interest expense. Provision for litigation related obligation
represents liabilities that are expected to materialize in respect
Borrowings are removed from the balance sheet when the
of matters in appeal.
obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a 2.18 Employee benefits:
financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non- (i) Short-term obligations
cash assets transferred or liabilities assumed, is recognised
Liabilities for wages and salaries, bonus, ex-gratia etc. that
in profit or loss as other gains/(losses).
are expected to be settled wholly within 12 months after
Borrowings are classified as current liabilities unless the the end of the period in which the employees render the
Company has an unconditional right to defer settlement of related service are recognized in respect of employees’
the liability for at least 12 months after the reporting period. services up to the end of the reporting period and are
Where there is a breach of a material provision of a long-term measured at the amounts expected to be paid when the
loan arrangement on or before the end of the reporting period liabilities are settled. The liabilities are presented as current
with the effect that the liability becomes payable on demand employee benefit obligations in the balance sheet.
on the reporting date, the entity does not classify the liability
(ii) Other long-term employee benefit obligations
as current, if the lender agreed, after the reporting period and
before the approval of financial statements for issue, not to The liabilities for earned leave are not expected to be
demand payment as consequence of the breach. settled wholly within 12 months after the end of the period
in which the employees render the related service. They
2.16 Borrowing Cost:
are therefore measured as the present value of expected
future payments to be made in respect of services
General and specific borrowing costs that are directly attributable
provided by employees up to the end of the reporting
to the acquisition, construction or production of a qualifying
period using the projected unit credit method. The
asset are capitalized during the period of time that is required
benefits are discounted using the market yields at the
to complete and prepare the asset for its intended use or sale.
end of the reporting period that have terms approximating
Qualifying assets are assets that necessarily take a substantial
to the terms of the related obligations. Remeasurements
period of time to get ready for their intended use or sale.
as a result of the experience adjustments and changes
in actuarial assumptions are recognized in profit or loss.
99

The obligations are presented as current liabilities in the In respect of funded post-employment defined
balance sheet if the entity does not have an unconditional benefit plans, amounts due for payment within 12
right to defer settlement for at least twelve months after months to the fund may be treated as ‘current’.
the reporting period, regardless of when the actual Regarding unfunded post-employment benefit
settlement is expected to occur. plans, settlement obligations which are due within
12 months in respect of employees who have
(iii)
Post-employment obligations resigned or expected to resign or are due for
retirement within the next 12 months is ‘current’. The
The Company operates the following post-employment
remaining amount attributable to other employees,
schemes:
who are likely to continue in the services for more
(a) Defined benefit plans-Gratuity obligations than a year, is classified as “non-current”.
The liability or assets recognized in the balance Normally, an actuary should determine the amount
sheet in respect of defined benefit gratuity plans is of current and non-current liability for unfunded
the present value of the defined benefit obligations post-employment benefit obligations.
at the end of the reporting period less the fair value
(b)
Defined contribution plans
of plan assets. The defined benefit obligation is
calculated annually by actuaries using the projected The Company pays provident fund contributions to
unit credit method. publicly administered funds as per local regulations.
The Company has no further payment obligations once
The present value of the defined benefit obligation
the contributions have been paid. The contributions
denominated in INR is determined by discounting
are accounted for as defined contribution plans and
the estimated future cash outflows by reference to
the contributions are recognized as employee benefit
market yields at the end of the reporting period on
expense when they are due.
government bonds that have terms approximating
to the terms of the related obligation. The benefits 2.19 Dividends:
which are denominated in currency other than INR,
the cash flows are discounted using market yields Provision is made for the amount of any dividend declared,
determined by reference to high-quality corporate being appropriately authorized and no longer at the discretion
bonds that are denominated in the currency in of the entity, on or before the end of the reporting period but
which the benefits will be paid, and that have terms not distributed at the end of the reporting period. Proposed
approximating to the terms of the related obligation. dividend is recognised as a liability in the period in which
it is declared by the Company, usually when approved by
The net interest cost is calculated by applying the shareholders in a general meeting, or paid.
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. 2.20 Contributed equity:
This cost is included in employee benefit expense
in the statement of profit and loss. Equity shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
Remeasurement gains and losses arising from shown in equity as a deduction, net of tax, from the proceeds.
experience adjustments and change in actuarial
assumptions are recognized in the period in which 2.21 Earnings per share:
they occur, directly in other comprehensive income.
(i) Basic earnings per share
They are included in retained earnings in the
statement of changes in equity and in the balance Basic earnings per share is calculated by dividing:
sheet.
• The profit attributable to owners of the Company
Changes in the present value of the defined benefit
obligation resulting from plan amendments or • By the weighted average number of equity shares
curtailments are recognized immediately in profit or outstanding during the financial year, adjusted for
loss as past service cost. bonus elements in equity shares issued during
the year.
100

(ii) Diluted earnings per share amount of security deposit, discounted using the market
interest rates for similar instruments.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into Subsequent to initial recognition, the security deposit is
account: measured at amortised cost using the effective interest
method with carrying amount increased over the lease period
• the after income tax effect of interest and other up to the refundable amount. The amount of increase in the
financing costs associated with dilutive potential carrying amount of deposit is recognised as interest income.
equity shares, and The lease repayment is amortised on straight-line basis over
the lease term as lease rentals expense.
• the weighted average number of additional equity
shares that would have been outstanding assuming 2.23 Contingent Liability & Commitments:
the conversion of all dilutive potential equity shares.
Contingent liability is disclosed in the case of:
2.22 Leases:
- a present obligation arising from past events, when
At the inception of a lease, the lease arrangement is classified it is not probable that an outflow of resources will be
as either a finance lease or an operating lease, based on the required to settle the obligation;
substance of the lease arrangement.
- a present obligation arising from past events, when no
As a Lessee: reliable estimate is possible;
Leases of property, plant and equipment where the Company, as - a possible obligation arising from past events, unless the
lessee, has substantially all the risks and rewards of ownership probability of outflow of resources is remote.
are classified as finance leases. Finance leases are capitalised
at the lease's inception at the fair value of the leased property Commitments include the amount of purchase order (net of
or, if lower, the present value of minimum lease payments. The advances) issued to parties for completion of assets.
corresponding rental obligations, net of finance charges, are
included in borrowing or other financial liabilities as appropriate. 2.24 Critical estimates and Judgements:
Each lease payment is allocated between the liability and finance
The preparation of financial statements requires the use of
cost. The finance cost is charged to profit or loss over the lease
accounting estimates, which, by definition, will seldom equal
period so as to produce a constant periodic rate of interest on
the actual results. Management also needs to exercise
the remaining balance of the liability for each period.
judgement in applying the Company's accounting policies.
Leases in which a significant portion of the risks and rewards
This note provides an overview of the areas that involve a
of ownership are not transferred to the Company as lessee
higher degree of judgement or complexity, and of items,
are classified as operating leases. Payments made under
which are more likely to be materially adjusted due to
operating leases (net of any incentives received from lessor)
estimates and assumptions turning out to be different than
are charged to profit or loss on straight-line basis over the
those originally assessed. Detailed information about each of
period of the lease unless the payments are structured to
these estimates and judgements is included in relevant notes
increase in line with expected general inflation to compensate
together with information about the basis of calculation for
for the lessor's expected inflationary cost increases.
each affected line item in the financial statements.
Deposits provided to Lessor:
The areas involving critical estimates or judgements are:
The Company is generally required to pay refundable security
(i) Estimation of current tax expense and payable – refer
deposits in order to obtain property leases from various
note : 32(b)
lessors. Such security deposits are financial assets and are
recorded at fair value on initial recognition. The difference (ii) Estimation of defined benefit obligations- refer note: 18
between the initial fair value and the refundable amount of
deposit is recognised as lease prepayments. The initial fair (iii) Allowance for uncollected accounts receivable and
value is estimated as the present value of the refundable advances. Trade receivables do not carry any interest
and are stated at their nominal value as reduced by
101

appropriate allowances for estimated irrevocable Government grants relating to the purchase of property,
amounts. Individual trade receivables are written off plant and equipment are included in non-current liabilities
when management deems them not to be collectible. as deferred income and are credited to profit or loss on a
Impairment is made on the expected credit losses, straight-line basis over the expected lives of the related
which are the present value of the cash shortfall over the assets and presented within other income.
expected life of the financial assets.
Export entitlements from government authorities are
Estimates and judgements are continually evaluated. They are recognised in the statement of profit and loss as a reduction
based on historical experience and other factors, including from “Cost of materials consumed” when the right to receive
expectations of future events that may have a financial impact credit as per the terms of the scheme is established in respect
on the company and that are believed to be reasonable under of the exports made by the Company, and where there is no
the circumstances. significant uncertainty regarding the ultimate realisation of the
entitlement.
2.25 Government grant:
2.26 Rounding of Amounts:
Grants from the government are recognised at their fair
value where there is a reasonable assurance that the grant All amounts disclosed in the financial statements and notes
will be received and the group will comply with all attached have been rounded off to the nearest lakhs as per the
conditions. requirement of Schedule III, unless otherwise stated.
Government grants relating to income are deferred and

recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to
compensate and presented within other income.
102
Note 3: Property, plant and equipment and Capital Work-in-Progress
Computer
Roads Furniture Capital
Plant and Office Laboratory and data
Land and and Vehicles Total work-in-

Machinery Equipments Equipments processing
Buildings Fixtures progress
units
Year ended March 31, 2018
Gross carrying amount

Opening Gross carrying amount 7,626 1,15,481 42,382 2,963 565 1,580 7,267 810 1,78,674 44,357
Additions 2,591 41,335 10,574 305 131 294 2,538 231 57,999 25,618
Disposals/Transfers - (593) (26) - (13) (1) (6) (639) (57,999)
Closing gross carrying amount 10,217 1,56,223 52,930 3,268 683 1,874 9,804 1,035 2,36,034 11,976
Accumulated depreciation
Opening accumulated depreciation - 17,290 2,901 346 105 323 1,890 249 23,104 -
Depreciation charge during the year - 10,362 1,766 308 82 321 971 187 13,997 -
Disposals - - - - - - - - - -
Closing accumulated depreciation - 27,652 4,667 654 187 644 2,861 436 37,101 -
Net carrying amount as at March 31, 10,217 1,28,571 48,263 2,614 496 1,230 6,943 599 1,98,933 11,976
2018
Opening Gross carrying amount 10,217 1,56,223 52,930 3,268 683 1,874 9,804 1,035 2,36,034 11,976
Additions 4,577 14,948 4,533 142 51 388 1,468 55 26,162 63,393
Disposals / Transfers - (133) - - - - (8) - (141) (26,178)
Depreciation charge during the year - 12,565 2,001 324 83 374 1,068 200 16,615 -
Disposals - - - - - - - - - -
Closing accumulated depreciation - 40,217 6,668 978 270 1,018 3,929 636 53,716 -
Net carrying amount as at March 31, 14,794 1,30,821 50,795 2,432 464 1,244 7,335 454 2,08,339 49,191
2019
Note
(i)
Movable assets are pledged as security
Refer Note 20(a) for information on plant and equipment pledged as security by the company
(ii)
Contractual obligations and other commitments
Refer Note 41 for disclosure of contractual and other commitments for the acquisition of property, plant and equipment
(iii) Assets under construction majorly consist of Roads & Buildings, Plant & Machinery and corresponding internal development costs. During the year, the Company has incurred capital costs of H63,393 on various
projects undertaken as part of expansion plans of its manufacturing facilities at Choutuppal (Unit-1) and near Visakhapatnam (Unit-2) and this includes staff cost of H41 relating to projects team involved in supervision
and monitoring of these projects and cost of power consumed H40.
103

Note 4: Intangible assets
Computer Software
Opening Gross carrying amount 683
Additions 575
Closing gross carrying amount 1,258
Accumulated amortisation
Opening accumulated amortisation 358
Amortisation charges during the year 245
Closing accumulated amortisation 603
Net carrying amount as at March 31, 2018 655
Opening Gross carrying amount 1,258
Additions 16
Amortisation charge during the year 266
Note 5: Non-Current Investments
March 31, 2019 March 31, 2018

(a) (Unquoted, fully paid up)
Investment in equity instruments in subsidiary companies (at cost)
2000 ordinary shares of US$ 0.01 each (March 31,2018:2000) of Divis Laboratories (USA) Inc * 332 332
200 ordinary shares of CHF 500 each (March 31,2018:200), of Divi's Laboratories Europe AG ** 404 404
Investment in equity instruments in other companies (at FVPL)
12000 Equity Shares of H10/- each (March 31, 2018:12000) of Pattan Cheru Enviro Tech 1 1
Limited
Total (equity instrument) 737 737
(b) Investment in Quoted Mutual Funds (at FVPL)
SBI Magnum Ultra Short Duration Fund - Direct Growth
13,12,526 Units @ Fair value of H4,169.4946 per unit 54,725 -
Total (Mutual funds ) 54,725 -
Total Non-Current investments 55,462 737
Aggregate amount of unquoted investments 737 737
Aggregate amount of quoted investments and market value thereof 54,725 -
Aggregate amount of impairment in the value of investment - -
* H87 (2018: H87) included in the cost of investment is on account of fair valuation of interest free loans given to subsidiary.
** H367 (2018: H367) included in the cost of investment is on account of fair valuation of interest free loans given to subsidiary.
104

Note 6: Non-Current Loans
March 31, 2019 March 31, 2018

Security Deposits 3,404 3,394
Total Non-Current Loans 3,404 3,394
Break-up of security details
March 31, 2019 March 31, 2018

Loans considered Good- Secured - -
Loans considered Good - Unsecured 3,404 3,394
Loans which have significant increase in credit risk - -
Loans - credit impaired - -
Total 3,404 3,394
Less: Loss Allowance - -
Total Non-Current Loans 3,404 3,394
Note 7: Income Tax assets(net)
March 31, 2019 March 31, 2018

Advance Tax 77,865 1,57,112
Provision for Income tax (75,937) (1,56,231)
Total Income tax assets (net) 1,928 881
Note 7(a): Movement in Tax
March 31, 2019 March 31, 2018

Opening Net Advance Taxes 881 2,766
Add: Advance tax paid including tax deducted at source 49,372 26,855
Less :Others (refund received) (1,080) -
Less: Adjustments of current tax for prior period (55) -
Less: Current tax provision (47,190) (28,740)
Net Advance Taxes 1,928 881
Note 8: Other non-current assets
March 31, 2019 March 31, 2018

Capital advances 20,024 8,298
Pre-paid expenses 28 22
Other Receivables including indirect tax refund claims 488 491
Total Other non-current assets 20,540 8,811
105

Note 9: Inventories (Valued at lower of cost and net realisable value)
March 31, 2019 March 31, 2018

Raw materials [including stock in transit of H12,875 (March 31, 2018: H7,872)] 51,210 38,631
Work-in-progress 92,849 70,419
Finished goods [including stock in transit of H7,473 (March 31, 2018: 5,540)] 11,338 9,346
Stores and spares 10,921 9,743
Total Inventories 1,66,318 1,28,139
Amounts recognised in profit or loss
Write-down of inventories to net realisable value and provision for slow moving amounted to H4,437 (March 31, 2018 - H4,575) as at the year
end. An amount of H138 was credited to profit or loss (March 31, 2018- H2,662 was charged to profit or loss) and included in 'Changes in value of
inventories of Finished goods and work in progress ' and 'Cost of raw materials consumed' in statement of profit or loss.
Note 10: Current investments
March 31, 2019 March 31, 2018

Units Amount Units Amount
Investment in Quoted Mutual Funds (at FVPL)
SBI-Magnum low duration fund (Daily dividend plan) Fair value@ H1,010.94
(March 31, 2018: H1,008) per unit 1,38,32,033 1,39,834 1,61,37,146 1,62,663
SBI Treasury Advantage Fund (Direct daily dividend plan) Fair value@ H Nil (March
31, 2018: H1,012.33) per unit - - 25,94,596 26,266
Total Current investments 1,39,834 1,88,929
Aggregate amount of quoted investments and market value thereof 139,834 188,929
Aggregate amount of unquoted investments - -
Note 11: Trade receivables
March 31, 2019 March 31, 2018

Trade receivables 1,09,602 96,697
Receivables from related parties (Refer note 39) 18,716 14,692
Less: Loss Allowance 94 178
Total Trade receivables 1,28,224 1,11,211
Current portion 1,28,224 1,11,211
Non-current portion - -

March 31, 2019 March 31, 2018
Trade Receivables considered Good- Secured - -
Trade Receivables considered Good - Unsecured 1,28,224 1,11,211
Trade Receivables which have significant increase in credit risk - -
Trade Receivables - credit impaired 94 178
Total 1,28,318 1,11,389
106

Note 12: Cash and cash equivalents
March 31, 2019 March 31, 2018

Balances with banks - in current accounts 233 407
Cash on hand 61 10
Total cash and cash equivalents* 294 417
*There are no repatriation restrictions with regard to cash and cash equivalents as at the end of reporting period and prior period.
Note 13: Bank balances other than cash and cash equivalents
March 31, 2019 March 31, 2018

Unclaimed dividend 97 83
Balances with banks to the extent held as margin money (towards margin on Letters of Credit - -*
& Bank Guarantees issued by bank etc.)
In Fixed Deposits with maturity of more than three months but less than twelve months 10,129 8,648
(pledged towards Overdraft facilities from banks)
Total Bank balances other than cash and cash equivalents 10,226 8,731
* Amount is below the rounding off norm adopted by the company
Note 14: Current Loans
March 31, 2019 March 31, 2018

Loans to employees 11 17
Loans to a subsidiary (Refer note 39) - 1,469
Total Current Loans 11 1,486
March 31, 2019 March 31, 2018

Loans considered Good - Unsecured 11 1,486
Total 11 1,486
Total Current Loans 11 1,486
Note 15: Other Current Financial assets
March 31, 2019 March 31, 2018

Total Other Current Financial assets 135 948
107

Note 16: Other current assets
March 31, 2019 March 31, 2018

Indirect Taxes- Input Credits 13,021 10,503
Prepaid expenses (including prepaid gratuity, refer note 18) 876 577
Advances to suppliers 5,665 4,026
Total Other current assets 19,707 15,530
Note: Equity share capital and other equity
Note17 (a): Equity share capital
(i) Authorised equity share capital
Number of Amount
shares
As at April 1, 2017 30,00,00,000 6,000
Movement during the year - -
As at March 31, 2018 30,00,00,000 6,000
As at March 31, 2019 30,00,00,000 6,000
(ii) Movements in paid-up equity share capital
Number of Amount
shares
As at April 1, 2017 26,54,68,580 5,309
As at March 31, 2018 26,54,68,580 5,309
As at March 31, 2019 26,54,68,580 5,309
Terms and rights attached to equity shares
- The Company has only one class of equity shares having par value of INR 2 per share. The Company declares and pays dividends in Indian
rupees. 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. The distribution will be in proportion to the number of equity shares held by the shareholders. Every
holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
- Aggregate number of Bonus shares issued during the period of five years immediately preceding the reporting date:
On September 28, 2015, the Company issued 13,27,34,290 equity shares of H2 each as fully paid bonus shares by capitalization of securities
premium reserve.
108

(iii) Details of shareholders holding more than 5% shares in the company
March 31, 2019 March 31, 2018

Number of % holding Number of % holding
shares shares
Promoters Group
Dr.Murali Krishna Prasad Divi 75,67,000 2.85% 1,55,67,000 5.86%
Mr. Satchandra Kiran Divi 5,40,00,000 20.34% 4,60,00,000 17.33%
Mrs. Swarnalatha Divi 1,40,00,000 5.27% 1,40,00,000 5.27%
Ms. Nilima Motaparti 5,40,00,000 20.34% 5,40,00,000 20.34%
Other than Promoters

Reliance Capital Trustee Company Limited 75,11,601 2.83% 1,34,25,419 5.06%
Note 17 (b): Reserves and surplus

March 31, 2019 March 31, 2018
Securities premium reserve 7,988 7,988
General reserve 1,00,000 1,00,000
Retained earnings 5,63,687 4,76,192
Special Economic Zone Re-investment reserve 20,347 6,476
Total Reserves and surplus 6,92,022 5,90,656
(i) There was no movement in Securities premium reserve and General Reserve during the year and previous year. Hence no reconciliation is
required to be given.
(ii) Retained earning

March 31, 2019 March 31, 2018
Opening balance 4,76,192 4,07,694
Net profit for the Year 1,33,265 86,958
Transfer to Special Economic Zone Re-investment reserve (15,900) (8,927)
Utilization of Special Economic Zone Re-investment reserve 2,029 22,351
Dividend (26,547) (26,547)
Corporate Dividend Tax (5,457) (5,404)
Items of other comprehensive income recognised directly in retained earnings:
- Remeasurements of post employment benefit obligation, net of tax 105 67
Closing balance 5,63,687 4,76,192
(iii) Special Economic Zone Re-investment reserve

March 31, 2019 March 31, 2018
Opening balance 6,476 19,900
Transfer from Retained Earnings 15,900 8,927
Utilization of Special Economic Zone Re-investment reserve (2,029) (22,351)
Closing Balance 20,347 6,476
109

Nature and purpose of reserves:
Securities premium reserve:
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
General Reserve:
General Reserves represent amounts transferred from Retained Earnings in earlier years under the provisions of the erstwhile Companies Act, 1956.
Special Economic Zone Re-investment reserve:
Under the SEZ scheme, the unit which begins production of Goods/ services on or after April 1, 2005 will be eligible for deductions of 100% of
profits or gains derived from export of Goods/ services for the first five years, 50% of such profits or gains for a further period of five years and 50%
of such profits or gains for the balance period of five years subject to creation of Special Economic Zone Re-investment reserve out of profit of
eligible SEZ Units and utilisation of such reserve by the company for acquiring new plant and machinery for the purpose of its business as per the
provisions of the Income Tax Act, 1961. (Refer Note 41)
Note 18: Provisions - Employee Benefit Obligations
March 31, 2019 March 31, 2018

Current Non- Total Current Non- Total
Current Current
Compensated Absences 111 1,317 1,428 94 1,495 1,589
Gratuity [refer Note 18(ii)] - - - - -
111 1,317 1,428 94 1,495 1,589
(i)
Compensated Absences obligations:
The Compensated Absences covers the group's liability for earned leave which is classified as other long-term benefits.
(ii)
Post-employment obligations- Gratuity
The Company provides gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for
a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees' last drawn basic salary
per month computed proportionately for 15 days' salary multiplied for the number of years of service. The gratuity plan is a funded plan and the
Company makes contributions to recognised funds in India through an approved trust administered by Life Insurance Corporation of India.
The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:
Present Value Fair Value of Net amount

of obligation Plan Assets
As at April 01, 2017 1,714 1,675 39
Current service cost 309 - 309
Interest expense/(income) 120 115 5
Amount recognized in Statement of profit and loss 429 115 314
Remeasurements
Return on plan assets, excluding amounts included in interest expense/(income) - - -
Actuarial (gain) / loss - 10 (10)
(Gain)/loss from change in demographic assumptions 312 - 312
(Gain)/loss from change in financial assumptions (312) - (312)
Experience (gains)/loss (84) - (84)
110


Amount recognized in other comprehensive income (84) 10 (94)
Amount recognized in total comprehensive income 345 125 220
Employer contributions - 343 (343)
Benefit payments (24) (24) -
As at March 31, 2018 2,035 2,119 (84)

As at April 01, 2018 2,035 2,119 (84)
Interest expense/(income) 157 160 (3)
Remeasurements - - -
Return on plan assets, excluding amounts included in interest expense/ - - -
(income)
Actuarial (gain) / loss - -* -
(Gain)/loss from change in demographic assumptions - - -
(Gain)/loss from change in financial assumptions - - -
Amount recognized in other comprehensive income (141) - (141)
Amount recognized in total comprehensive income 375 160 215
As at March 31, 2019 2,367 2,797 (430)
* Amount is below the rounding off norms adopted by the company
The net liability disclosed above relates to funded and unfunded plans are as follows:
March 31, 2019 March 31, 2018

Present value of funded obligations 2,367 2,035
Fair value of plan assets 2,797 2,119
Deficit/ (Surplus) of funded plans* (430) (84)
* Included under note 16 'Other current assets'
Significant estimates: Actuarial assumptions and sensitivity
The significant actuarial assumptions were as follows:

March 31, 2019 March 31, 2018
Discount rate 7.63% 7.71%
Salary growth rate 6% 6%
Attrition Rate 1% to 3% 1% to 3%
depending on age depending on age
Retirement Age 60 years 60 years
Average Balance Future Services 29 years 29 years
Mortality Table IALM(2006-08) IALM(2006-08)
111

(iii) Sensitivity analysis
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
March 31, 2019 March 31, 2018

Defined Benefit Obligation 2,367 2,035
Increase / (Decrease) in Defined Benefit Obligation:
Discount rate:(% change compared to base due to sensitivity)
Increase : +1% (251) (217)
Decrease: -1% 301 260
Salary Growth rate:(% change compared to base due to sensitivity)
Increase : +1% 273 235
Decrease: -1% (233) (203)
Attrition rate:(% change compared to base due to sensitivity)
Increase : +50% 63 58
Decrease: -50% (74) (69)
Mortality rate:(% change compared to base due to sensitivity)
Increase : +10% 3 3
Decrease: -10% (3) (3)
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to
occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant
actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end
of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet. The methods and
types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(iv) Defined benefit liability and employer contributions
The Company has established a trust to purchase insurance policy to provide for payment of gratuity to the employees. Every year, the insurance
company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result
of such valuation is funded by the Company. The company considers that the contribution rate set at the last valuation date is sufficient to eliminate
the deficit over the agreed period and that regular contributions, which are based on service costs will not increase significantly.
The Company makes contributions to Defined benefit plans for qualifying employees. These Plans are administered through approved Trust, which
operate in accordance with the Trust Deed, Rules and applicable Statutes. The concerned Trust is managed by Trustees who provide strategic
guidance with regard to the management of investments and liabilities and also periodic review of its performance. The trust in turn contributes
to a scheme administered by the Life Insurance corporation of India to discharge gratuity liability to the employees. The trust has not changed
the processes used to manage its risks from previous periods. A large portion of assets consists of government and corporate bonds, although
invested in equities, cash and mutual funds. The plan asset mix is in compliance with the requirements of the respective local regulations.
The major categories of plans assets are as follows:
March 31, 2019 March 31, 2018

Central Government Securities 687 441
State Government Securities 1,188 961
SCD /Bonds 623 583
Equity 180 43
Fixed Deposits 9 77
Others 110 14
2,797 2,119
Contributions to post employment benefit plan for the year ending March 31, 2020 is expected to be H429.
112

The weighted average duration of the defined benefit obligation is 20.94 years ( March 31, 2018 - 20.94 Years ). The expected cash flows over the
next years is as follows:
Less than a Between Between Over Total

year 2-5 years 6-10 years 10 years
March 31, 2019
Defined benefit obligation-gratuity 193 232 513 7,426 8,364
March 31, 2018
(v)
Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:
Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in the value of the liability.
Liquidity Risk: . This is the risk that the company is not able to meet the short term gratuity pay-out. This may arise due to non-availability of enough
cash / cash equivalent to meet the liabilities or holdings illiquid assets not being sold in time.
Salary Escalation Risk: The present value of the defined benefit plans calculated with the assumption of salary increase rate of plan participants in
future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value
obligation will have a bearing on the plan's liability.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the
risk of actual experience turning out to be worse compared to the assumption.
Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time).
There is a risk of change in regulations requiring higher gratuity payouts (eg. Increase in the maximum limit on gratuity.)
Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market
risk for volatilities/fall in interest rate.
Investment Risk: The probability and likelihood of occurrence of losses relative to the expected return on any particular investment.
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under-perform this yield, this
will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. A portion of
the fund is invested in equity securities and in alternative investments which have low correlation with equity securities. The equity securities are
expected to earn a return in excess of the discount rate and contribute to the plan deficit. The company has a risk management strategy where the
aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by rebalancing
the portfolio. The company intends to maintain the investment mix in the continuing years.
Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially off-set by an increase in the value of
the plan's bond holdings.
113

(vi) Defined Contribution plans
Employer's Contribution to Provident Fund: Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per
regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to
the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined
contribution plan is H1,159 (March 31, 2018- H1,032) also refer Note.40(b)
Employer's Contribution to State Insurance Scheme: Contributions are made to State Insurance Scheme for employees at the rate of 4.75%.
The Contributions are made to Employee State Insurance Corporation (ESI) to the respective State Governments of the Company's location.
This Corporation is administered by the Government and the obligation of the company is limited to the amount contributed and it has no further
contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is H287 (March 31, 2018-
H242)
Note 19: Deferred tax liabilities (net)
The balance comprises temporary differences attributable to:
March 31, 2019 March 31, 2018

Deferred Tax Liability / (Asset) :
Property, plant and equipment 23,272 20,594
Employee Benefits (965) (1,018)
Others (189) (307)
Net Deferred tax liabilities / (Asset ) net 22,118 19,269
Movement in Deferred tax liabilities /(Asset)
April 01, 2017 Changes Changes March 31, 2018

through Profit through OCI
and Loss
Property, Plant and equipment 17,173 3,421 - 20,594
Employee benefit expenses (787) (231) - (1,018)
Others (3,383) 3,076 - (307)
April 01, 2018 Changes Changes March 31, 2019

through Profit through OCI
and Loss
Employee benefit expenses (1,018) 17 36 (965)
Others (307) 118 - (189)
114

Note 20: Current borrowings
Maturity Date and Interest rate March 31, 2019 March 31, 2018
Terms of Payment
Loans payable on demand:
Secured from Banks
Working Capital Loans from Banks* Payable on demand 8.65%** 9,470 1,710
Bank Overdrafts* Payable on demand 8.00%# 1,090 4,601
Total Current Borrowings 10,560 6,311
*Represents temporary overdrafts
** 8.35% for year ended March 31, 2018
# 5.25% for year ended March 31, 2018
Secured borrowings and assets pledged as security
Secured by pari-passu first charge on inventories, receivables and other current assets of the company and pari-passu second charge on movable
property, plant and equipment of the company, both present and future. The carrying amounts of financial and non-financial assets pledged as
security for current and non- current borrowings are disclosed in Note 20(a)
Note 20(a): Assets pledged as security
The carrying amounts of Company's assets pledged as security for working capital loans from banks:
March 31, 2019 March 31, 2018

First Charge
Inventory 1,66,318 1,28,139
Accounts receivables 1,28,224 1,11,211
Other Current Assets 1,70,207 2,16,041
4,64,749 4,55,391
Second Charge
Movable assets of the company 1,42,750 1,49,049
Note 20(b): Net Debt reconciliation
This section sets out the changes in liabilities arising from financing activities in the statement of cash flows:
March 31, 2019 March 31, 2018

Cash and cash equivalents (796) (4,184)
Liquid investments 1,39,834 1,88,929
Working Capital Loans (9,470) (1,710)
Net Debt 1,29,568 1,83,035
115

Other assets Liabilities from financing activities

Cash and bank Liquid Current Total
Overdraft Investments Borrowings
Net Debt as at April 01,2017 (1,650) 1,63,072 (1,069) 1,60,353
Cash Flows (2,534) 25,597 (641) 22,422
Foreign Exchange adjustments - - - -
Interest Expense - - 133 133
Interest paid - - (133) (133)
Fair value adjustments - 260 - 260
Net Debt as at March 31, 2018 (4,184) 1,88,929 (1,710) 1,83,035
Net Debt as at April 01, 2018 (4,184) 1,88,929 (1,710) 1,83,035
Cash Flows 3,388 (49,579) (7,760) (53,951)
Interest Expense - - (350) (350)
Interest paid - - 350 350
Net Debt as at March 31, 2019 (796) 1,39,834 (9,470) 1,29,568
Note 21: Trade payables
March 31, 2019 March 31, 2018

Current
Trade Payables -Micro enterprises and small enterprises (Refer Note 42) - -
Trade Payables -Others 48,331 40,565
Total Trade payables 48,331 40,565
Note 22: Other Financial liabilities
March 31, 2019 March 31, 2018

Current
Capital creditors 3,973 2,150
Accrual for rebates / discounts 2,219 -
Total Other Financial liabilities 6,289 2,233
Note 23: Other current liabilities
March 31, 2019 March 31, 2018

Statutory dues payable 621 395
Deferred Revenue Government Grants 35 -
Employee benefits payable 14,397 10,675
Advance from customers 2,908 3,776
Total Other current liabilities 17,961 14,846
116

Note 24: Revenue from operations
For the Year ended For the Year ended

March 31, 2019 March 31, 2018
Sale of products 4,72,784 3,72,220
Sale of Services:
Contract research fee 938 3,099
Other Operating Revenue:
Export incentives 11,691 6,518
Sale of scrap out of manufacturing process 2,553 1,886
Total Revenue from operations 4,87,966 3,83,723
Note 24(a): Reconciliation of Revenue recognised with contract price:
March 31, 2019*

Contract price 4,92,033
Rebates / Discounts (4,067)
Revenue from operations 4,87,966
Note 24(b):Disaggregation of Revenue :
The Group derives revenue from Operations (Sale of Products and services and other operating revenue) at a point of time in the following
geographical areas(based on where products and services are delivered):
March 31, 2019

Region Sale of Products & Other Operating Total Revenue*
Services Revenue
America 1,27,212 - 1,27,212
Asia 59,183 - 59,183
Europe 2,17,452 - 2,17,452
India 56,266 14,244 70,510
Others 13,609 - 13,609
4,73,722 14,244 4,87,966
* As permitted under the transitional provisions in Ind AS 115, the disclosures as of March 31, 2018 are not disclosed.
Note 25: Other income
March 31, 2019 March 31, 2018

Interest income from financial assets at amortized cost 851 674
Dividend income from investments mandatorily measured at fair value through profit or loss 8,406 7,612
Net gain on foreign currency transactions and translations 3,092 2,460
Net gain on financial assets mandatorily measured at fair value through profit or loss 2,625 260
Net gain on sale of investments 97 8
Sale of other scrap 157 231
Provisions / Liabilities no longer required written back 429 3
Government Grants 1 -
Total Other income 15,658 11,248
117

Note 26: Cost of raw materials consumed
March 31, 2019 March 31, 2018

Raw materials at the beginning of the year 38,631 38,198
Add: Purchases 2,20,784 1,52,861
Less: Raw materials at the end of the year 51,210 38,631
Total Cost of raw materials consumed 2,08,205 1,52,428
Note 27: Changes in inventories of finished goods and work-in-progress
March 31, 2019 March 31, 2018

Opening Balance:
Finished goods 9,346 8,433
79,765 77,827
Closing Balance:
1,04,187 79,765
Total Changes in inventories of finished goods and work-in-progress (24,422) (1,938)
Note 28: Employee benefits expense
March 31, 2019 March 31, 2018

Salaries, wages, bonus and other allowances 50,738 42,178
Contribution to provident fund and other funds [also refer note: 40(b)] 1,159 1,032
Contribution to ESI 287 242
Staff welfare expenses 888 1,175
Total Employee benefits expense 53,072 44,627
Note 29: Finance costs
March 31, 2019 March 31, 2018

Interest and finance charges on financial liabilities carried at amortised cost 30 53
Interest on Income tax 183 2
Charges for Letters of Credit / Bank Guarantees 137 78
Total Finance costs 350 133
Note 30: Depreciation and amortisation expense
March 31, 2019 March 31, 2018

Depreciation on property, plant and equipment 16,615 13,997
Amortisation of intangible assets 266 245
Total Depreciation and amortisation expense 16,881 14,242
118

Note 31: Other expenses
March 31, 2019 March 31, 2018

Consumption of stores and spare parts 4,162 3,468
Packing materials consumed 3,859 3,665
Power and fuel 24,866 22,873
Repairs and maintenance- buildings 1,515 1,823
Repairs and maintenance- machinery 7,854 6,458
Repairs and maintenance- others 115 128
Insurance 529 503
Rates and taxes, excluding taxes on income 860 626
Directors' sitting fees 51 39
Printing and stationery 421 457
Rental charges 775 741
Communication expenses 124 130
Travelling and conveyance 1,233 1,382
Vehicle maintenance 117 48
Payments to Auditors - Refer Note 31(a) 52 43
Legal and professional charges 893 4,931
Factory upkeep 250 315
Environment management expenses 1,477 1,373
Advertisement 33 21
Research and development expenses -Refer Note 31(c) 1,060 1,011
Sales commission 665 746
Carriage outward 5,553 5,070
General expenses 3,353 3,078
Provision for doubtful debts [including Write off H62 (2018: H4)]- Refer Note 35(A) 63 61
Donations 1,248 2
Political Contributions 2,000 -
Corporate Social Responsibility expenses -Refer Note 31(b) 2,837 1,698
Loss on disposal / discard of assets 139 626
Bank charges 111 98
Total Other expenses 66,215 61,414
Note 31(a): Details of payments to auditors
March 31, 2019 March 31, 2018

Payments to auditors
For Quarterly Reviews 19 16
Re-imbursement of expenses 3 1
Total Payments to auditors 52 43
119

Note 31 (b): Corporate Social Responsibility Expenditure
March 31, 2019 March 31, 2018

Amount required to be spent as per section 135 of the Act 2,824 2,719
Amount spent during the year on
(i) Construction/acquisition of any asset - -
(ii) On purposes other than (i) above
- Promoting education 1,205 1,035
- Promoting healthcare 52 98
- Rural Development 1,279 304
- Empowering Women 9 9
- Animal Welfare 4 3
- Safe drinking water 145 64
- Environmental sustainability 71 57
- Promotion of rural sports 9 9
- Swatch Bharat programme 6 34
- Support to Differently abled 16 30
- Livelihood Enhancement 1 20
- Others 40 35
Total Corporate Social Responsibility Expenditure 2,837 1,698
Note 31 (c): Research and development expenditure*
March 31, 2019 March 31, 2018

Raw materials consumed 67 51
Contribution to provident and other funds 72 67
Staff welfare expenses 31 28
Stores consumed 259 227
Power and fuel 175 163
Repairs to buildings 41 64
Repairs to machinery 400 267
Repairs to other assets 24 143
Communication expenses 1 -
Travelling and conveyance - 1
Professional and consultancy charges - 4
Miscellaneous expenses 68 30
Total Research and development expenditure 3,489 3,177
* Research and development expenditure to the extent of H2,429 (2018: H2,166) is grouped under employee benefit expenses (consists of Salaries, wages, bonus and other
allowances, contribution to provident and other funds, contribution to ESI and staff welfare expenses) and H1,060 (2018: H1,011) is grouped under other expenses.
120

Note 32: Income tax expense
This note provides an analysis of the Company's income tax expense, showing the amounts that are recognised directly in equity and how the tax
expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company's tax positions.
(a) Income tax expense
March 31, 2019 March 31, 2018

Current tax
Current tax on profits for the year 47,190 28,713
Adjustments for current tax of prior periods 55 -
Total current tax expense 47,245 28,713
Decrease /(Increase) in deferred tax assets 135 2,844
(Decrease) /Increase in deferred tax liabilities 2,678 3,421
Total Deferred tax expense/(benefit) 2,813 6,265
Income tax expense recognised in statement of profit and loss 50,058 34,978
Income tax expense recognised in other comprehensive income 36 27
Total Income tax expense 50,094 35,005
Entire deferred tax for the year ended March 31, 2019 and March 31, 2018 relates to origination and reversal of temporary differences.
(b)
Significant estimates (tax calculation note)
In calculating the tax expense for the current period, the company has treated certain expenditures as deductible and non-deductible based on prior
year completed assessments for tax purposes. The Company benefits from the tax holiday available for units set up under the Special Economic Zone
Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the
unit which begins production of Goods/services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from export
of Goods/services for the first five years, 50% of such profits or gains for a further period of five years and 50% of such profits or gains for the balance
period of five years subject to creation of Special Economic Zone Re-investment out of profit of eligible SEZ Units and utilisation of such reserve by the
company for acquiring new plant and machinery for the purpose of its business as per the provisions of the Income Tax Act, 1961.
(c ) Reconciliation of tax expense and the accounting profit multiplied by India’s tax rate:
March 31, 2019 March 31, 2018

Profit from operations before income tax expenses 1,83,323 1,21,936
Tax at the Indian tax rate of 34.944% (March 31, 2018-34.608%) 64,060 42,200
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Expenses not deductible for tax purpose 1,708 614
Income not considered for tax purpose (15,434) (10,770)
Impact on account of differential tax rates (277) -
Impact due to changes in the tax rate from previous year 192 -
Adjustments for current tax of prior periods 55 -
MAT Credit utilised - 3,107
Others (210) (146)
Income tax expenses 50,094 35,005
The applicable Indian corporate statutory tax rate for the year ended March 31, 2019 and March 31, 2018 is 34.944% and 34.608%, respectively.
The increase in the corporate statutory tax rate to 34.944% is consequent to changes made in the Finance Act, 2018.
121

Financial Instruments and Risk Management
Note 33: Categories of Financial Instruments
March 31, 2019 March 31, 2018

Notes Level Carrying Value / Carrying Value /
Fair Value Fair Value
A. Financial assets
a) Mandatorily measured at fair value through profit or loss
i) Investment in mutual funds 5, 10 1 1,94,559 1,88,929
ii) Investment in equity instruments in other companies 5 3 1 1
Total Financial assets 1,94,560 1,88,930
Note 34: Fair Value Hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price are included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an
instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs
is not based on observable market data, the instrument is included in level 3. This is the case with listed instruments where market is not liquid and
for unlisted instruments.
Valuation technique used to determine fair value:
Specific Valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments.
- the fair value of remaining financial instruments is determined using discounted cash flow analysis.
Valuation Process:
The Finance and Accounts department of the Company performs the valuation of financial assets and liabilities required for financial reporting
purposes, and report to the Board of Directors. The Level 3 inputs for investment in equity shares are derived using the discounted cash flow
analysis.
122

Note 35: Financial Risk Management
The Company's activities expose it to market risk, price risk, liquidity risk and credit risk. The Company emphasizes on risk management and has
an enterprise wide approach to risk management. The Company's risk management and control procedures involve prioritization and continuing
assessment of these risks and devise appropriate controls, evaluating and reviewing the control mechanism.
(A) Credit Risk:
Credit risk management
I. Credit risk on cash and cash equivalents and investments is limited as the Company generally invests in deposits and mutual funds with
nationalised banks, thereby minimising its risk.
II. Credit risk on security deposits, investments, loans given to a subsidiary and trade receivables are evaluated as follows:
Expected credit loss for security deposits and loans:
Basis for recognition of Asset Group

Category
expected credit loss provision
Financial assets for which credit risk has not increased Loss allowance measured at Security Deposits
significantly since initial recognition 12 month expected credit losses Loans to employees
Other Non-Current Financial assets
Other Current Financial assets
March 31, 2019 March 31, 2018

Gross Expected Carrying Gross Expected Carrying
Asset Group carrying credit loss amount carrying credit loss amount
amount at net of amount at net of
default provision default provision
Security Deposits 3,404 - 3,404 3,394 - 3,394
Loans to employees 11 - 11 17 - 17
Loans to a subsidiary - - - 1,469 - 1,469
Other Current Financial assets 135 - 135 948 - 948
Credit risk is the risk of financial loss to the Company if a customer to a financial instrument fails to meet its contractual obligations and arises
primarily from trade receivables, treasury operations etc. Credit risk of the Company is managed at the Company level. In the area of treasury
operations, the Company is presently exposed to risk relating to investment in mutual funds. The Company regularly monitors such investments
and all the investments in mutual funds are held with State Bank of India which is a nationalised bank, thereby minimises the risk.
The credit risk related to trade receivables is influenced mainly by the individual characteristics of each customer. The credit risk is managed by
the company by establishing credit limits and continuously monitoring the credit worthiness of the customer. The Company also provides for
expected credit losses based on the past experience where it believes that there is high probability of default. In general, all trade receivables
greater than 180 days are reviewed and provided for by analysing individual receivables.
123

Following are the Expected credit loss for trade receivables under simplified approach:
March 31, 2019 March 31, 2018

Gross carrying amount of trade receivables 1,28,318 1,11,389
Expected credit losses ( Loss allowance provision) 94 178
Net carrying amount of trade receivables 1,28,224 1,11,211
Expected credit loss for trade receivables under simplified approach as at March 31, 2019.
Not due Outstanding Outstanding Outstanding Total

Ageing FOR < 90 days > 90 days & < FOR > 6 Ms
180 days
Gross carrying amount of trade receivables 94,310 28,461 4,820 727 1,28,318
Provision for doubtful debts (Specific) - - - 79 79
Expected credit losses ( Loss allowance 11 4 -* - 15
provision)
Net carrying amount of trade receivables 94,299 28,457 4,820 648 1,28,224
Reconciliation of Loss Allowance Provision in respect of trade receivables:
Loss Allowance on April 01, 2017 123

Change in Loss Allowance
Add: Current year loss allowance provided 61
Less: Recoveries / Writeback (1)
Less: Bad debts written off (5)
Loss Allowance on March 31, 2018 178
Less: Recoveries / Write back (85)
(B)
Market Risk:
The Company has substantial exposure to foreign currency risk due to the significant exports. Sales to other countries and purchases from overseas
suppliers are exposed to risk associated with fluctuation in the currencies of those countries vis-a-vis the functional currency i.e. Indian rupee. The
Company manages currency fluctuations by having a better geographic balance in revenue mix and ensures a foreign currency match between
liabilities and earnings. The Company believes that the best hedge against foreign exchange risk is to have a good business mix. The Company
is very cautious towards hedging as it has a cost as well as its own risks. The Company continually reassesses the cost structure impact of the
currency volatility and engages with customers addressing such risks.
124

(i) Foreign currency risk exposure:
March 31, 2019 March 31, 2018

Amount Amount Amount Amount
Currency
in Foreign in H in Foreign in H
Currency Currency
Receivables ACU 6 399 2 160
CHF 3 193 3 191
EUR 136 10,602 79 6,346
GBP 154 13,923 141 13,035
USD 1,268 87,725 1,135 73,837
Loan to Subsidiaries CHF - - 21 1,469
Payable to suppliers and services USD (347) (24,036) (314) (20,396)
EUR (5) (396) (6) (474)
JPY (241) (150) - -
CAD -* -* - -
GBP (3) (246) -* (1)
Net Foreign currency exposure Asset/ 88,014 74,167
(Liability)
*Amount is below the rounding off norm adopted by the company
Impact on profit after tax

(Income) / Expense
March 31, 2019 March 31, 2018
USD Sensitivity:
INR/USD -Increase by 1% (414) (344)
INR/USD -Decrease by 1% 414 344
ACU Sensitivity:
INR/ACU -Increase by 1% (3) (1)
INR/ACU -Decrease by 1% 3 1
CHF Sensitivity:
INR/CHF -Increase by 1% (1) (11)
INR/CHF -Decrease by 1% 1 11
EUR Sensitivity:
INR/EUR -Increase by 1% (66) (39)
INR/EUR -Decrease by 1% 66 39
GBP Sensitivity:
INR/GBP -Increase by 1% (89) (83)
INR/GBP -Decrease by 1% 89 83
JPY Sensitivity:
INR/JPY -Increase by 1% 1 -*
INR/JPY -Decrease by 1% (1) -*
125

(ii) Cash Flow and fair value interest rate risk:
Interest rate exposure: The Company does not have long term borrowings and interest rate risk is towards short term working capital borrowings
and fixed deposits. Below is the sensitivity analysis. The analysis presents the cash flow due to the increase/decrease in the interest rates with all
other variables held constant.

(Income) / Expense
March 31, 2019 March 31, 2018
Short term Borrowing:
Interest rate-increase by 100 basis points 69 41
Interest rate-Decrease by 100 basis points (69) (41)
Fixed Deposits:
Interest rate-increase by 100 basis points (66) (57)
Interest rate-Decrease by 100 basis points 66 57
(c)
Price Risk:
The Company is exposed to risk from investments in mutual funds. The company has invested in quoted debt mutual funds with State Bank of India.
The Company is very cautious in their investment decisions and takes a conservative approach of investing in nationalised banks with minimal risk.
The table below summarises the impact of increase/(decrease) in the Net Asset Value(NAV) of these investments
The analysis is based on the assumption that the NAV has (increased)/decreased by 1% with all other variables held constant.

(Income) / Expense
March 31, 2019 March 31, 2018
SBI-Magnum low duration fund (Daily dividend plan)
-Increase in NAV by 1% (1,398) (1,627)
-Decrease in NAV by 1% 1,398 1,627
SBI Treasury Advantage Fund (Direct daily dividend plan)
-Increase in NAV by 1% - (263)
-Decrease in NAV by 1% - 263
-Increase in NAV by 1% (547) -
-Decrease in NAV by 1% 547 -
(d)
Liquidity Risk:
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out
market positions. Company's treasury maintains flexibility in funding by maintaining availability under deposits in banks, adequate limits in the current
accounts etc.
126

(i) Contractual Maturities of financial liabilities:
March 31, 2019

Less than 12 Greater than 12 Total
months months
Current Borrowings 10,560 - 10,560
Trade payables 48,331 - 48,331
Other financial liabilities 6,289 - 6,289
Total 65,180 - 65,180
March 31, 2018

months months
Total 49,109 - 49,109
Note 36: Capital Management
(a) The Company’s financial strategy aims to provide adequate capital for its growth plans for sustained stakeholder value. The company's
objective is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits
for other stakeholders. And depending on the financial market scenario, nature of the funding requirements and cost of such funding, the
Company decides the optimum capital structure. The Company aims at maintaining a strong capital base so as to maintain adequate supply
of funds towards future growth plans as a going concern.
Net debt to Equity ratio
March 31, 2019 March 31, 2018

Net debt 10,560 6311
Total Equity 6,97,331 5,95,965
Net debt to Equity ratio 0.015 0.011
(b) Dividends:
Dividend paid on Equity shares:

March 31, 2019 March 31, 2018
Dividends paid:
Final Dividend 26,547 26,547
Dividend Tax on final Dividend 5,457 5,404
Interim Dividend - -
Proposed dividends* not recognised at the end of the reporting period:
March 31, 2019 March 31, 2018

On Equity Shares of H2 each
Dividend proposed 42,475 26,547
Dividend Tax 8,731 5,457
Dividend per equity share 16 10
*This proposed dividend is subject to approval of shareholders in the ensuing Annual General Meeting
127

Note 37: Segment Information
Description of segments and principal activities
The Chairman and Managing Director has been identified as being the Chief Operating Decision Maker(CODM). Operating segments are defined
as components of an enterprise for which discrete financial information is available. This is evaluated regularly by the CODM, in deciding how to
allocate resources and assessing the Company's performance. The company is engaged in the manufacture of Active Pharmaceutical Ingredients
(API's), Intermediates and Nutraceutical Ingredients and operates in a single operating segment.
The reportable segments have been provided in the Consolidated Financial Statements of the Company and therefore no separate disclosure on
segment information is given in these standalone financial statements.
Note 38: Leases
The Company has operating lease for office premise, which is renewable on a periodical basis and cancellable at its option. Rental expenses for
operating lease recognised in Statement of Profit and Loss for the year is H775 (Previous Year is H741)
Note 39: Related Party Transactions

(a) Subsidiaries : Divis Laboratories (USA) Inc.
: Divi's Laboratories Europe AG.
(b) Key Management personnel(KMP) : Dr. Murali. K. Divi
: Mr. N.V. Ramana
: Mr. D. Madhusudana Rao
: Mr. Kiran S. Divi
: Mrs. Nilima Motaparti
: Mr. K V K Seshavataram
: Mr. R Ranga Rao
: Dr.G Suresh Kumar
: Mrs. S. Sridevi (resigned w.e.f 22.06.2017)
: Dr Ramesh B V Nimmagadda
: Dr S Ganapaty
: Prof. Sunaina Singh (w.e.f 28.03.2019)
(c) Relative of Key Management personnel : Mrs. D. Swarna Latha
: Mr. D. Babu Rajendra Prasad
: Mr. D. Radha Krishna Rao
: Mr.D. Sri Ramachandra Rao
: Mrs. D. Raja Kumari
: Mr. D. Satyasayee Babu
: Mrs. A. Shanti Chandra
: Mrs. N. Nirmala Kumari
: Mrs. N. Chandrika Ramana
: Mr. N.V.Anirudh
: Mrs. N. Monisha
: Mrs. Jhansi Lakshmi Pendyala
: Mr. N. Prashanth
: Mrs. L. Vijaya Lakshmi
(d) Other related party : Divi's Laboratories Employees' Gratuity Trust.
128

Disclosure pursuant to the Regulation 34(3) read with para A of Schedule V to SEBI Listing Regulations, 2015:
Loans and advances in the nature of loans to subsidiaries:
Balances as on Maximum Balance Outstanding

during the year
Name of the entity
March 31, March 31, March 31, March 31,
2019 2018 2019 2018
Divis Laboratories Europe AG - 1,469 1,469 2,382
(e) List of Related Parties over which Control / Significant Influence exists with whom the company has transactions :
Relationship
Divis Laboratories (USA) Inc. Wholly Owned Subsidiary
Divi’s Laboratories Europe AG Wholly Owned Subsidiary
Divi’s Properties Private Limited Company In Which Key Management Personnel have Significant Influence
Divi’s Biotech Private Limited Company In Which Key Management Personnel have Significant Influence
Divi's Laboratories Employees' Gratuity Trust. Post employment benefit plan of Divi's Laboratories Ltd*
*Refer Note No. 18(ii) for information on transactions with post employment benefit plan mentioned above.
(f) Summary of Related Party transactions and balances:
March 31, 2019 March 31, 2018

Amount Outstanding Amount Outstanding
(Transactions) balance as at (Transactions) balance as at
March 31, 2019 March 31, 2018
(i) Managerial Remuneration and short term employee 11,061 10,584 7,631 7,173
benefits to Key Management Personnel -refer 39(g) (i)
(ii) Sitting fees to non-executive directors-refer 39(g) (i) 51 - 39 -
(iii) Dividend paid to Key Management Personnel -refer 11,664 - 11,707 -
39(g) (ii)
(iv) Dividend paid to Relatives of Key Management 1,538 - 1,528 -
Personnel -refer 39(g) (iii )
(v) Salary and Allowances to Relatives of Key Management 13 1 12 1
Personnel - Mr. Anirudh
(vi) Dividend paid to Company in which Key Management 800 - 800 -
Personnel have Significant Influence - M/s Divi's Biotech
Private Limited
(vii) Lease Rent to a Company in which Key Management 775 - 719 -
Personnel have Significant Influence - M/s Divi's
Properties Private Limited
(viii) Rent Deposit to a Company in which Key Management - 319 - 325
Personnel have Significant Influence - M/s Divi's
Properties Private Limited
(ix) Loan/Advance received back from Subsidiary -Divi's 1,373 - 914 1,373
Laboratories Europe AG
(x) Interest receivable on delayed receivables from 54 54 - -
subsidiary- Divi's Laboratories Europe AG
129

March 31, 2019 March 31, 2018

March 31, 2019 March 31, 2018
(xi) Interest receivable on delayed receivables from 49 49 - -
subsidiary- Divis Laboratories (USA) Inc.
(xii) Interest received /receivable on loan to subsidiary- Divi's 96 - 131 96
Laboratories Europe AG
(xiii) Interest received /receivable on loan to subsidiary- Divis - - 32 -
Laboratories (USA) Inc.
(xiv) Sales / Receivable - Subsidiary- Divi's Laboratories 15,017 10,285 6,452 6,551
Europe AG
(xv) Sales / Receivable - Subsidiary- Divis Laboratories 10,454 8,328 6,730 8,141
(USA) Inc.
(xvi) Purchase / payable -Materials from Subsidiary -Divi's 99 - 6 2
Laboratories Europe AG.
Committed future sales to related parties as at the year end: March 31, 2019*
(i) Subsidiary- Divi's Laboratories Europe AG 276
(ii) Subsidiary- Divis Laboratories (USA) Inc. 350
(g) Transactions with Related Parties:
March 31, 2019 March 31, 2018

March 31, 2019 March 31, 2018
(i) Managerial Remuneration and short term
employee benefits to Key Management
Personnel
1. Dr Murali K. Divi 5,881 5,766 4,020 3,906
2. Sri N.V. Ramana 2,990 2,885 2,059 1,955
3. Sri Madhusudana Rao Divi 99 5 99 4
4. Sri Kiran S Divi 2,023 1,925 1,402 1,305
5. Mrs Nilima Motaparti 68 3 51 3
11,061 10,584 7,631 7,173
Sitting fees to non-executive directors
6. Sri K.V.K. Seshavataram 10 - 8 -
7. Dr.G Suresh Kumar 12 - 11 -
8. Sri R Ranga Rao 13 - 11 -
9. Smt S. Sridevi - - 1 -
10. Dr.S. Ganapaty 7 - 3 -
11. Dr. Ramsh B V Nimmagadda 9 - 5 -
51 - 39 -
130

March 31, 2019 March 31, 2018

March 31, 2019 March 31, 2018
(ii) Dividend paid to Key Management Personnel
1. Dr Murali K. Divi 1,557 - 1,557 -
2. Sri Kiran S Divi 4,600 - 4,600 -
3. Mrs Nilima Motaparti 5,400 - 5,400 -
4. Sri Madhusudana Rao Divi 51 - 58 -
5. Sri N.V. Ramana 56 - 92 -
11,664 - 11,707 -
(iii)Dividend paid to Relatives of Key Management
Personnel
1. Mr. Babu Rajendra Prasad Divi 3 - 3 -
2. Mr. Divi Radha Krishna Rao -* - -* -
3. Mr. Sri Ramachandra Rao Divi -* - 5 -
4. Mrs. Jhansilakshmi Pendyala 1 - 1 -
5. Mrs. Divi Swarna Latha 1400 - 1400 -
6. Mrs. Divi Raja Kumari 2 - 2 -
7. Mr. Divi Satyasayee Babu 20 - 36 -
8. Mrs. Shanti Chandra Attaluri 53 - 53 -
9. Mrs. Nimmagadda Nirmala Kumari 8 - 8 -
10. Mrs. N. Chandrika Ramana 9 - -* -
11. Mr. N. Venkata Aniruddh 12 - -* -
12. Mrs. N. Monisha 26 - 15 -
13. Mr. N. Prashanth 4 - 4 -
14. Mrs. L. Vijaya Lakshmi -* - 1 -
1538 - 1528 -
(h) Terms and Conditions
Transactions relating to dividends were on the same terms and conditions that applied to other stake holders.
Note 40: Contingent Liabilities:
March 31, 2019 March 31, 2018

On account of Letter of Credit and Guarantees issued by the bankers. 10,877 11,806
Claims against the Company not acknowledged as debts in respect of:
(i) Disputed demands for excise duty, customs duty, sales tax and service tax for various 782 783
periods
(ii) Income Tax in relation to expenses disallowed in various assessments 18 22
131

Note: (a) It is not practicable for the company to estimate the timings of cash flows, if any, in respect of the above pending resolution of the
respective proceedings.
Note: (b) Provident Fund
The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others
Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284)
dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition
of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees' Provident Funds
& Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the aforesaid matter is not likely
to have a significant impact and accordingly, no provision has been made in these Financial Statements.
Note 41: Commitments
March 31, 2019 March 31, 2018

Property, Plant and Equipment:
(i) Estimated amount of contracts remaining to be executed on capital account and not 46,711 8,803
provided for (Net of advances)
(ii) Capital commitment towards Special Economic Zone Re-investment Obligation 20,347 6,476
Others:
(iii) On account of bonds and / or legal agreements executed with Central Excise/ Customs 24,400 22,400
authorities/ SEZ Development Commissioners
Note 42: Payables to Micro, Small & Medium Enterprises
There are no dues to Micro, Small and Medium Enterprises as at year end. The identification of Micro, Small and Medium Enterprises as defined
under the provisions of "Micro, Small and Medium Enterprises development Act, 2006" is based on management knowledge of their status.
Note 43: Earnings per share
March 31, 2019 March 31, 2018

(a) Basic EPS
Basic earnings per share attributable to the equity holders of the company 50.20 32.76
(b) Diluted EPS
Diluted earnings per share attributable to the equity holders of the company 50.20 32.76
(c) Reconciliation of earnings used in calculating earnings per share
March 31, 2019 March 31, 2018

Basic earnings per share
Profit attributable to the equity holders of the company used in calculating basic earnings per 1,33,265 86,958
share
Diluted earnings per share
Profit attributable to the equity holders of the company used in calculating diluted earnings per 1,33,265 86,958
share
132

(d) Weighted average number of shares used as the denominator
March 31, 2019 March 31, 2018

Weighted average number of equity shares used as the denominator in calculating basic 26,54,68,580 26,54,68,580
earnings per share
Adjustments for calculation of diluted earnings per share: - -
Weighted average number of equity shares used as the denominator in 26,54,68,580 26,54,68,580
calculating diluted earnings per share
Note 44: Changes in Accounting Policies :
The Company applied Ind AS 115 for the first time using the modified retrospective method of adoption with the date of initial application of April
01,2018. Under this method any cumulative effect of initially applying Ind AS 115 can be shown as an adjustment to the opening balance of retained
earnings as at April 01, 2018. The effect on adoption of Ind AS 115 was insignificant and hence, no adjustments were made to opening balance
of retained earnings.
Note 45: Events occurring after the reporting period:
Refer Note 36 for the final dividend recommended by the Board which is subject to the approval of shareholders at the ensuing Annual General
Meeting.
Note 46: Previous year figures have been regrouped /reclassified to conform to current year classification.


133

TO
THE MEMBERS OF
Report on the Audit of the Consolidated Financial

Statements
Opinion Key Audit Matters
1. We have audited the accompanying consolidated financial 4. Key audit matters are those matters that, in our professional
statements of Divi’s Laboratories Limited (hereinafter referred to judgment, were of most significance in our audit of the consolidated
as the “Holding Company”) and its subsidiaries (Holding Company financial statements of the current period. These matters were
and its subsidiaries together referred to as “the Group”) (refer addressed in the context of our audit of the consolidated financial
Note 1 to the attached consolidated financial statements), which statements as a whole, and in forming our opinion thereon, and we
comprise the consolidated Balance Sheet as at March 31, 2019, do not provide a separate opinion on these matters.
the consolidated Statement of Profit and Loss (including Other
Comprehensive Income), the consolidated statement of changes Appropriateness of capitalisation of costs as per Ind AS 16
in equity and the consolidated cash flows Statement for the year Property, Plant and Equipment
then ended, and notes to the consolidated financial statements,
Refer to Note 3 to the consolidated financial statements
including a summary of significant accounting policies and other
explanatory information prepared based on the relevant records During the year, the Holding Company has incurred capital costs
(hereinafter referred to as “the consolidated financial statements”). aggregating to H19,481 lakhs on property, plant and equipment
(representing Plant & Machinery and Roads & Buildings) and H63,393
2. In our opinion and to the best of our information and according to
lakhs on Capital work-in-progress for expansion of its manufacturing
the explanations given to us, the aforesaid consolidated financial
facilities at Choutuppal (Unit-1) and Visakhapatnam (Unit-2).
statements give the information required by the Companies Act,
2013 (“the Act”) in the manner so required and give a true and With regard to the capitalisation of Plant and Machinery, Roads
fair view in conformity with the accounting principles generally and Buildings and Capital work-in-progress, Management of the
accepted in India, of the consolidated state of affairs of the Holding Company has identified certain specific costs incurred for
Group as at March 31, 2019, consolidated total comprehensive staff costs and other overheads relating to each of the assets and
income (comprising of consolidated profit and consolidated other capital work-in-progress and has applied judgement to assess if
comprehensive loss), consolidated changes in equity and its the costs incurred in relation to these assets and capital work-
consolidated cash flows for the year then ended. in-progress meet the recognition criteria of Property, Plant and
Equipment in accordance with Ind AS 16.
Basis for Opinion
This has been determined as a key audit matter due to the
3. We conducted our audit in accordance with the Standards on
significance of the capital expenditure during the year and the risk
Auditing (SAs) specified under section 143(10) of the Act. Our
that the elements of costs that are eligible for capitalisation are not
responsibilities under those Standards are further described in
appropriately capitalised in accordance with the recognition criteria
the Auditor’s Responsibilities for the Audit of the Consolidated
provided in Ind AS 16.
Financial Statements section of our report. We are independent
of the Group in accordance with the ethical requirements that How our audit addressed the key audit matter
are relevant to our audit of the consolidated financial statements
in India in terms of the Code of Ethics issued by ICAI and the We have performed procedures, including the following, in relation
relevant provisions of the Act, and we have fulfilled our other ethical to testing of capitalisation of costs relating to Road and Buildings,
responsibilities in accordance with these requirements. We believe Plant and Machinery and capital work-in-progress:
that the audit evidence we have obtained and the audit evidence
• Understood, evaluated and tested the design and operating
obtained by the other auditors in terms of their reports referred
effectiveness of key controls relating to capitalisation of various
to in sub-paragraph 14 of the Other Matters paragraph below is
costs incurred, including in relation to Plant and Machinery,
sufficient and appropriate to provide a basis for our opinion.
Roads and Buildings and capital work-in-progress.
134
• Tested the direct and indirect costs capitalised, on a sample in equity of the Group in accordance with the accounting principles
basis, with the underlying supporting documents to ascertain generally accepted in India, including the Accounting Standards
nature of costs and basis for allocation, where applicable, specified under section 133 of the Act. The respective Board of
and evaluated whether they meet the recognition criteria Directors of the companies included in the Group are responsible
provided in the Indian Accounting Standard 16, Property, for maintenance of adequate accounting records in accordance with
Plant and Equipment the provisions of the Act for safeguarding the assets of the Group
• Tested, on a sample basis, the employee costs capitalised and for preventing and detecting frauds and other irregularities;
in relation to Plant and Machinery and Roads and Buildings selection and application of appropriate accounting policies;
based on factors such as review of their timesheets. making judgments and estimates that are reasonable and prudent;
and the design, implementation and maintenance of adequate
• Tested other costs debited to Statement of Profit and Loss
internal financial controls, that were operating effectively for ensuring
Account, on a sample basis, to ascertain whether these meet
accuracy and completeness of the accounting records, relevant to
the criteria for capitalisation.
the preparation and presentation of the financial statements that give
• Ensuring adequacy of disclosures in the financial statements a true and fair view and are free from material misstatement, whether
due to fraud or error, which have been used for the purpose of
Our procedures as mentioned above, did not identify any costs
preparation of the consolidated financial statements by the Directors
that had been inappropriately capitalised.
of the Holding Company, as aforesaid.
Other Information
7. In preparing the consolidated financial statements, the respective
5. The Holding Company’s Board of Directors is responsible for the Board of Directors of the companies included in the Group are
other information. The other information comprises the information responsible for assessing the ability of the Group entities to continue
included in the Management Discussion and Analysis, Board’s as a going concern, disclosing, as applicable, matters related to
Report, Business Responsibility Report, performance highlights, going concern and using the going concern basis of accounting
Corporate social responsibility report and Corporate Governance unless management either intends to liquidate the Group or to
Report, but does not include the consolidated financial statements cease operations, or has no realistic alternative but to do so.
and our auditor’s report thereon.
8. The respective Board of Directors of the companies included in
Our opinion on the consolidated financial statements does not the Group are responsible for overseeing the financial reporting
cover the other information and we do not express any form of process of the Group.
assurance conclusion thereon.
Auditor’s Responsibilities for the Audit of the Consolidated
In connection with our audit of the consolidated financial Financial Statements
statements, our responsibility is to read the other information and,
9. Our objectives are to obtain reasonable assurance about whether
in doing so, consider whether the other information is materially
the consolidated financial statements as a whole are free from
inconsistent with the consolidated financial statements or our
material misstatement, whether due to fraud or error, and to
knowledge obtained in the audit or otherwise appears to be
issue an auditor’s report that includes our opinion. Reasonable
materially misstated. If, based on the work we have performed and
assurance is a high level of assurance, but is not a guarantee that
the reports of the other auditors as furnished to us (Refer paragraph
an audit conducted in accordance with SAs will always detect
14 below), we conclude that there is a material misstatement of
a material misstatement when it exists. Misstatements can arise
this other information, we are required to report that fact.
from fraud or error and are considered material if, individually or
We have nothing to report in this regard. in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
Responsibilities of Management and Those Charged with consolidated financial statements.
Governance for the Consolidated Financial Statements
10. As part of an audit in accordance with SAs, we exercise
6. The Holding Company’s Board of Directors is responsible for professional judgment and maintain professional skepticism
the preparation and presentation of these consolidated financial throughout the audit. We also:
statements in term of the requirements of the Act that give a true
and fair view of the consolidated financial position, consolidated • Identify and assess the risks of material misstatement of the
financial performance and consolidated cash flows, and changes consolidated financial statements, whether due to fraud or
135
error, design and perform audit procedures responsive to 11. We communicate with those charged with governance of the
those risks, and obtain audit evidence that is sufficient and Holding Company of which we are the independent auditors
appropriate to provide a basis for our opinion. The risk of regarding, among other matters, the planned scope and timing
not detecting a material misstatement resulting from fraud is of the audit and significant audit findings, including any significant
higher than for one resulting from error, as fraud may involve deficiencies in internal control that we identify during our audit.
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control. 12. We also provide those charged with governance of the Holding
Company with a statement that we have complied with
• Obtain an understanding of internal controls relevant to the relevant ethical requirements regarding independence, and to
audit in order to design audit procedures that are appropriate communicate with them all relationships and other matters that
in the circumstances. Under section 143(3)(i) of the Act, we may reasonably be thought to bear on our independence, and
are also responsible for expressing our opinion on whether where applicable, related safeguards.
the Holding company has adequate internal financial controls
with reference to financial statements in place and the 13. From the matters communicated with those charged with
operating effectiveness of such controls. governance of the Holding Company, we determine those matters
that were of most significance in the audit of the consolidated
• Evaluate the appropriateness of accounting policies used financial statements of the current period and are therefore the key
and the reasonableness of accounting estimates and related audit matters. We describe these matters in our auditor’s report
disclosures made by management. unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine
• Conclude on the appropriateness of management’s use of that a matter should not be communicated in our report because
the going concern basis of accounting and, based on the the adverse consequences of doing so would reasonably
audit evidence obtained, whether a material uncertainty exists be expected to outweigh the public interest benefits of such
related to events or conditions that may cast significant doubt communication.
on the ability of the Group to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to Other Matters
draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures 14. The financial statements of two subsidiaries located outside India,
are inadequate, to modify our opinion. Our conclusions are included in the consolidated financial statements, which constitute
based on the audit evidence obtained up to the date of our total assets of H20,365 lakhs and net assets of H227 lakhs as at
auditor’s report. However, future events or conditions may March 31, 2019, total revenue of H32,230 lakhs, profit of H2,321
cause the Group to cease to continue as a going concern. lakhs (comprising of profit and other comprehensive income)
and net cash outflows amounting to H1,137 lakhs for the year
• Evaluate the overall presentation, structure and content of the then ended have been prepared in accordance with accounting
consolidated financial statements, including the disclosures, principles generally accepted in their respective countries and
and whether the consolidated financial statements represent have been audited by other auditors under generally accepted
the underlying transactions and events in a manner that auditing standards applicable in their respective countries. The
achieves fair presentation. Company’s management has converted the financial statements
of such subsidiaries located outside India from the accounting
• Obtain sufficient appropriate audit evidence regarding the principles generally accepted in their respective countries to
financial information of the entities or business activities within the accounting principles generally accepted in India. We have
the Group to express an opinion on the consolidated financial audited these conversion adjustments made by the Company’s
statements. We are responsible for the direction, supervision management. Our opinion in so far as it relates to the balances
and performance of the audit of the financial statements of and affairs of such subsidiaries located outside India, including
such entities included in the consolidated financial statements other information, is based on the report of other auditors and
of which we are the independent auditors. For the other the conversion adjustments prepared by the management of the
entities included in the consolidated financial statements, Company and audited by us.
which have been audited by other auditors, such other
auditors remain responsible for the direction, supervision and Our opinion on the consolidated financial statements, and our
performance of the audits carried out by them. We remain report on Other Legal and Regulatory Requirements below, is
solely responsible for our audit opinion. not modified in respect of the above matters with respect to our
136
reliance on the work done and the reports of the other auditors Company, none of the directors of the Holding Company is
and the financial statements certified by the Management. disqualified as on March 31, 2019 from being appointed as a
director in terms of Section 164(2) of the Act.
Report on Other Legal and Regulatory Requirements
(f) As there are no subsidiaries incorporated in India, this
15. As required by Section 143(3) of the Act, we report, to the extent report does not contain a separate report on the internal
applicable, that: financial controls with reference to financial statements of
the Group under clause (i) of sub – section 3 of section 143
(a) We have sought and obtained all the information and
of the Act.
explanations, which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid (g) With respect to the other matters to be included in the Auditor’s
consolidated financial statements. Report in accordance with Rule 11 of the Companies (Audit
and Auditor’s) Rules, 2014, in our opinion and to the best of
(b) In our opinion, proper books of account as required by law relating
our information and according to the explanations given to us:
to preparation of the aforesaid consolidated financial statements
have been kept so far as it appears from our examination of those i. The consolidated financial statements disclose the
books and the reports of the other auditors. impact, if any, of pending litigations on the consolidated
financial position of the Group - Refer Note 41 to the
(c) The Consolidated Balance Sheet, the Consolidated
consolidated financial statements.
Statement of Profit and Loss (including other comprehensive
income), Consolidated Statement of Changes in Equity and ii. The Group had long-term contracts as at March 31,
the Consolidated Cash Flow Statement dealt with by this 2019 for which there were no material foreseeable
Report are in agreement with the relevant books of account losses. The Group did not have any derivatives contracts
and records maintained for the purpose of preparation of the as at March 31, 2019.
consolidated financial statements.
iii. There has been no delay in transferring amounts,
(d) In our opinion, the aforesaid consolidated financial statements required to be transferred, to the Investor Education and
comply with the Accounting Standards specified under Protection Fund by the Holding Company during the
Section 133 of the Act. year ended March 31, 2019.
iv. The reporting on disclosures relating to Specified Bank

(e) On the basis of the written representations received from the
Notes is not applicable to the Group for the year ended
directors of the Holding Company as on March 31, 2019
March 31, 2019.
taken on record by the Board of Directors of the Holding

Sunit Kumar Basu

137
Consolidated Balance Sheet

As at As at
Particulars Note
March 31, 2019 March 31, 2018
ASSETS
Non-current assets
Property, plant and equipment 3 2,08,372 1,98,964
Capital work-in-progress 3 49,191 11,976
Intangible assets 4 405 655
Financial assets
(i) Investments 5 54,726 1
(ii) Loans 6 3,404 3,413
Income Tax Assets (Net) 7(a) 1,928 881
Deferred Tax Asset 19(a) 234 103
Other non-current assets 8 20,560 9,080
Total Non-current assets 3,38,820 2,25,073
Current assets
Inventories 9 1,77,234 1,35,067
Financial assets
(i) Investments 10 1,39,834 1,88,928
(ii) Trade receivables 11 1,16,337 1,01,436
(iii) Cash and cash equivalents 12 1,300 2,515
(iv) Bank balances other than (iii) above 13 10,226 8,731
(v) Loans 14 11 17
(vi) Other financial assets 15 135 948
Other current assets 16 19,928 15,870
Total Current assets 4,65,005 4,53,512
TOTAL ASSETS 8,03,825 6,78,585
EQUITY AND LIABILITIES
Equity:
Equity share capital 17(a) 5,309 5,309
Other equity:
(i) Reserves and surplus 17(b) 6,89,623 5,86,248
(ii) Other Equity 783 923
Total Equity 6,95,715 5,92,480
LIABILITIES
Non-current liabilities
Provisions 18 1,317 1,495
Deferred tax liabilities (net) 19(b) 22,118 19,268
Total Non-current liabilities 23,435 20,763
Current liabilities
Financial liabilities
(i) Borrowings 20 10,560 6,311
(ii) Trade payables 21
-Total outstanding dues of micro enterprises and small enterprises - -
-Total outstanding dues of creditors other than micro enterprises and small enterprises 49,226 41,121
(iii) Other financial liabilities 22 6,289 2,233
Provisions 18 111 94
Current Tax liabilities (net) 7(b) 419 270
Other current liabilities 23 18,070 15,313
Total Current liabilities 84,675 65,342
TOTAL LIABILITIES 1,08,110 86,105
TOTAL EQUITY AND LIABILITIES 8,03,825 6,78,585
The accompanying notes are an integral part of the Consolidated financial statements
This is the Consolidated Balance Sheet referred to in our report of even date


138
Consolidated Balance Sheet & Consolidated Statement of Profit and Loss
Consolidated Statement of Profit and Loss

Particulars Note
March 31, 2019 March 31, 2018
Revenue
Revenue from operations 24 4,94,626 3,91,278
Other income 25 15,563 11,344
Total Revenue 5,10,189 4,02,622
Expenses
Cost of raw materials consumed 26 2,10,389 1,52,857
Purchase of Stock-in-trade 2,592 216
Changes in inventories of finished goods, work-in-progress and stock-in-trade 27 (30,459) 333
Excise duty - 2,129
Employee benefits expense 28 54,227 45,606
Depreciation and amortization expense 30 16,890 14,249
Other expenses 31 70,693 63,966
Total Expenses 3,24,682 2,79,489
Profit before tax 1,85,507 1,23,133
Income Tax expense 32
Current tax 47,551 28,983
Profit after tax for the year 1,35,274 87,701
Other Comprehensive Income
(A) Items that will not be reclassified to profit or loss
-Remeasurement of post-employment benefit obligations 141 94
Income tax relating to these items (36) (27)
(B) Items that will be reclassified to profit or loss
-Exchange differences on translation of foreign operations (140) 923
Other Comprehensive Income/(Loss) after tax for the year, net of tax (35) 990
Total Comprehensive Income for the year 1,35,239 88,691
Earnings per share (Par value of H2 each)
-Basic and Diluted 44 50.96 33.04
This is the Consolidated Statement of Profit and Loss referred to in our report of even date


139
Consolidated Statement of Cash Flow


Note
March 31, 2019 March 31, 2018
Cash flow from operating activities
Profit before income tax 1,85,507 1,23,133
Adjustments for:
Depreciation and amortisation expense 30 16,890 14,249
Unrealised foreign exchange loss (net) 2,939 (3,535)
Interest Income 25 (748) (435)
Dividend classified as investing cash flows 25 (8,406) (7,612)
Gain on sale of investments 25 (97) (8)
Provision for doubtful debts 31 339 61
Provisions / Liabilities no longer required written back 25 (429) -
Changes in fair value of mutual funds 25 (2,625) (260)
Loss on disposal / discard of assets 31 139 626
Government grant 25 (1) -
1,93,858 1,26,352
Change in operating assets and liabilities
(Increase) in trade receivables 11 (18,548) (6,908)
(Increase) in inventories 9 (42,167) (2,424)
Increase / (Decrease) in trade payables 21 8,416 (4,127)
Decrease in other non current Loans 6 9 612
Decrease / (Increase) in other non current assets 8 246 (243)
(Increase) /Decrease in Current Loans and other current financial assets 14,15 819 (139)
(Increase) in other current assets 16 (4,058) (8,938)
Payment towards long term employee benefit obligation 18 (22) (35)
Increase in short term employee benefit obligation 18 141 33
Increase/ (Decrease) in other financial liabilities 22 2,219 (439)
Increase in other current liabilities 23 2,961 697
Cash generated from operations 1,43,874 1,04,441
Income taxes paid including withholding tax and net of refunds (48,444) (26,855)
Net cash inflow from operating activities 95,430 77,586
Cash flows from investing activities
Payments for property, plant and equipment (73,307) (27,388)
Proceeds from sale of property, plant and equipment 2 13
Gain on Sale of investments 25 97 8
Payments for purchase of Investments 5,10 (86,404) (74,500)
Proceeds out of sale of Investments 5,10 83,399 48,904
Dividend received 25 8,406 7,612
Interest received 25 654 472
Investment in deposits 13 (1,387) (2,951)
Net cash (outflow) from investing activities (68,540) (47,830)
140


Note
March 31, 2019 March 31, 2018
Cash flows from financing activities
Proceeds from working capital loans 20 7,760 641
Interest paid 29 (350) (133)
Dividends paid to company's shareholders (Including Corporate Dividend tax) (32,004) (31,924)
Net cash inflow / (outflow) from financing activities (24,594) (31,416)
Net increase (decrease) in cash and cash equivalents 2,296 (1,660)
Cash and cash equivalents at the beginning of the financial year (2,086) (426)
Cash and cash equivalents at end of the year 210 (2,086)
Reconciliation of Cash and cash equivalents as per the Cash Flow
Statement
Cash and cash equivalents as per above comprise of the following:
Cash and cash equivalents (Refer Note 12) 1,300 2,515
Bank Overdrafts (Refer Note 20) (1,090) (4,601)
Balances as per Statement of Cash flows 210 (2,086)
1. The Consolidated Cash Flow Statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7)
Statement of Cash Flows.
2. The accompanying notes are an integral part of the Consolidated financial statements.
3. Previous year figures have been regrouped /reclassified to conform to current year classification.
This is the Consolidated Cash Flow Statement referred to in our report of even date


141
Consolidated Statement of Changes in Equity

a. Equity share capital

As at April 01, 2017 26,54,68,580 5,309
As at April 1, 2018 26,54,68,580 5,309
As at March 31, 2019 26,54,68,580 5,309
b. Other Equity
Reserves & surplus

Special Economic General Retained Other Total
Securities
Zone Re-investment reserve earnings reserves Equity
Premium
reserve
Balance at April 1, 2017 7,988 19,900 1,00,000 4,02,542 - 5,30,430
Profit for the year - - - 87,701 87,701
Other comprehensive income for the year, net of - - - 67 923 990
income tax
Total comprehensive income for the year - - - 87,768 923 88,691
owners:
Payment of dividends (including tax) - - - (31,950) - (31,950)
Transfer to Special Economic Zone Re-investment - 8,927 - (8,927) - -
reserve
Utilisation of Special Economic Zone Re-investment - (22,351) - 22,351 - -
reserve
Balance at March 31, 2018 7,988 6,476 1,00,000 4,71,784 923 5,87,171
Balance at April 1, 2018 7,988 6,476 1,00,000 4,71,784 923 5,87,171
Profit for the year - - - 1,35,274 - 1,35,274
Other comprehensive income for the year, net of - - - 105 (140) (35)
Income tax
Total comprehensive income for the year - - - 1,35,379 (140) 1,35,239
owners:
Payment of dividends (including tax) - - - (32,004) - (32,004)
Transfer to Special Economic Zone Re-investment - 15,900 - (15,900) - -
reserve
Utilisation of Special Economic Zone Re-investment - (2,029) - 2,029 - -
reserve
Balance at March 31, 2019 7,988 20,347 1,00,000 5,61,288 783 6,90,406
This is the Consolidated Statement of changes in Equity referred to in our report of even date


142
Consolidated Statement of Changes in Equity & Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements

1. Background: (ii) Historical cost convention
1.1 Divi's Laboratories Limited (“Divi's”), (the 'company') is a company The consolidated financial statements have been
limited by shares, incorporated and domiciled in India. The prepared on a historical cost basis, except for the
Company is engaged in the manufacture of Active Pharmaceutical following:
Ingredients (API's), Intermediates and Nutraceutical ingredients
• Certain financial assets and liabilities that are
with predominance in exports. In addition to generic business,
measured at fair value; (refer accounting policy
the company, through its Custom synthesis business, supports
regarding financial instruments)
innovator pharma companies for their patented products business
right from gram scale requirements for clinical trials to launch as • Defined benefit plans – plan assets measured at fair
well as late life cycle management. The Company is a public value
limited company and the Company’s equity shares are listed
on BSE Limited (BSE) and National Stock Exchange of India (iii) Amended standard adopted by the Group
Limited (NSE) in India. The Company has two subsidiaries i.e.,
Divis Laboratories (USA) Inc., (“Divi’s USA”) incorporated in United The group has applied the following standards and
States of America, Divi’s Laboratories Europe AG (“Divi’s Europe”) amendments for the first time for their annual reporting
incorporated in Switzerland, for marketing the Nutraceutical period commencing 1 April 2018
products (dietary supplements) and pharmaceutical ingredients of
• Ind AS 115, Revenue from contracts with
the Company. Divi’s Laboratories Limited, Divis Laboratories (USA)
customers.
Inc., and Divi’s Laboratories Europe AG are hereinafter referred to
as 'the Group'. • Appendix B, Foreign currency Transactions and
Advance consideration to Ind AS 21. The effects of
1.2 The Consolidated Financial statements are approved for
changes in Foreign Exchange Rates.
issue by the Company’s Board of Directors on May 25, 2019.
The amendments listed above did not have any
2. Significant Accounting Policies significant impact on the amounts recognised in prior
periods and are not expected to significantly affect the
This note provides a list of the significant accounting policies current or future periods.
adopted in the preparation of these consolidated financial
statements. These policies have been consistently applied to all (iv) Principles of Consolidation
the years presented, unless otherwise stated. The consolidated
Subsidiaries
financial statements are for the group consisting of Divi's and its
subsidiaries. Subsidiaries are all entities over which the group has control.
The group controls as entity when the group is exposed to,
2.1 Basis of Preparation:
or has rights to, variable returns from its involvement with
(i) Compliance with Ind AS the entity and has the ability to affect those returns through
its power to direct the relevant activities of the entity.
The consolidated financial statements comply in all Subsidiaries are fully consolidated from the date on which
material aspects with Indian Accounting Standards control is transferred to the group. They are deconsolidated
(Ind AS) notified under section 133 of the Companies from the date the control ceases.
Act, 2013 (the Act) [Companies (Indian Accounting
Standards) Rules, 2015] and other relevant provisions The group combines the financial statements of the
of the Act and guidelines issued by Securities and parent and its subsidiaries line by line adding together like
Exchange Board of India(SEBI). items of assets, liabilities, equity, income and expenses.
Intercompany transactions, balances and unrealised
143

gains on transactions between group companies are • that the entity should assume a tax authority will
eliminated. Unrealised losses are also eliminated unless examine the uncertain tax treatments and have
the transaction provides evidence of an impairment of full knowledge of all related information, i.e. that
the transferred asset. Accounting policies of subsidiaries detection risk should be ignored;
have been changed where necessary to ensure
• that the entity should reflect the effect of the uncertainty
consistency with the policies adopted by the group.
in its income tax accounting when it is not probable
(v) Current and non-current classification that the tax authorities will accept the treatment;
• that the impact of the uncertainty should be

An asset / liability is classified as current if:
measured using either the most likely amount
(a) The amount is expected to be realized or sold or or the expected value method, depending on
consumed in the group’s normal operating cycle; which method better predicts the resolution of the
the liability is expected to be settled in normal uncertainty; and
operating cycle; • that the judgements and estimates made must
(b) Asset / liability is held primarily for the purpose of be reassessed whenever circumstances have
trading; changed or there is new information that affects the
judgements.
(c) Asset / liability is expected to be realized/settled
within twelve months after the reporting period; or The group operates in limited countries and tax
jurisdictions and has substantially completed assessing
(d) The asset is cash or a cash equivalent unless it is
its existing models and processes which it has
restricted from being exchanged or used to settle a
developed to account for tax uncertainties against the
liability for at least twelve months after the reporting
specific guidance in the Appendix C to Ind AS 12 to
period. The liability has no unconditional right to
consider the impact on income tax accounting in respect
defer the settlement of the liability for at least twelve
of its material tax jurisdictions. Basis such assessment,
months after the reporting period.
the application of this guidance is not expected to have
All other assets / liabilities are classified as non-current. material impact on its consolidated financial statements.
The operating cycle is the time between acquisition of Long-term Interests in Associates and Joint
assets for processing and their realization in cash and Ventures – Amendments to Ind AS 28, ‘Investment
cash equivalents. Based on the nature of products and in Associates and Joint Ventures’
time between acquisition of assets for processing and their
The amendments clarify the accounting for long-
realization in cash and cash equivalents, the group has
term interests in an associate or joint venture, which in
ascertained its operating cycle as 12 months for the purpose
substance form part of the net investment in the associate
of current/non-current classification of assets and liabilities.
or joint venture, but to which equity accounting is not
(vi) Recent Accounting Pronouncements: applied. Entities must account for such interests under Ind
AS 109 ‘Financial Instruments’ before applying the loss
Appendix C, Uncertainty over Income Tax allocation and impairment requirements in Ind AS 28.
Treatments, to Ind AS 12, ‘Income Taxes’
Since the group does not have associates or joint
The appendix explains how to recognise and measure ventures, the amendments will not have any impact on
deferred and current income tax assets and liabilities its consolidated financial statements.
where there is uncertainty over a tax treatment. In
particular, it discusses: Prepayment Features with Negative Compensation
– Amendments to Ind AS 109, ‘Financial
• how to determine the appropriate unit of account, Instruments’
and that each uncertain tax treatment should be
considered separately or together as a group, The narrow-scope amendments made to Ind AS 109
depending on which approach better predicts the enable entities to measure certain prepayable financial
resolution of the uncertainty; assets with negative compensation at amortised cost.
144

These assets, which include some loan and debt Ind AS 111, ‘Joint Arrangements’
securities, would otherwise have to be measured at
fair value through profit or loss. To qualify for amortised The amendments clarify that the party obtaining joint
cost measurement, the negative compensation must be control of a business that is a joint operation should
‘reasonable compensation for early termination of the not re-measure its previously held interest in the joint
contract’ and the asset must be held within a ‘held to operation.
collect’ business model.
These amendments will apply to future transactions of
These amendments are not expected to have any the Group in which it obtains joint control of a business
impact on the consolidated financial statements of the on or after 1 April 2019. These amendments do not have
group. any impact on the consolidated financial statements of
the Group.
Plan Amendment, Curtailment or Settlement –
Amendments to Ind AS 19, ‘Employee Benefits’ Amendment to Ind AS 12, Income Taxes
The amendments to Ind AS 19 clarify the accounting The amendments clarify that the income tax
for defined benefit plan amendments, curtailments and consequences of dividends on financial instruments
settlements. They confirm that entities must: classified as equity should be recognised according
to where the past transactions or events that
• calculate the current service cost and net interest generated distributable profits were recognised. These
for the remainder of the reporting period after a plan requirements apply to all income tax consequences of
amendment, curtailment or settlement by using the dividends. Previously, it was unclear whether the income
updated assumptions from the date of the change; tax consequences of dividends should be recognised in
profit or loss, or in equity, and the scope of the existing
• any reduction in a surplus should be recognised guidance was ambiguous.
immediately in profit or loss either as part of past
service cost, or as a gain or loss on settlement. The amendments are effective on or after 1 April 2019
In other words, a reduction in a surplus must be and the Group will apply the amendments for the
recognised in profit or loss even if that surplus was consolidated financial statements prepared on or after 1
not previously recognised because of the impact of April 2019.
the asset ceiling; and
Ind AS 23, ‘Borrowing Costs’
• Separately recognise any changes in the asset
ceiling through other comprehensive income. The amendments clarify that if a specific borrowing
remains outstanding after the related qualifying asset is
These amendments will apply to any future plan ready for its intended use or sale, it becomes part of
amendments, curtailments, or settlements of the group general borrowings.
on or after 1 April 2019. The Group does not have any
impact on account of this amendment. Since the Group does not have qualifying assets,
these amendments do not have any impact on the
Ind AS 103, ‘Business Combinations’ consolidated financial statements of the Group.
The amendments clarify that obtaining control of Ind AS 116, ‘Leases’

a business that is a joint operation, is a business
combination achieved in stages. The acquirer should re- Ind AS 116 was notified by Ministry of Corporate Affairs
measure its previously held interest in the joint operation on 30 March 2019 and it is applicable for annual
at fair value at the acquisition date. reporting periods beginning on or after 1 April 2019.
These amendments will apply to future business Ind AS 116 will affect primarily the accounting by lessees
combinations of the Group for which acquisition date is and will result in the recognition of almost all leases
on or after 1 April 2019. These amendments do not have on balance sheet. The standard removes the current
any impact on the consolidated financial statements of distinction between operating and finance leases and
the Group. requires recognition of an asset (the right-of-use of the
145

leased item) and a financial liability to pay rentals for losses resulting from the settlement of such transactions
virtually all lease contracts. An optional exemption exists and from the translation of monetary assets and liabilities
for short-term and low-value leases. denominated in foreign currencies at year end exchange
rates are generally recognised in statement of profit and
The statement of profit and loss will also be affected
loss. A monetary item for which settlement is neither
because the total expense is typically higher in the earlier
planned nor likely to occur in the foreseeable future is
years of a lease and lower in later years. Additionally,
considered as a part of the entity’s net investment in that
operating expense will be replaced with interest and
foreign operation.
depreciation, so key metrics like EBITDA will change.
Non-monetary items that are measured at fair value in
Operating cash flows will be higher as repayments of
a foreign currency are translated using the exchange
the lease liability and related interest are classified within
rates at the date when the fair value was determined.
financing activities.
Translation differences on assets and liabilities carried
The accounting by lessors will not significantly change. at fair value are reported as part of the fair value gain
Some differences may arise as a result of the new or loss. For example, translation differences on non-
guidance on the definition of a lease. Under Ind AS 116, monetary assets and liabilities such as equity instruments
a contract is, or contains, a lease if the contract conveys held at fair value through profit or loss are recognised
the right to control the use of an identified asset for a in statement of profit and loss as part of the fair value
period of time in exchange for consideration. gain or loss and translation differences on non-monetary
assets such as equity investments classified as FVOCI
The Group in the process of reviewing all of its leasing are recognised in other comprehensive income.
arrangements in light of the new lease accounting rules
in Ind AS 116. The standard will affect primarily the (iii)
Group Companies
accounting for the Group’s operating leases. The Group
The results and financial position of foreign operations
intends to apply simplified transition approach and will
(none of which has the currency of a hyperinflationary
not restate comparative information in the consolidated
economy) that have a functional currency different
financial statements for the year ending 31 March 2020
from the presentation currency are translated into the
to show the impact of adopting Ind AS 116.
presentation currency as follows:
2.2 Segment Reporting:
• assets and liabilities are translated at the closing
Operating segments are reported in a manner consistent rate at the date of that balance sheet
with the internal reporting provided to the Chief Operating
• income and expenses are translated at average
Decision Maker. The Chairman and Managing Director has
exchange rates (unless this is not a reasonable
been identified as being the chief operating decision maker.
approximation of the cumulative effect of the rates
Refer note 38 for the segment information presented.
prevailing on the transaction dates, in which case
2.3 Foreign currency translation: income and expenses are translated at the dates of
the transactions), and
(i) Functional and presentation currency
• All resulting exchange differences are recognised in
Items included in the consolidated financial statements other comprehensive income.
of each of the group's entities are measured using
the currency of the primary economic environment in On consolidation, exchange differences arising from
which the entity operates ('the functional currency'). The the translation of any net investment in foreign entities
consolidated financial statements are presented in Indian are recognised in other comprehensive income. When
rupee (H), which is Divi's (the Company’s) functional and a foreign operation is sold, the associated exchange
presentation currency. differences are reclassified to profit or loss, as part of the
gain or loss on sale.
(ii) Transactions and balances
2.4 Revenue recognition:
Foreign currency transactions are translated into the
functional currency using the exchange rates at the Revenue is measured at fair value of the consideration
dates of the transactions. Foreign exchange gains and received or receivable. Amounts disclosed as revenue are
146

inclusive of excise duty and net of returns, trade allowances, MEIS scrips are freely transferable and can be utilised
rebates, Goods & Service Tax (GST) and amounts collected for the payment of customs duty. MEIS scrips are
on behalf of third parties. recognised either on transfer/sale of such scrips or
when it is reasonably certain that such scrips can be
(i) Revenue from Sale of Goods: utilised against customs duty on imports.
Effective April 1, 2018, the Group adopted Ind AS 115 (iv)
Dividend Income:
“Revenue from Contracts with Customers” using the
modified retrospective method. Also, refer note 44. The Dividends are received from financial assets at fair
following is a summary of new and/or revised significant value through profit or loss and at FVOCI. Dividends
accounting policies related to revenue recognition. are recognised as other income in profit or loss when
Refer Note 2 “Significant Accounting Policies,” in the the right to receive payment is established. This applies
Company’s 2018 Annual Report for the policies in effect even if they are paid out of pre-acquisition profits, unless
for revenue prior to April 1, 2018 the dividend clearly represents a recovery of part of the
cost of the investment.
Revenue from sale of goods is recognized when the
customer obtains control of the Group’s product, which (v)
Interest Income:
occurs at a point in time, usually upon shipment, with
payment terms typically in the range of 60 to 180 days after Interest income from financial assets at fair value through
invoicing depending on product and geographic region. profit or loss is disclosed as interest income within other
The Group elected the practical expedient approach, not income. Interest income on financial assets at amortised
to adjust the amount of consideration for the effects of a cost and financial assets at FVOCI is calculated using the
significant financing component for all instances in which effective interest method and the same is recognised in
the period between payment and transfer of the goods will the statement of profit and loss as part of other income.
be one year or less. Taxes collected from customers relating Interest income is calculated by applying the effective
to product sales and remitted to government authorities are interest rate to the gross carrying amount of a financial
excluded from revenues. asset except for financial assets that subsequently
become credit-impaired. For credit-impaired financial
For contracts with multiple performance obligations, the assets, the effective interest rate is applied to the net
Group allocates the transaction price to each performance carrying amount of the financial asset (after deduction of
obligation based on the relative standalone selling price. the loss allowance).
The Standalone selling price of each performance
obligation is estimated using expected costs of satisfying 2.5 Income Taxes:
such performance obligation and then an appropriate
The income tax expense or credit for the period is the tax
margin is added for such goods or services.
payable on the current period's taxable income based on the
(ii) Revenue from Sale of Services: applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
Revenue from Sale of services is recognised as per the temporary differences and to unused tax losses.
terms of the contracts with customers when the related
services are performed or the agreed milestones are The current income tax charge is calculated on the basis
achieved. of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company
(iii)
Export incentives and its subsidiaries generate taxable income. Management
periodically evaluates positions taken in tax returns with
Export incentives comprise of Duty draw back and MEIS respect to situations in which applicable tax regulation is
(Merchandise Exports Incentive scheme) scrips. subject to interpretation. It establishes provisions, where
appropriate, on the basis of amounts expected to be paid to
Duty drawback is recognised as income when the right
the tax authorities.
to receive credit as per the terms of the scheme is
established in respect of the exports made and where Deferred income tax is provided in full, using the liability
there is no significant uncertainty regarding the ultimate method, on temporary differences arising between the tax
collection of the relevant export proceeds.
147

bases of assets and liabilities and their carrying amounts in against future income tax liability. Accordingly, MAT is recognized
the consolidated financial statements. Deferred income tax is as deferred tax asset in the Balance sheet when the asset can
determined using tax rates (and laws) that have been enacted be measured reliably and it is probable that the future economic
or substantially enacted by the end of the reporting period and benefit associated with the asset will be realized.
are expected to apply when the related deferred income tax
asset is realized or the deferred income tax liability is settled. 2.6 Impairment of assets:
Deferred tax assets are recognised for all deductible Assets are tested for impairment whenever events or changes
temporary differences and unused tax losses only if it is in circumstances indicate that the carrying amount may not be
probable that future taxable amounts will be available to utilize recoverable. An impairment loss is recognised for the amount
those temporary differences and losses. by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's
Deferred tax liabilities are not recognised for temporary fair value less costs of disposal and value in use. For the
differences between the carrying amount and tax bases purposes of assessing impairment, assets are grouped at the
of investments in subsidiaries where the Group is able to lowest levels for which there are separately identifiable cash
control the timing of the reversal of the temporary differences inflows which are largely independent of the cash inflows from
and it is probable that the differences will not reverse in the other assets or groups of assets (cash-generating units).
foreseeable future. Non-financial assets that suffered an impairment are reviewed
for possible reversal of the impairment at the end of each
Deferred tax assets are not recognised for temporary reporting period.
differences between the carrying amount and tax bases of
investments in subsidiaries where it is not probable that the 2.7 Cash and cash equivalents:
differences will reverse in the foreseeable future and taxable
profit will not be available against which the temporary For the purpose of presentation in the statement of cash flows,
difference can be utilized. cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly
Deferred tax assets and liabilities are offset when there is liquid investments with original maturities of three months or
a legally enforceable right to offset current tax assets and less that are readily convertible to known amounts of cash
liabilities and when the deferred tax balances relate to the and which are subject to an insignificant risk of changes in
same taxation authority. Current tax assets and tax liabilities value, and bank overdrafts. Bank overdrafts are shown within
are offset where the entity has a legally enforceable right to borrowings in current liabilities in the balance sheet.
offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously. 2.8 Trade receivables:
Current and deferred tax is recognised in profit or loss, Trade receivables are recognised initially at fair value and
except to the extent that it relates to items recognised in other subsequently measured at amortised cost using the effective
comprehensive income or directly in equity. In this case, the interest method, less provision for impairment, since the
tax is also recognised in other comprehensive income or group holds trade receivables with an objective to collect
directly in equity, respectively. contractual cash flows.
For operations carried out in Special Economic Zones which 2.9 Inventories:
are entitled to tax holiday under the Income tax Act, 1961
Raw materials and stores, work-in-progress, traded and
no deferred tax is recognised in respect of timing differences
finished goods are stated at the lower of cost, calculated
which reverse during the tax holiday period, to the extent
on weighted average basis, and net realizable value. Cost
company’s gross total income is subject to the deduction
of raw materials and stores comprise of costs of purchases.
during the tax holiday period. Deferred tax in respect of
Cost of work-in-progress and finished goods comprises
timing differences which reverse after the tax holiday period is
direct materials, direct labour and an appropriate proportion
recognised in the year in which timing difference originate.
of variable and fixed overhead expenditure, the latter being
Deferred Tax Assets include Minimum Alternative Tax (MAT) allocated on the basis of normal operating capacity. Cost of
paid in accordance with the tax laws in India, which is likely to inventories also include all other costs incurred in bringing the
give future economic benefits in the form of availability of set off inventories to their present location and condition. Costs of
148

purchased inventory are determined after deducting rebates Debt instruments
and discounts. Net realizable value is the estimated selling
price in the ordinary course of business less the estimated Subsequent measurement of debt instruments depends
costs of completion and the estimated costs necessary to on the group's business model for managing the asset
make the sale. Items held for use in the production of inventory and the cash flow characteristics of the asset. There
are not written below cost if the finished product in which these are three measurement categories into which the group
will be incorporated are expected to be sold at or above cost. classifies its debt instruments:
2.10 Investments and other financial assets: Amortised cost: Assets that are held for collection
of contractual cash flows where those cash flows
(i) Classification: represent solely payments of principal and interest are
measured at amortised cost. Interest income from these
The group classifies its financial assets in the following financial assets is included in finance income using the
measurement categories: effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and
• those to be measured subsequently at fair value
presented in other gains/(losses). Impairment losses are
(either through other comprehensive income, or
presented as separate line item in the statement of profit
through profit or loss), and
and loss.
• those measured at amortised cost.
Fair value through other comprehensive income (FVOCI):
The classification depends on the entity's business Assets that are held for collection of contractual cash
model for managing the financial assets and the flows and for selling the financial assets, where the
contractual terms of the cash flows. assets' cash flows represent solely payments of principal
and interest, are measured at fair value through other
For assets measured at fair value, gains and losses will comprehensive income (FVOCI). Movements in the
either be recorded in profit or loss or other comprehensive carrying amount are taken through OCI, except for
income. For investments in debt instruments, this will the recognition of impairment gains or losses, interest
depend on the business model in which the investment revenue and foreign exchange gains and losses which
is held. For investments in equity instruments, this will are recognised in profit and loss. When the financial
depend on whether the group has made an irrevocable asset is derecognised, the cumulative gain or loss
election at the time of initial recognition to account previously recognised in OCI is reclassified from equity
for the equity investment at fair value through other to profit or loss and recognised in other gains/(losses).
comprehensive income. The group reclassifies debt Interest income from these financial assets is included in
investments when and only when its business model for other income using the effective interest rate method.
managing those assets changes.
Fair value through profit or loss: Assets that do not meet
(ii)
Recognition the criteria for amortised cost or FVOCI are measured
at fair value through profit or loss. A gain or loss on a
Purchases and sale of financial assets are recognised
debt investment that is subsequently measured at fair
on trade date, the date on which the group commits to
value through profit or loss and is not part of a hedging
purchase or sale the financial assets.
relationship is recognised in profit or loss and presented
(iii)
Measurement net in the statement of profit and loss within other gains/
(losses) in the period in which it arises. Interest income
At initial recognition, the group measures a financial asset from these financial assets is included in other income.
at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs that Equity instruments
are directly attributable to the acquisition of the financial
Subsequent measurements of all equity investments are
asset. Transaction costs of financial assets carried at fair
done at fair value. Where the group's management has
value through profit or loss are expensed in profit or loss.
elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no
149

subsequent reclassification of fair value gains and losses the asset is continued to be recognised to the extent of
to profit or loss. Dividends from such investments are continuing involvement in the financial asset.
recognised in profit or loss as other income when the
group's right to receive payments is established. 2.11 Offsetting financial instruments:
Changes in the fair value of financial assets at fair value Financial assets and liabilities are offset and the net amount
through profit or loss are recognised in other income in is reported in the balance sheet where there is a legally
the statement of profit and loss. Impairment losses (and enforceable right to offset the recognized amounts and there is
reversal of impairment losses) on equity investments an intention to settle on a net basis or realize the asset and settle
measured at fair value are not reported separately from the liability simultaneously. The legally enforceable right must not
other changes in fair value. be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency
(iv) Impairment of financial assets or bankruptcy of the group or the counterparty.
The group assesses on a forward looking basis, the 2.12 Property, Plant & Equipment:
expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The Freehold land is carried at historical cost. All other items of
impairment methodology applied depends on whether property, plant and equipment are stated at historical cost less
there has been a significant increase in credit risk. Note depreciation. Historical cost includes expenditure that is directly
35 details how the group determines whether there has attributable to the acquisition of the items. On transition to Ind
been a significant increase in credit risk. AS, the group had elected to continue with the carrying value of
all its property, plant and equipment recognized as at 1st April
For trade receivables only, the group applies the 2015 measured as per the previous GAAP and use that carrying
simplified approach permitted by Ind AS 109 Financial value as the deemed cost of the property, plant and equipment.
Instruments, which requires expected lifetime losses to
be recognised from initial recognition of the receivables. Subsequent costs are included in the asset’s carrying amount
or recognized as a separate asset, as appropriate, only when
(v) Derecognition of financial assets it is probable that future economic benefits associated with
the item will flow to the group and the cost of the item can
A financial asset is derecognized only when be measured reliably. The carrying amount of any component
accounted for as separate asset is derecognized when
• the group has transferred the rights to receive cash
replaced. All other repairs and maintenance are charged
flow from the financial asset or
to profit or loss during the reporting period in which they are
• retains the contractual rights to receive the cash incurred.
flows of the financial assets, but assumes a
Capital work-in-progress includes cost of property, plant and
contractual obligation to pay cash flows to one or
equipment under installation/development as at the balance
more recipients.
sheet date.
Where the entity has transferred an asset, the group
(i) Depreciation methods, estimated useful lives and
evaluates whether it has transferred substantially all
residual value
risks and rewards of ownership of the financial asset.
In such cases, the financial asset is derecognized. Depreciation on Property, Plant & Equipment is provided
Where the entity has not transferred substantially all on straight-line basis to allocate their cost, net of residual
risks and rewards of ownership, the financial asset is not value over the estimated useful lives of the assets. The
derecognized. useful lives have been determined in order to reflect the
actual usage of the assets.
Where the entity has neither transferred a financial asset
nor retains substantially all risks and rewards of ownership Following are the estimated useful lives:
of the financial asset, the financial asset is derecognised
if the group has not retained control of the financial asset. Plant & Machinery 7.5-25 years
Where the group retains control of the financial asset, Roads and Buildings 30 & 60 years
150

Furniture and Fixtures 10 – 15 years Capitalised development costs are recorded as
Vehicles 8-10 years intangible assets and amortised from the point at which
the asset is available for use.
Office Equipments 5 years
Laboratory Equipments 10 – 21 years (ii) Research and development
Computer and data processing units 3-6 years
Research and Development expenditure that do not
The residual values are not more than 5% of the original meet the criteria in (i) above are recognized as an
cost of the asset. The assets’ residual values and useful expense as incurred. Development costs previously
lives are reviewed, and adjusted if appropriate, at the recognized as an expense are not recognized as an
end of each reporting period. An asset’s carrying amount asset in a subsequent period.
is written down immediately to its recoverable amount if
(iii) Amortization methods and periods
the asset’s carrying amount is greater than its estimated
recoverable amount. The group amortizes intangible assets over a period of 3
years based on their estimated useful lives.
Gains and losses on disposal are determined by
comparing proceeds with carrying amount. These are 2.14 Trade and Other Payables:
included in profit or loss within other income.
These amounts represent liabilities for goods and services
2.13 Intangible Assets: provided to the group prior to the end of financial year which
are unpaid. Trade and other payables are presented as
(i) Computer software
current liabilities unless payment is not due within 12 months
Costs associated with maintaining software are after the reporting period. They are recognized initially at their
recognised as an expense as incurred. Development fair value and subsequently measured at amortized cost
costs that are directly attributable to the design and using the effective interest method.
testing of identifiable and unique software products
2.15 Borrowings:
controlled by the group are recognised as intangible
assets when the following criteria are met: Borrowings are initially recognized at fair value, net of
transaction cost incurred. Borrowings are subsequently
- it is technically feasible to complete the software so
measured at amortized cost. Any difference between the
that it will be available for use
proceeds (net of transaction costs) and the redemption
- management intends to complete the software and amount is recognized in profit or loss over the period of the
use or sell it borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognized as
- there is an ability to use or sell the software transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this
- it can be demonstrated how the software will case, the fee is deferred until the draw down occurs. To the
generate probable future economic benefits extent there is no evidence that it is probable that some or
all the facility will be drawn down, the fee is capitalized as
- adequate technical, financial and other resources
a prepayment for liquidity services and amortized over the
to complete the development and to use or sell the
period of the facility to which it relates.
software are available and;
Borrowings are removed from the balance sheet when the
- the expenditure attributable to the software during
obligation specified in the contract is discharged, cancelled
its development can be reliably measured.
or expired. The difference between the carrying amount of a
On transition to Ind AS, the group had elected to financial liability that has been extinguished or transferred to
continue with the carrying value of all of intangible assets another party and the consideration paid, including any non-
recognized as at 1st April 2015 measured as per the cash assets transferred or liabilities assumed, is recognised
previous GAAP and use that carrying value as the in profit or loss as other gains/(losses).
deemed cost of intangible assets.
151

Borrowings are classified as current liabilities unless the group after the end of the period in which the employees
has an unconditional right to defer settlement of the liability for render the related service are recognized in respect
at least 12 months after the reporting period. Where there is a of employees’ services up to the end of the reporting
breach of a material provision of a long-term loan arrangement period and are measured at the amounts expected to
on or before the end of the reporting period with the effect that be paid when the liabilities are settled. The liabilities are
the liability becomes payable on demand on the reporting date, presented as current employee benefit obligations in the
the entity does not classify the liability as current, if the lender balance sheet.
agreed, after the reporting period and before the approval of
(ii) Other long-term employee benefit obligations
consolidated financial statements for issue, not to demand
payment as consequence of the breach. The liabilities for earned leave are not expected to be
settled wholly within 12 months after the end of the period
2.16 Borrowing Cost:
in which the employees render the related service. They
General and specific borrowing costs that are directly attributable are therefore measured as the present value of expected
to the acquisition, construction or production of a qualifying future payments to be made in respect of services
asset are capitalized during the period of time that is required provided by employees up to the end of the reporting
to complete and prepare the asset for its intended use or sale. period using the projected unit credit method. The
Qualifying assets are assets that necessarily take a substantial benefit are discounted using the market yields at the end
period of time to get ready for their intended use or sale. of the reporting period that have terms approximating to
the terms of the related obligations. Remeasurements as
Investment income earned on the temporary investment of a result of the experience adjustments and changes in
specific borrowings pending their expenditure on qualifying actuarial assumptions are recognized in profit or loss.
assets is deducted from the borrowing cost eligible for
The obligations are presented as current liabilities in the
capitalization. Other borrowings costs are expensed in the
balance sheet if the entity does not have an unconditional
period in which they are incurred.
right to defer settlement for at least twelve months after
2.17 Provisions: the reporting period, regardless of when the actual
settlement is expected to occur.
Provision for legal claims and volume discounts are
recognized when the group has a present legal or constructive (iii)
Post-employment obligations
obligation as a result of past events, it is probable that an
The group operates the following post-employment
outflow of resources will be required to settle the obligation
schemes:
and the amount can be reliably estimated. Provisions are not
recognized for future operating losses. (a) Defined benefit plans-Gratuity obligations
Provisions are measured at the present value of management’s The liability or assets recognized in the balance sheet
best estimate of the expenditure required to settle the present in respect of defined benefit gratuity plans is the
obligation at the end of the reporting period. The discount present value of the defined benefit obligations at the
rate used to determine the present value is a pre-tax rate end of the reporting period less the fair value of plan
that reflects current market assessments of the time value assets. The defined benefit obligation at the end of
of money and the risks specific to the liability. The increase the reporting period less the fair value of plan assets.
in the provisions due to the passage of time is recognized The defined benefit obligation is calculated annually
as interest expense. Provision for litigation related obligation by actuaries using the projected unit credit method.
represents liabilities that are expected to materialize in respect
The present value of the defined benefit obligation
of matters in appeal.
denominated in INR is determined by discounting
2.18 Employee benefits: the estimated future cash outflows by reference to
market yields at the end of the reporting period on
(i) Short-term obligations government bonds that have terms approximating
to the terms of the related obligation. The benefits
Liabilities for wages and salaries, bonus, ex-gratia etc.
which are denominated in currency other than INR,
that are expected to be settled wholly within 12 months
the cash flows are discounted using market yields
152

determined by reference to high-quality corporate 2.19 Dividends:
bonds that are denominated in the currency in
which the benefits will be paid, and that have terms Provision is made for the amount of any dividend declared,
approximating to the terms of the related obligation. being appropriately authorized and no longer at the discretion
of the entity, on or before the end of the reporting period but
The net interest cost is calculated by applying the not distributed at the end of the reporting period. Proposed
discount rate to the net balance of the defined dividend is recognised as a liability in the period in which
benefit obligation and the fair value of plan assets. it is declared by the group, usually when approved by
This cost is included in employee benefit expense shareholders in a general meeting, or paid.
in the statement of profit and loss.
2.20 Contributed equity:
Remeasurement gains and losses arising from
experience adjustments and change in actuarial Equity shares are classified as equity. Incremental costs
assumptions are recognized in the period in which directly attributable to the issue of new shares or options are
they occur, directly in other comprehensive income. shown in equity as a deduction, net of tax, from the proceeds.
They are included in retained earnings in the statement
of changes in equity and in the balance sheet. 2.21 Earnings per share:
Changes in the present value of the defined benefit (i) Basic earnings per share
obligation resulting from plan amendments or
Basic earnings per share is calculated by dividing:
curtailments are recognized immediately in profit or
loss as past service cost. • the profit attributable to owners of the group
In respect of funded post-employment defined • By the weighted average number of equity shares
benefit plans, amounts due for payment within 12 outstanding during the financial year, adjusted for bonus
months to the fund may be treated as ‘current’. elements in equity shares issued during the year.
Regarding unfunded post-employment benefit
plans, settlement obligations which are due within 12 (ii) Diluted earnings per share
months in respect of employees who have resigned
or expected to resign or are due for retirement Diluted earnings per share adjusts the figures used in the
within the next 12 months is ‘current’. The remaining determination of basic earnings per share to take into
amount attributable to other employees, who are account:
likely to continue in the services for more than a year,
• the after income tax effect of interest and other
is classified as “non-current”.
financing costs associated with dilutive potential
Normally, an actuary should determine the amount equity shares, and
of current and non-current liability for unfunded
• the weighted average number of additional equity
post-employment benefit obligations.
shares that would have been outstanding assuming
(b) Defined contribution plans the conversion of all dilutive potential equity shares.
The group pays provident fund contributions to 2.22 Leases:

publicly administered funds as per local regulations.
The group has no further payment obligations once At the inception of a lease, the lease arrangement is classified
the contributions have been paid. The contributions as either a finance lease or an operating lease, based on the
are accounted for as defined contribution plans substance of the lease arrangement.
and the contributions are recognized as employee
As a Lessee:
benefit expense when they are due.
Leases of property, plant and equipment where the group,
Termination benefits in the nature of voluntary
as lessee, has substantially all the risks and rewards of
retirement benefits are recognised in the Statement
ownership are classified as finance leases. Finance leases
of Profit and Loss as and when incurred.
153

are capitalised at the lease's inception at the fair value of the - a present obligation arising from past events, when no
leased property or, if lower, the present value of minimum reliable estimate is possible;
lease payments. The corresponding rental obligations, net of
finance charges, are included in borrowing or other financial - a possible obligation arising from past events, unless the
liabilities as appropriate. Each lease payment is allocated probability of outflow of resources is remote.
between the liability and finance cost. The finance cost
Commitments include the amount of purchase order (net of
is charged to profit or loss over the lease period so as to
advances) issued to parties for completion of assets.
produce a constant periodic rate of interest on the remaining
balance of the liability for each period. 2.24 Critical estimates and Judgements:
Leases in which a significant portion of the risks and rewards The preparation of consolidated financial statements requires
of ownership are not transferred to the group, as lessee, the use of accounting estimates which, by definition, will
are classified as operating leases. Payments made under seldom equal the actual results. Management also needs
operating leases (net of any incentives received from lessor) to exercise judgement in applying the group's accounting
are charged to profit or loss on straight-line basis over the policies.
period of the lease unless the payments are structured to
increase in line with expected general inflation to compensate This note provides an overview of the areas that involved a
for the lessor's expected inflationary cost increases. higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates and
Deposits provided to Lessor: assumptions turning out to be different than those originally
assessed. Detailed information about each of these estimates
The group is generally required to pay refundable security
and judgements is included in relevant notes together with
deposits in order to obtain property leases from various
information about the basis of calculation for each affected
lessors. Such security deposits are financial assets and are
line item in the consolidated financial statements.
recorded at fair value on initial recognition. The difference
between the initial fair value and the refundable amount of The areas involving critical estimates or judgements are:
deposit is recognised as lease prepayments. The initial fair
value is estimated as the present value of the refundable (i) Estimation of current tax expense and payable – refer
amount of security deposit, discounted using the market note : 32(b)
interest rates for similar instruments.
(ii) Estimation of defined benefit obligations- refer note: 18
Subsequent to initial recognition, the security deposit is
(iii) Allowance for uncollected accounts receivable and
measured at amortised cost using the effective interest
advances. Trade receivables do not carry any interest
method with carrying amount increased over the lease period
and are stated at their nominal value as reduced by
up to the refundable amount. The amount of increase in the
appropriate allowances for estimated irrevocable
carrying amount of deposit is recognised as interest income.
amounts. Individual trade receivables are written off
The lease repayment is amortised on straight-line basis over
when management deems them not to be collectible.
the lease term as lease rentals expense.
Impairment is made on the expected credit losses,
2.23 Contingent Liability & Commitments: which are the present value of the cash shortfall over the
expected life of the financial assets.
Contingent liability is disclosed in the case of:
Estimates and judgements are continually evaluated. They are
- a present obligation arising from past events, when it is based on historical experience and other factors, including
not probable that an outflow of resources will be required expectations of future events that may have a financial impact
to settle the obligation; on the group and that are believed to be reasonable under
the circumstances.
154

2.25 Government grant: Export entitlements from government authorities are
recognised in the statement of profit and loss as a reduction
Grants from the government are recognised at their fair from “Cost of materials consumed” when the right to receive
value where there is a reasonable assurance that the grant credit as per the terms of the scheme is established in
will be received and the group will comply with all attached respect of the exports made by the group, and where there is
conditions. no significant uncertainty regarding the ultimate realisation of
the entitlement.
Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary 2.26 Rounding of Amounts:
to match them with the costs that they are intended to
compensate and presented within other income. All amounts disclosed in the consolidated financial statements
and notes have been rounded off to the nearest lakhs as per
Government grants relating to the purchase of property, the requirement of Schedule III, unless otherwise stated.
plant and equipment are included in non-current liabilities
as deferred income and are credited to profit or loss on a
straight-line basis over the expected lives of the related
assets and presented within other income.
155
156
Note 3: Property, plant and equipment and Capital Work-in-Progress
Computer
Roads Furniture Capital
Plant and Office Laboratory and data
Land and and Vehicles Total work-in-
Machinery Equipments Equipments processing
Buildings Fixtures progress
units

Opening Gross carrying amount 7,626 1,15,481 42,382 2,972 565 1,586 7,267 832 1,78,711 44,357
Additions 2,591 41,335 10,574 308 131 298 2,538 241 58,016 25,618
Disposals/Transfers - (593) (26) (1) (13) (2) (1) (4) (640) (57,999)
Depreciation charge during the year - 10,362 1,766 310 82 322 971 191 14,004 -
Disposals - - - - - - - - - -
Closing accumulated depreciation - 27,652 4,667 659 187 647 2,861 450 37,123 -
Net carrying amount as at March 31, 2018 10,217 1,28,571 48,263 2,620 496 1,235 6,943 619 1,98,964 11,976
Opening Gross carrying amount 10,217 1,56,223 52,930 3,279 683 1,882 9,804 1,069 2,36,087 11,976
Additions 4,577 14,948 4,533 146 51 389 1,468 61 26,173 63,393
Disposals / Transfers - (133) - - - - (8) - (141) (26,178)
Depreciation charge during the year - 12,565 2,001 327 83 375 1,068 205 16,624 -
Disposals - - - - - - - - - -
Closing accumulated depreciation - 40,217 6,668 986 270 1,022 3,929 655 53,747 -
Net carrying amount as at March 31, 2019 14,794 1,30,821 50,795 2,439 464 1,249 7,335 475 2,08,372 49,191
Note
(i)
Movable assets are pledged as security
Refer Note 20(a) for information on plant and equipment pledged as security by the company
(ii)
Contractual obligations and other commitments
Refer Note 42(a) for disclosure of contractual and other commitments for the acquisition of property, plant and equipment
(iii) Assets under construction majorly consist of Roads & Buildings, Plant & Machinery and corresponding internal development costs. During the year, the Company has incurred capital costs of H63,393 on various
projects undertaken as part of expansion plans of its manufacturing facilities at Choutuppal (Unit-1) and near Visakhapatnam (Unit-2) and this includes staff cost of H41 relating to projects team involved in supervision
and monitoring of these projects and cost of power consumed H40.

Note 4: Intangible assets
Computer Software
Opening Gross carrying amount 683
Additions 575
Amortisation charges during the year 245
Opening Gross carrying amount 1,258
Additions 16
Amortisation charge during the year 266
Note 5: Non-Current Investments
March 31, 2019 March 31, 2018

(Un quoted, fully paid up)
(a) Investment in equity instruments in other companies (at FVPL)
12000 Equity Shares of H10/- each of Pattan Cheru Enviro Tech Limited 1 1
Total (equity instrument) 1 1
(b) Investment in Quoted Mutual Funds (at FVPL)
13,12,526 Units @ Fair value of H4169.4946 per unit 54,725 -
Total (Mutual Funds) 54,725 -
Total Non-Current investments 54,726 1
Aggregate amount of unquoted investments 1 1
Aggregate amount of quoted investments and market value thereof 54,725 -
Aggregate amount of impairment in the value of investment - -
157

Note 6: Non-Current Loans
March 31, 2019 March 31, 2018

Security Deposits 3,404 3,413
Total Non Current Loans 3,404 3,413
March 31, 2019 March 31, 2018

Loans considered Good - Unsecured 3,404 3,413
Total 3,404 3,413
Total Non Current Loans 3,404 3,413
Note 7(a): Income Tax assets (Net)
March 31, 2019 March 31, 2018

Advance Taxes 77,865 1,57,112
Provision for Income tax (75,937) (1,56,231)
Total Income Tax assets (Net) 1,928 881
Note 7(a) (i): Movement in Tax
March 31, 2019 March 31, 2018

Opening Net Advance Taxes 881 2,766
Add: Advance tax paid including tax deducted at source 49,372 26,855
Less :Others (refund received) (1,080) -
Less: Current tax provision (47,190) (28,740)
Net Advance Taxes 1,928 881
Note 7(b): Current Tax Liabilities (net)
March 31, 2019 March 31, 2018

Advance Taxes - -
Provision for Income tax 419 270
Total Income Tax assets (Net) 419 270
158

Note 7(b)(i): Movement in Tax
March 31, 2019 March 31, 2018

Opening Income Tax Liability 270 -
Less: Tax Paid during current Period (152) -
Add: Current tax provision 424 270
Current Tax Liabilities (net) 419 270
Note 8: Other non-current assets
March 31, 2019 March 31, 2018

Capital advances 20,024 8,298
Pre-paid expenses 28 292
Total Other non-current assets 20,560 9,080
Note 9: Inventories (Valued at lower of cost and net realisable value)
March 31, 2019 March 31, 2018

Raw materials [including stock in transit of H12,875 (March 31, 2018: H7,872)] 51,957 39,389
Finished goods [including stock in transit of H7,473 (March 31, 2018: 5,540)] 14,042 10,896
Stock in trade 7,335 2,452
Stores and spares 11,051 11,911
Total Inventories 1,77,234 1,35,067
Amounts recognised in Profit or loss
Write-down of inventories to net realisable value and provision for slow moving amounted to H4,437 (March 31, 2018 - H4,575) as at the year
end. An amount of H138 was credited to profit or loss (March 31, 2018- H2,662 was charged to profit or loss) and included in 'Changes in value of
inventories of Finished goods, work in progress and Stock-in-trade ' and 'Cost of raw materials consumed' in statement of profit or loss.
Note 10: Current investments
March 31, 2019 March 31, 2018

Units Amount Units Amount
Investment in Quoted Mutual Funds (at FVPL)
SBI-Magnum low duration fund (Daily dividend plan) fair value @ H1,010.94 1,38,32,033 1,39,834 1,61,37,146 1,62,662
(March 31, 2018: H1,008) per unit
SBI Treasury Advantage Fund (Direct daily dividend plan) Fair value @ H Nil - - 25,94,596 26,266
(March 31, 2018: H1,012.33) per unit
Total Current investments 1,39,834 1,88,928
Aggregate amount of quoted investments and market value thereof 1,39,834 1,88,928
Aggregate amount of unquoted investments - -
159

Note 11: Trade receivables
March 31, 2019 March 31, 2018

Trade receivables 1,16,706 1,01,614
Current portion 1,16,337 1,01,436
Non-current portion - -
March 31, 2019 March 31, 2018

Trade Receivables considered Good- Secured - -
Trade Receivables considered Good - Unsecured 1,16,337 1,01,436
Trade Receivables which have significant increase in credit risk - -
Trade Receivables - credit impaired 369 178
Total 1,16,706 1,01,614
Note 12: Cash and cash equivalents
March 31, 2019 March 31, 2018

Balances with banks - in current accounts 1,239 2,505
Cash on hand 61 10
Total Cash and cash equivalents* 1,300 2,515
*There are no repatriation restrictions with regard to cash and cash equivalents as at the end of reporting period and prior period.
Note 13: Bank balances other than cash and cash equivalents
March 31, 2019 March 31, 2018

Balances with banks to the extent held as margin money (towards margin on Letters of Credit - -*
& Bank Guarantees issued by bank etc.)
In Fixed Deposits with maturity of more than three months but less than twelve months 10,129 8,648
(pledged towards Overdraft facilities from banks)
Total Bank balances other than cash and cash equivalents 10,226 8,731
160

Note 14: Current Loans
March 31, 2019 March 31, 2018

Loans to employees 11 17
Total Current Loans 11 17
March 31, 2019 March 31, 2018

Loans considered Good - Unsecured 11 17
Total 11 17
Total Current Loans 11 17
Note 15: Other Current Financial assets
March 31, 2019 March 31, 2018

Total Other Current Financial assets 135 948
Note 16: Other current assets
March 31, 2019 March 31, 2018

Indirect Taxes- Input Credits 13,021 10,503
Prepaid expenses (including prepaid gratuity, Refer Note 18) 919 622
Advances to suppliers 5,843 4,320
Other Receivables (includes indirect tax refund claims) 145 425
Total Other current assets 19,928 15,870
Note: Equity share capital and other equity
Note17 (a): Equity share capital
(i) Authorised equity share capital

As at April 1, 2017 30,00,00,000 6,000
As at March 31, 2018 30,00,00,000 6,000
As at March 31, 2019 30,00,00,000 6,000
161

(ii) Movements in paid-up equity share capital

As at April 1, 2017 26,54,68,580 5,309
As at March 31, 2018 26,54,68,580 5,309
As at March 31, 2019 26,54,68,580 5,309
Terms and rights attached to equity shares
- The Group has only one class of equity shares having par value of INR 2 per share. The Company declares and pays dividends in Indian
rupees. In the event of liquidation of the Group, the holders of equity shares will be entitled to receive remaining assets of the Group, after
distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. Every
holder of equity shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one
vote.
- Aggregate number of Bonus shares issued during the period of five years immediately preceding the reporting date:
On September 28, 2015, the Group issued 13,27,34,290 equity shares of H2 each as fully paid bonus shares by capitalization of
securities premium reserve.
(iii) Details of shareholders holding more than 5% shares in the Company
March 31, 2019 March 31, 2018

Number of % holding Number of % holding
shares shares
PROMOTERS GROUP
Dr.Murali Krishna Prasad Divi 75,67,000 2.85% 1,55,67,000 5.86%
Mr. Satchandra Kiran Divi 5,40,00,000 20.34% 4,60,00,000 17.33%
Mrs. Swarnalatha Divi 1,40,00,000 5.27% 1,40,00,000 5.27%
Ms. Nilima Motaparti 5,40,00,000 20.34% 5,40,00,000 20.34%
Other than Promoters
Reliance Capital Trustee Group Limited 75,11,601 2.83% 1,34,25,419 5.06%
Note 17 (b): Reserves and surplus
March 31, 2019 March 31, 2018

Securities premium reserve 7,988 7,988
General reserve 1,00,000 1,00,000
Retained earnings 5,61,288 4,71,784
Special Economic Zone Re-investment reserve 20,347 6,476
Total Reserves and surplus 6,89,623 5,86,248
162

(i) There was no movement in Securities premium reserve and General Reserve during the year and previous year. Hence no reconciliation is
required to be given.
(ii) Retained earning
March 31, 2019 March 31, 2018

Opening balance 4,71,784 4,02,542
Net profit for the Year 1,35,274 87,701
Transfer to Special Economic Zone Re-investment reserve (15,900) (8,927)
Utilization of Special Economic Zone Re-investment reserve 2,029 22,351
Dividend (26,547) (26,546)
Corporate Dividend Tax (5,457) (5,404)
Items of other comprehensive income recognised directly in retained earnings:
- Remeasurements of post employment benefit obligation, net of tax 105 67
Closing balance 5,61,288 4,71,784
(iii) Special Economic Zone Re-investment reserve
March 31, 2019 March 31, 2018

Opening balance 6,476 19,900
Transfer from Retained Earnings 15,900 8,927
Utilization of Special Economic Zone Re-investment reserve (2,029) (22,351)
Closing Balance 20,347 6,476
Nature and purpose of reserves:
Securities premium reserve:

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
General Reserve:
General Reserves represent amounts transferred from Retained Earnings in earlier years under the provisions of the erstwhile Companies Act, 1956.
Special Economic Zone Re-investment reserve:

Under the SEZ scheme, the unit which begins production of Goods/ services on or after April 1, 2005 will be eligible for deductions of 100%
of profits or gains derived from export of Goods/ services for the first five years, 50% of such profits or gains for a further period of five years
and 50% of such profits or gains for the balance period of five years subject to creation of Special Economic Zone Re-investment out of profit
of eligible SEZ Units and utilisation of such reserve by the company for acquiring new plant and machinery for the purpose of its business as
per the provisions of the Income Tax Act, 1961. (Refer Note 42(a))
163

Note 18: Provisions - Employee Benefit Obligations
March 31, 2019 March 31, 2018

Current Non- Total Current Non- Total
Current Current
Compensated Absences 111 1,317 1,428 94 1,495 1,589
Gratuity [Refer Note 18(ii)] - - - - - -
111 1,317 1,428 94 1,495 1,589
(i)
Compensated Absences obligations:
The Compensated Absences covers the company's liability for earned leave which is classified as other long-term benefits.
(ii)
Post-employment obligations- Gratuity
The company provides gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for
a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees' last drawn basic salary
per month computed proportionately for 15 days' salary multiplied for the number of years of service. The gratuity plan is a funded plan and the
company makes contributions to recognised funds in India through an approved trust administered by Life Insurance Corporation of India.
The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as
follows:
Present Fair Value of Net amount
Value of Plan Assets
obligation
As at April 01, 2017 1,714 1,675 39
Interest expense/(income) 120 115 5
Remeasurements
Actuarial (gain) / loss - 10 (10)
(Gain)/loss from change in demographic assumptions 312 - 312
(Gain)/loss from change in financial assumptions (312) - (312)
Total amount recognized in other comprehensive income (84) 10 (94)
Total amount recognized in Statement of Profit and Loss 345 125 220
As at March 31, 2018 2,035 2,119 (84)
164

Present Fair Value of Net amount

Value of Plan Assets
obligation
As at April 01, 2018 2,035 2,119 (84)
Interest expense/(income) 157 160 (3)
Remeasurements - - -
Actuarial (gain) / loss - -* -
(Gain)/loss from change in demographic assumptions - - -
(Gain)/loss from change in financial assumptions - - -
Total amount recognized in other comprehensive income (141) - (141)
Total amount recognized in Statement of Profit and Loss 375 160 215
As at March 31, 2019 2,367 2,797 (430)
The net liability disclosed above relates to funded and unfunded plans are as follows:
March 31, 2019 March 31, 2018

Present value of funded obligations 2,367 2,035
Fair value of plan assets 2,797 2,119
Deficit/ (Surplus) of funded plans* (430) (84)
* Included under note 16 ‘Other current assets’
Significant estimates: Actuarial assumptions and sensitivity
The significant actuarial assumptions were as follows:
March 31, 2019 March 31, 2018

Discount rate 7.63% 7.71%
Salary growth rate 6% 6%
Attrition Rate 1% to 3% depending 1% to 3% depending
on age on age
Retirement Age 60 years 60 years
Average Balance Future Services 29 years 29 years
Mortality Table IALM(2006-08) IALM(2006-08)
165

(iii) Sensitivity analysis
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
March 31, 2019 March 31, 2018

Defined Benefit Obligation:
Increase / (Decrease) in Defined Benefit Obligation: 2,367 2,035
Discount rate:(% change compared to base due to sensitivity)
Increase : +1% (251) (217)
Decrease: -1% 301 260
Salary Growth rate:(% change compared to base due to sensitivity)
Increase : +1% 273 235
Decrease: -1% (233) (203)
Attrition rate:(% change compared to base due to sensitivity)
Increase : +50% 63 58
Decrease: -50% (74) (69)
Mortality rate:(% change compared to base due to sensitivity)
Increase : +10% 3 3
Decrease: -10% (3) (3)
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely
to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to
significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance
sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(iv) Defined benefit liability and employer contributions
The company has established a trust to purchase insurance policy to provide for payment of gratuity to the employees. Every year, the insurance
company carries out a funding valuation based on the latest employee data provided by the company. Any deficit in the assets arising as a result
of such valuation is funded by the company. The company considers that the contribution rate set at the last valuation date is sufficient to eliminate
the deficit over the agreed period and that regular contributions, which are based on service costs will not increase significantly.
The Company makes contributions to Defined benefit plans for qualifying employees. These Plans are administered through approved Trust, which
operate in accordance with the Trust Deed, Rules and applicable Statutes. The concerned Trust is managed by Trustees who provide strategic
guidance with regard to the management of investments and liabilities and also periodic review of its performance. The trust in turn contributes to
a scheme administered by the Life Insurance corporation of India to discharge gratuity liability to the employees. The trust has not changed the
processes used to manage its risks from previous periods. A large portion of assets consists of government and corporate bonds, although invest
in equities, cash and mutual funds. The plan asset mix is in compliance with the requirements of the respective local regulations.
166

The major categories of plans assets are as follows:
March 31, 2019 March 31, 2018

Central Government Securities 687 441
State Government Securities 1,188 961
SCD /Bonds 623 583
Equity 180 43
Fixed Deposits 9 77
Others 110 14
2,797 2,119
Contributions to post employment benefit plan for the year ending March 31, 2020 is expected to be H429.
The weighted average duration of the defined benefit obligation is 20.94 years ( March 31, 2018 - 20.94 Years ). The expected cash flows over
the next years is as follows:
Less than Between Between Over Total

a year 2-5 years 6-10 years 10 years
March 31, 2019
March 31, 2018
(v)
Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:
Interest Rate Risk: The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in the value of the liability.
Liquidity Risk: This is the risk that the company is not able to meet the short term gratuity pay-out. This may arise due to non-availability of
enough cash / cash equivalent to meet the liabilities or holdings illiquid assets not being sold in time.
Salary Escalation Risk: The present value of the defined benefit plans calculated with the assumption of salary increase rate of plan participants
in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present
value obligation will have a bearing on the plan's liability.
Demographic Risk: The company has used certain mortality and attrition assumptions in valuation of the liability. The company is exposed to
the risk of actual experience turning out to be worse compared to the assumption.
Regulatory Risk: Gratuity benefits is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to
time). There is a risk of change in regulations requiring higher gratuity payouts (eg. Increase in the maximum limit on gratuity.)
Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the company to
market risk for volatilities/fall in interest rate.
Investment Risk: The probability and likelihood of occurrence of losses relative to the expected return on any particular investment.
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under-perform this yield,
this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. A
portion of the fund is invested in equity securities and in alternative investments which have low correlation with equity securities. The equity
167

securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. The company has a risk management
strategy where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are
corrected by rebalancing the portfolio. The company intends to maintain the investment mix in the continuing years.
Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially off-set by an increase in the value
of the plan's bond holdings.
(vi)
Defined Contribution plans
Employer's Contribution to Provident Fund: Contributions are made to provident fund in India for employees at the rate of 12% of basic salary
as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is
limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period
towards defined contribution plan is H1,159 (March 31, 2018- H1,032) also refer Note.41(b)
Employer's Contribution to State Insurance Scheme: Contributions are made to State Insurance Scheme for employees at the rate of 4.75%.
The Contributions are made to Employee State Insurance Corporation(ESI) to the respective State Governments of the company's location.
This Corporation is administered by the Government and the obligation of the company is limited to the amount contributed and it has no further
contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is H287 (March 31,
2018- H242)
Note 19(a): Deferred Tax Asset
March 31, 2019 March 31, 2018

Deferred Tax Asset :
Deferred Tax on intra group adjustments 234 103
Deferred Tax Asset 234 103
Note 19(b): Deferred Tax Liabilities (net)
March 31, 2019 March 31, 2018

Deferred Tax Liability / (Asset) :
Property, plant and equipment 23,272 20,594
Employee Benefits (965) (1,018)
Others (189) (308)
Net Deferred Tax Liabilities / (Asset ) net 22,118 19,268
168

Movement in Deferred tax liabilities /(Asset)
Changes
Changes
April 01, 2017 through Profit March 31, 2018
through OCI
and Loss
Employee benefit expenses (787) (231) - (1,018)
Others including intra-group adjustments (3,671) 3,260 - (411)
Net Deferred Tax Liability/(Asset) 19,165
Deferred Tax Asset - Refer Note 19(a) (103)
Deferred Tax Liability - Refer Note 19(b) 19,268
Changes
Changes
April 01, 2018 through Profit March 31, 2019
through OCI
and Loss
Employee benefit expenses (1,018) 16 36 (965)
Others including intra-group adjustments (411) (12) - (423)
Net Deferred Tax Liability/(Asset) 21,884
Deferred Tax Asset - Refer Note 19(a) (234)
Deferred Tax Liability - Refer Note 19(b) 22,118
Note 20: Current borrowings
Maturity Date and

Interest rate March 31, 2019 March 31, 2018
Terms of Payment
Loans payable on demand:
Secured from Banks
Working Capital Loans from Banks* Payable on demand 8.65%** 9,470 1,710
Bank Overdrafts* Payable on demand 8.00%# 1,090 4,601
Total Current Borrowings 10,560 6,311
*Represents temporary overdrafts
** 8.35% for year ended March 31, 2018
# 5.25% for year ended March 31, 2018
Secured borrowings and assets pledged as security
Secured by pari-passu first charge on inventories, receivables and other current assets of the company and pari-passu second charge on movable
property,plant and equipment of the company , both present and future. The carrying amounts of financial and non-financial assets pledged as
security for current and non- current borrowings are disclosed in Note 20(a)
169

Note 20(a): Assets pledged as security
The carrying amounts of Company's assets pledged as security for working capital loans from banks:
March 31, 2019 March 31, 2018

First Charge
Inventory 1,66,318 1,28,139
Accounts receivables 1,28,224 1,11,211
Other Current Assets 1,70,207 2,16,041
4,64,749 4,55,391
Second Charge
Movable assets of the company 1,42,750 1,49,049
Note 20 (b): Net Debt Reconciliation
This section sets out the changes in liabilities arising from financing activities in the statement of cash flows:
March 31, 2019 March 31, 2018

Cash and cash equivalents 210 (2,086)
Liquid investments 1,39,834 1,88,928
Working Capital Loans (9,470) (1,710)
Net Debt 1,30,574 1,85,132
Liabilities from financing

Other assets
activities
Cash Liquid Current Total
and bank Investments Borrowings
Overdraft
Net Debt as at April 01, 2017 (426) 1,63,072 (1,069) 1,61,577
Cash Flows (1,660) 25,596 (641) 23,295
Interest Expense - - 133 133
Interest paid - - (133) (133)
Net Debt as at March, 31, 2018 (2,086) 1,88,928 (1,710) 1,85,132
Net Debt as at April 01, 2018 (2,086) 1,88,928 (1,710) 1,85,132
Cash Flows 2296 (49,578) (7,760) (55,042)
Interest Expense - - (350) (350)
Interest paid - - 350 350
Net Debt as at March 31, 2019 210 1,39,834 (9,470) 1,30,574
170

Note 21: Trade payables
March 31, 2019 March 31, 2018

Current
Trade Payables -Micro enterprises and small enterprises -Refer Note 42(c) - -
Trade Payables -Others 49,226 41,121
Total Trade payables 49,226 41,121
Note 22: Other Financial liabilities
March 31, 2019 March 31, 2018

Current
Capital creditors 3,973 2,150
Accrual for rebates / discounts 2,219 -
Total Other Financial liabilities 6,289 2,233
Note 23: Other current liabilities
March 31, 2019 March 31, 2018

Statutory dues payable 342 685
Deferred Revenue Government Grants 35 -
Employee benefits payable 14,785 10,675
Advance from customers 2,908 3,953
Total Other current liabilities 18,070 15,313
Note 24: Revenue from operations

March 31, 2019 March 31, 2018
Sale of products 4,79,444 3,79,775
Sale of Services: -
Contract research fee 938 3,099
Other Operating Revenue: -
Export incentives 11,691 6,518
Sale of scrap out of manufacturing process 2,553 1,886
Total Revenue from operations 4,94,626 3,91,278
171

Note 24(a): Reconciliation of Revenue recognised with contract price:
March 31, 2019*

Contract price 4,98,167
Rebates / Discounts (3,541)
Revenue from operations 4,94,626
Note 24(b):Disaggregation of Revenue :
The Group derives revenue from Operations (Sale of Products and services and other operating revenue) at a point of time in the following
geographical areas (based on where products and services are delivered):
March 31, 2019

Sale of Other Operating Total Revenue*
Region
Products and Revenue
Services
America 1,32,533 - 1,32,533
Asia 59,183 - 59,183
Europe 2,18,791 - 2,18,791
India 56,266 14,244 70,510
Others 13,609 - 13,609
4,80,382 14,244 4,94,626
Note 25: Other income
March 31, 2019 March 31, 2018

Interest income from financial assets at amortized cost 748 435
Dividend income from investments mandatorily measured at fair value through profit or loss 8,406 7,612
Net gain on foreign currency transactions and translations 3,086 2,795
Net gain on financial assets mandatorily measured at fair value through profit or loss 2,625 260
Net gain on sale of investments 97 8
Sale of other scrap 157 231
Provisions / Liabilities no longer required written back 429 3
Insurance claim acknowledged 14 -
Government Grants 1 -
Total Other income 15,563 11,344
Note 26: Cost of raw materials consumed
March 31, 2019 March 31, 2018

Raw materials at the beginning of the year 39,389 38,274
Add: Purchases 2,22,957 1,53,972
Less: Raw materials at the end of the year 51,957 39,389
Total Cost of raw materials consumed 2,10,389 1,52,857
172

Note 27: Changes in inventories of finished goods, work-in-progress and stock-in-trade

March 31, 2019 March 31, 2018
Opening Balance:
Stock-in-trade 2,452 4,579
83,767 84,100
Closing Balance:
Stock-in-trade 7,335 2,452
1,14,226 83,767
Total Changes in inventories of finished goods, work-in-progress and stock-in- (30,459) 333
trade
Note 28: Employee benefits expense
March 31, 2019 March 31, 2018

Contribution to provident fund and other funds [also refer note: 41(b)] 1,159 1,032
Contribution to to ESI 287 242
Staff welfare expenses 888 1,175
Total Employee benefits expense 54,227 45,606
Note 29: Finance costs
March 31, 2019 March 31, 2018

Interest and finance charges on financial liabilities carried at amortised cost 29 53
Interest on Income tax 183 2
Charges for Letters of Credit / Bank Guarantees 138 78
Total Finance costs 350 133
Note 30: Depreciation and amortisation expense
March 31, 2019 March 31, 2018

Depreciation on property, plant and equipment 16,624 14,004
Amortisation of intangible assets 266 245
Total Depreciation and amortisation expense 16,890 14,249
173

Note 31: Other expenses
March 31, 2019 March 31, 2018

Consumption of stores and spare parts 4,162 3,468
Packing materials consumed 3,991 3,721
Job Work Charges 2,197 1,266
Power and fuel 24,866 22,873
Repairs and maintenance- buildings 1,515 1,823
Repairs and maintenance- machinery 7,854 6,458
Repairs and maintenance- others 118 130
Insurance 601 560
Directors’ sitting fees 51 39
Rental charges 874 825
Communication expenses 161 163
Travelling and conveyance 1,403 1,526
Vehicle maintenance 149 75
Payments to Auditors - Refer Note 31(a) 52 43
Legal and professional charges 1,032 5,043
Factory upkeep 250 315
Environment management expenses 1,477 1,373
Advertisement 89 73
Research and development expenses -Refer Note 31(c) 1,060 1,011
Sales commission 747 807
Carriage outward 6,472 5,522
General expenses 3,577 3,244
Provision for doubtful debts [including Write off H62 (2018: H4)]- Refer Note 35(A) 339 61
Donations 1,248 2
Political Contributions 2,000 -
Corporate Social Responsibility expenses -Refer Note 31(b) 2,837 1,698
Loss on disposal / discard of assets 139 626
Bank charges 118 104
Total Other expenses 70,693 63,966
Note 31(a): Details of Payments to auditors
March 31, 2019 March 31, 2018

Payments to auditors
For Quarterly Reviews 19 16
Re-imbursement of expenses 3 1
Total Payments to auditors 52 43
174

Note 31 (b): Corporate Social Responsibility Expenditure
March 31, 2019 March 31, 2018

Amount required to be spent as per section 135 of the Act 2,824 2,719
Amount spent during the year on :
(i) Construction/acquisition of any asset - -
(ii) On purposes other than (i) above
- Promoting education 1,205 1,035
- Promoting healthcare 52 98
- Rural Development 1,279 304
- Empowering Women 9 9
- Animal Welfare 4 3
- Safe drinking water 145 64
- Environmental sustainability 71 57
- Promotion of rural sports 9 9
- Swatch Bharat programme 6 34
- Support to Differently abled 16 30
- Livelihood Enhancement 1 20
- Others 40 35
Total Corporate Social Responsibility Expenditure 2,837 1,698
Note 31 (c): Research and development expenditure*
March 31, 2019 March 31, 2018

Raw materials consumed 67 51
Contribution to provident and other funds 72 67
Staff welfare expenses 31 28
Stores consumed 259 227
Power and fuel 175 163
Repairs to buildings 41 64
Repairs to machinery 400 267
Repairs to other assets 24 143
Communication expenses 1 -
Travelling and conveyance - 1
Professional and consultancy charges - 4
Miscellaneous expenses 68 30
Total Research and development expenditure 3,489 3,177
* Research and development expenditure to the extent of H2,429 (2018: H2,166) is grouped under employee benefit expenses (consists of Salaries, wages, bonus and other
allowances, contribution to provident and other funds, contribution to ESI and staff welfare expenses) and H1,060 (2018: H1,011) is grouped under other expenses.
175

Note 32: Income tax expense
This note provides an analysis of the Group's income tax expense, showing the amounts that are recognised directly in equity and how the tax expense
is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the group's tax positions.
(a) Income tax expense
March 31, 2019 March 31, 2018

Current tax
Current tax on profits for the year 47,614 28,983
Adjustments for current tax of prior periods (63) -
Total Current tax expense 47,551 28,983
Decrease/ (Increase) in deferred tax assets 4 3,028
(Decrease)/ Increase in deferred tax liabilities 2,678 3,421
Total Deferred tax expense/(benefit) 2,682 6,449
Income tax expense recognised in statement of profit and loss 50,233 35,432
Income tax expense recognised in other comprehensive income 36 27
Total Income tax expense 50,269 35,459
Entire deferred tax for the year ended March 31, 2019 and March 31, 2018 relates to origination and reversal of temporary differences.
(b)
Significant estimates (tax calculation note)
In calculating the tax expense for the current period, the company has treated certain expenditures as deductible and non-deductible based
on prior year completed assessments for tax purposes. The Company benefits from the tax holiday available for units set up under the Special
Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under
the SEZ scheme, the unit which begins production of Goods/services on or after April 1, 2005 will be eligible for deductions of 100% of profits
or gains derived from export of Goods/services for the first five years, 50% of such profits or gains for a further period of five years and 50% of
such profits or gains for the balance period of five years subject to creation of Special Economic Zone Re-investment reserve out of profit of
eligible SEZ Units and utilisation of such reserve by the company for acquiring new plant and machinery for the purpose of its business as per
the provisions of the Income Tax Act, 1961.
(c ) Reconciliation of tax expense and the accounting profit multiplied by India's tax rate:
March 31, 2019 March 31, 2018

Profit from operations before income tax expenses 1,85,507 1,23,133
Tax at the Indian tax rate of 34.944% (March 31, 2018-34.608%) 64,824 42,614
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Expenses not deductible for tax purpose 1,708 614
Income not considered for tax purpose (15,434) (10,770)
Difference in Overseas tax rates (339) 40
Impact on account of differential tax rates (277) -
Impact due to changes in the tax rate from previous year 192 -
Adjustments for current tax of prior periods (63) -
MAT Credit utilised - 3,107
Others (342) (146)
Income tax expenses 50,269 35,459
The applicable Indian corporate statutory tax rate for the year ended March 31, 2019 and March 31, 2018 is 34.944% and 34.608%,
respectively. The increase in the corporate statutory tax rate to 34.944% is consequent to changes made in the Finance Act, 2018.
176

Financial Instruments and Risk Management
Note 33: Categories of Financial Instruments
March 31, 2019 March 31, 2018

Notes Level Carrying Value / Carrying Value /
Fair Value Fair Value
A. Financial assets
a) Mandatorily measured at fair value
through profit or loss
Investment in mutual funds 5, 10 1 1,94,559 1,88,928
Investment in equity instruments in other 5 3 1 1
companies
Total Financial assets 1,94,560 1,88,929
Note 34: Fair Value Hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price are included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an
instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs
is not based on observable market data, the instrument is included in level 3. This is the case with listed instruments where market is not liquid and
for unlisted instruments.
Valuation technique used to determine fair value:
Specific Valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments.
- the fair value of remaining financial instruments is determined using discounted cash flow analysis.
Valuation Process:
The Finance and Accounts department of the group performs the valuation of financial assets and liabilities required for financial reporting purposes,
and report to the Board of Directors. The Level 3 inputs for investment in equity shares are derived using the discounted cash flow analysis.
177

Note 35: Financial Risk Management
The group's activities expose it to market risk, price risk, liquidity risk and credit risk. The group emphasizes on risk management and has an enterprise
wide approach to risk management. The group's risk management and control procedures involve prioritization and continuing assessment of these
risks and devise appropriate controls, evaluating and reviewing the control mechanism.
(A) Credit Risk:

Credit risk management
I. Credit risk on cash and cash equivalents and investments is limited as the group generally invests in deposits and mutual funds with
nationalised banks, thereby minimising its risk.
II. Credit risk on security deposits, investments and trade receivables are evaluated as follows:
Basis for recognition of

Category Asset Group
expected credit loss provision
Financial assets for which credit risk has not increased Loss allowance measured at Security Deposits
significantly since initial recognition 12 month expected credit losses Loans to employees
Other Non-Current Financial assets
Other Current Financial assets
March 31, 2019 March 31, 2018

Gross Gross
Carrying Carrying
Asset Group carrying Expected carrying Expected
amount net amount net
amount at credit loss amount at credit loss
of provision of provision
default default
Security Deposits 3,404 - 3,404 3,413 - 3,413
Loans to employees 11 - 11 17 - 17
Other Current Financial assets 135 - 135 948 - 948
Credit risk is the risk of financial loss to the group if a customer to a financial instrument fails to meet its contractual obligations and arises
primarily from trade receivables, treasury operations etc. Credit risk of the group is managed at the group level. In the area of treasury
operations, the group is presently exposed to risk relating to investment in mutual funds. The group regularly monitors such investments and
all the investments in mutual funds are held with State Bank of India which is a nationalised bank, thereby minimises the risk.
The credit risk related to trade receivables is influenced mainly by the individual characteristics of each customer. The credit risk is managed by
the group by establishing credit limits and continuously monitoring the credit worthiness of the customer. The group also provides for expected
credit losses based on the past experience where it believes that there is high probability of default. In general, all trade receivables greater
than 180 days are reviewed and provided for by analysing individual receivables.
178

Following are the Expected credit loss for trade receivables under simplified approach:
March 31, 2019 March 31, 2018

Gross carrying amount of trade receivables 1,16,706 1,01,614
Less : Expected credit losses ( Loss allowance provision) (369) (178)
Net carrying amount of trade receivables 1,16,337 1,01,436
Expected credit loss for trade receivables under simplified approach as at March 31, 2019.
Outstanding Outstanding Outstanding

Ageing Not due FOR < 90 > 90 days & Total
FOR > 6 Ms
days < 180 days
Gross carrying amount of trade receivables 90,831 23,555 939 1,381 1,16,706
Less: Provision for doubtful debts (Specific) - - - (354) (354)
Less: Expected credit losses ( Loss allowance provision) (11) (4) -* - (15)
Net carrying amount of trade receivables 90,820 23,551 939 1,027 1,16,337
* Amount is below the rounding off norms adopted by the group
Reconciliation of Loss Allowance Provision in respect of trade receivables:
Amount
Less: Recoveries / Writeback (1)
Less: Recoveries / Write back (85)
(B)
Market Risk:
The group has substantial exposure to foreign currency risk due to the significant exports. Sales to other countries and purchases from
overseas suppliers are exposed to risk associated with fluctuation in the currencies of those countries vis-a-vis the functional currency i.e.
Indian rupee. The group manages currency fluctuations by having a better geographic balance in revenue mix and ensures a foreign currency
match between liabilities and earnings. The group believes that the best hedge against foreign exchange risk is to have a good business mix.
The group is very cautious towards hedging as it has a cost as well as its own risks. The group continually reassesses the cost structure impact
of the currency volatility and engages with customers addressing such risks.
179

(i) Foreign currency risk exposure:
March 31, 2019 March 31, 2018

Amount Amount
Currency
in Foreign Amount in H in Foreign Amount in J
Currency Currency
Receivables ACU 6 399 2 160
CHF 3 193 3 191
EUR 13 1,011 34 2,716
GBP 154 13,923 141 13,035
USD 1,136 78,600 998 64,905
Payable to suppliers and services USD (347) (24,036) (314) (20,396)
EUR (5) (396) (12) (951)
JPY (241) (150) - -
CHF -* -* (1) (44)
CAD -* -* - -
GBP (3) (246) -* (1)
Net Foreign currency exposure Asset/ 69,298 59,615
(Liability)
* Amount is below the rounding off norm adopted by the group

(Income) / Expense
March 31, 2019 March 31, 2018
USD Sensitivity:
INR/USD -Increase by 1% (355) (285)
INR/USD -Decrease by 1% 355 285
ACU Sensitivity:
INR/ACU -Increase by 1% (3) (1)
INR/ACU -Decrease by 1% 3 1
CHF Sensitivity:
INR/CHF -Increase by 1% (1) (1)
INR/CHF -Decrease by 1% 1 1
EUR Sensitivity:
INR/EUR -Increase by 1% (4) (12)
INR/EUR -Decrease by 1% 4 12
GBP Sensitivity:
INR/GBP -Increase by 1% (89) (83)
INR/GBP -Decrease by 1% 89 83
JPY Sensitivity:
INR/JPY -Increase by 1% 1 -*
INR/JPY -Decrease by 1% (1) -*
* Amount is below the rounding off norm adopted by the group
180

(ii) Cash Flow and fair value interest rate risk:
Interest rate exposure: The group does not have long term borrowings and interest rate risk is towards short term working capital
borrowings and fixed deposits. Below is the sensitivity analysis. The analysis presents the cash flow due to the increase/decrease in the
interest rates with all other variables held constant.

(Income) / Expense
March 31, 2019 March 31, 2018
Short term Borrowing:
Interest rate-increase by 100 basis points 69 41
Interest rate-Decrease by 100 basis points (69) (41)
Fixed Deposits:
Interest rate-increase by 100 basis points (66) (57)
Interest rate-Decrease by 100 basis points 66 57
(C)
Price Risk:
The group is exposed to risk from investments in mutual funds. The group has invested in quoted debt mutual funds with State Bank of India.
The group is very cautious in their investment decisions and takes a conservative approach of investing in nationalised banks with minimal risk.
The table below summarises the impact of increase/(decrease) in the Net Asset Value(NAV) of these investments
The analysis is based on the assumption that the NAV has (increased)/decreased by 1% with all other variables held constant.

(Income) / Expense
March 31, 2019 March 31, 2018
SBI-Magnum low duration fund (Daily dividend plan)
-Increase in NAV by 1% (1,398) (1,627)
-Decrease in NAV by 1% 1,398 1,627
SBI Treasury Advantage Fund ( Direct daily dividend plan)
-Increase in NAV by 1% - (263)
-Decrease in NAV by 1% - 263
-Increase in NAV by 1% (547) -
-Decrease in NAV by 1% 547 -
(D)
Liquidity Risk:
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close
out market positions. Group's treasury maintains flexibility in funding by maintaining availability under deposits in banks, adequate limits in the
current accounts etc.
181

(i) Contractual Maturities of financial liabilities:
March 31, 2019

months months
Total 66,075 - 66,075
March 31, 2018

months months
Total 49,665 - 49,665
Note 36: Capital Management
(a) The group’s financial strategy aims to provide adequate capital for its growth plans for sustained stakeholder value. The group's objective
is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other
stakeholders. And depending on the financial market scenario, nature of the funding requirements and cost of such funding, the group decides
the optimum capital structure. The group aims at maintaining a strong capital base so as to maintain adequate supply of funds towards future
growth plans as a going concern.
Net debt to Equity ratio
March 31, 2019 March 31, 2018

Net debt 10,560 6311
Total Equity 6,95,715 5,92,480
Net debt to Equity ratio 0.015 0.011
(b) Dividends:
Dividend paid on Equity shares:
March 31, 2019 March 31, 2018

Dividends paid:
Final Dividend 26,547 26,547
Dividend Tax on final Dividend 5,457 5,404
Interim Dividend - -
Proposed dividend* not recognised at the end of the reporting period:
March 31, 2019 March 31, 2018

On Equity Shares of H2 each
Dividend proposed 42,475 26,547
Dividend Tax 8,731 5,457
Dividend per equity share 16 10
*This proposed dividend is subject to approval of shareholders in the ensuing Annual General Meeting
182

Note 37: Interest in Other Entities
The Company's subsidiaries as at March 31, 2019 are set out below. Unless otherwise stated, they have share capital consisting solely of equity
shares that are held directly by the Company.
Place of Ownership interest held Ownership interest held by Non-Controlling

Business/ by the Company interests
Name of the entity
Country of March 31, March 31, March 31, March 31,
Principal activity
incorporation 2019 2018 2019 2018
Divis Laboratories (USA) Inc USA 100% 100% 0% 0% Manufacturing and
Trading of Nutra
ingredients
Divi's Laboratories Europe AG SWITZERLAND 100% 100% 0% 0% Manufacturing and
Trading of Nutra
ingredients
Note 38: Segment Information
Description of segments and principal activities
The Chairman and Managing Director has been identified as being the Chief Operating Decision Maker(CODM). Operating segments are defined
as components of an enterprise for which discrete financial information is available. This is evaluated regularly by the CODM, in deciding how to
allocate resources and assessing the group's performance. The group is engaged in the manufacture of Active Pharmaceutical Ingredients (API's)
and Intermediates and operates in a single operating segment.
The amount of revenue from operations by each country (based on where products and services are delivered) exceeding 10% of total revenue of
a group and non-current assets broken down by location of the assets respectively are as follows:
India USA Other Countries

March 31, March 31, March 31, March 31, March 31, March 31,
2019 2018 2019 2018 2019 2018
Revenue 70,510 56,425 95,293 69,818 3,28,823 2,65,035
Non-current Assets 2,80,403 2,21,525 27 12 26 19
The revenue from transactions with one external customer exceed 10% of the total revenue of the group for each of the two years ended March
31, 2019 and March 31, 2018
Note 39: Foreign Subsidiaries considered for Consolidation
Place of Business/ March 31, 2019 March 31, 2018

Name of the entity Country of
incorporation
wDivis Laboratories (USA) Inc USA 100% 100%
Divi's Laboratories Europe AG SWITZERLAND 100% 100%
183

Note 40: Related Party Transactions
(a) Key Management personnel(KMP) : Dr. Murali. K. Divi

: Mr. N.V. Ramana
: Mr. D. Madhusudana Rao
: Mr. Kiran S. Divi
: Mrs. Nilima Motaparti
: Mr. K V K Seshavataram
: Mr. R Ranga Rao
: Mrs. S. Sridevi (resigned w.e.f 22.06.2017)
: Dr.G Suresh Kumar
: Dr Ramesh B V Nimmagadda
: Dr S Ganapaty
: Prof. Sunaina Singh (w.e.f 28.03.2019)
(b) Relative of Key Management personnel : Mrs. D. Swarna Latha
: Mr. D. Babu Rajendra Prasad
: Mr. D. Radha Krishna Rao
: Mr.D. Sri Ramachandra Rao
: Mrs. D. Raja Kumari
: Mr. D. Satyasayee Babu
: Mrs. A. Shanti Chandra
: Mrs. N. Nirmala Kumari
: Mrs. N. Chandrika Ramana
: Mr. N.V.Anirudh
: Mrs. N. Monisha
: Mrs. Jhansi Lakshmi Pendyala
: Mr. N. Prashanth
: Mrs. L. Vijaya Lakshmi
(c) Other related party : Divi’s Laboratories Employees’ Gratuity Trust.
(d) List of Related Parties over which Control / Significant Influence exists with whom the group has transactions :
Relationship
Divi’s Properties Private Limited Company In Which Key Management Personnel have Significant Influence
Divi’s Biotech Private Limited Company In Which Key Management Personnel have Significant Influence
Divi's Laboratories Employees' Gratuity Trust. Post employment benefit plan of Divi's Laboratories Ltd*
*Refer Note No. 18(ii) for information on transactions with post employment benefit plan mentioned above.
184

(e) Summary of Related Party transactions and balances:
March 31, 2019 March 31, 2018

Outstanding Outstanding
Amount balance as Amount balance as
(Transactions) at March 31, (Transactions) at March 31,
2019 2018
(i) Managerial Remuneration and short term employee benefits 11,061 10,584 7,631 7,173
to Key Management Personnel -refer 39(f) (i)
(ii) Sitting fees to non-executive directors-refer 39(f) (i) 51 - 39 -
(iii) Dividend paid to Key Management Personnel -refer 39(f) (ii) 11,664 - 11,707 -
(iv) Dividend paid to Relatives of Key Management Personnel 1,538 - 1,528 -
-refer 39(f) (iii )
(v) Salary and Allowances to Relatives of Key Management 13 1 12 1
Personnel - Mr. Anirudh
(vi) Dividend paid to Company in which Key Management 800 - 800 -
Personnel have Significant Influence - M/s Divi's Biotech
Private Limited
(vii) Lease Rent to a Company in which Key Management 775 - 719 -
Personnel have Significant Influence - M/s Divi's Properties
Private Limited
(viii) Rent Deposit to a Company in which Key Management - 319 - 325
Personnel have Significant Influence - M/s Divi's Properties
Private Limited
(f) Transactions with Related Parties:
March 31, 2019 March 31, 2018

Amount balance as balance as
Amount
(Transaction) at March 31, at March 31,
2019 2018
(i) Managerial Remuneration and short term employee
benefits to Key Management Personnel
1. Dr Murali K. Divi 5,881 5,766 4,020 3,906
2. Sri N.V. Ramana 2,990 2,885 2,059 1,955
3. Sri Madhusudana Rao Divi 99 5 99 4
4. Sri Kiran S Divi 2,023 1,925 1,402 1,305
5. Mrs Nilima Motaparti 68 3 51 3
11,061 10,584 7,631 7,173
Sitting fees to non-executive directors
6. Sri K.V.K. Seshavataram 10 - 8 -
7. Dr.G Suresh Kumar 12 - 11 -
8. Sri R Ranga Rao 13 - 11 -
9. Smt S. Sridevi - - 1 -
10. Dr.S. Ganapaty 7 - 3 -
11. Dr. Ramsh B V Nimmagadda 9 - 5 -
51 - 39 -
185

March 31, 2019 March 31, 2018

Amount balance as balance as
Amount
(Transaction) at March 31, at March 31,
2019 2018
(ii) Dividend paid to Key Management Personnel
1. Dr Murali K. Divi 1,557 - 1,557 -
2. Sri Kiran S Divi 4,600 - 4,600 -
3. Mrs Nilima Motaparti 5,400 - 5,400 -
4. Sri Madhusudana Rao Divi 51 - 58 -
5. Sri N.V. Ramana 56 - 92 -
11,664 - 11,707 -
(iii) Dividend paid to Relatives of Key Management
Personnel
1. Mr. Babu Rajendra Prasad Divi 3 - 3 -
2. Mr. Divi Radha Krishna Rao -* - -* -
3. Mr. Sri Ramachandra Rao Divi -* - 5 -
4. Mrs. Jhansilakshmi Pendyala 1 - 1 -
5. Mrs. Divi Swarna Latha 1400 - 1400 -
6. Mrs. Divi Raja Kumari 2 - 2 -
7. Mr. Divi Satyasayee Babu 20 - 36 -
8. Mrs. Shanti Chandra Attaluri 53 - 53 -
9. Mrs. Nimmagadda Nirmala Kumari 8 - 8 -
10. Mrs. N. Chandrika Ramana 9 - -* -
11. Mr. N. Venkata Aniruddh 12 - -* -
12. Mrs. N. Monisha 26 - 15 -
13. Mr. N. Prashanth 4 - 4 -
14. Mrs. L. Vijaya Lakshmi -* - 1 -
1538 - 1528 -
(g)
Terms and Conditions
Transactions relating to dividends were on the same terms and conditions that applied to other stake holders.
Note 41: Contingent Liabilities:
March 31, 2019 March 31, 2018

On account of Letter of Credit and Guarantees issued by the bankers. 10,877 11,806
Claims against the Group not acknowledged as debts in respect of:
(i) Disputed demands for excise duty, customs duty, sales tax and service tax for various 782 783
periods
(ii) Income Tax in relation to expenses disallowed in various assessments 18 22
Note: (a) It is not practicable for the Group to estimate the timings of cash flows, if any, in respect of the above pending resolution of the respective
proceedings.
186

Note: (b) Provident Fund
The Group is in the process of evaluating the impact of the recent Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs
The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284)
dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition
of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees' Provident Funds
& Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the aforesaid matter is not likely
to have a significant impact and accordingly, no provision has been made in these Financial Statements.
Note 42(a) : Commitments
March 31, 2019 March 31, 2018

Property, Plant and Equipment:
(i) Estimated amount of contracts remaining to be executed on capital account and not 46,711 8,803
provided for (Net of advances)
(ii) Capital commitment towards Special Economic Zone Re-investment Obligation 20,347 6,476
Others:
(iii) On account of bonds and / or legal agreements executed with Central Excise/ Customs 24,400 22,400
authorities/ SEZ Development Commissioners
Note 42(b): Leases
The Company has operating lease for office premise, which is renewable on a periodical basis and cancellable at its option. Rental expenses for
operating lease recognised in Statement of Profit and Loss for the year is H874 (Previous Year is H825)
Divis Laboratories (USA) Inc has entered into lease agreements for its office premises and vehicles. The future minimum lease payments are as below:
March 31, 2019 March 31, 2018

Not later than one year 17 72
Later than one year but not later than five years 140 45
Later than five years - -
Note 42(c): Payables to Micro, Small & Medium Enterprises
There are no dues to Micro, Small and Medium Enterprises as at year end. The identification of Micro, Small and Medium Enterprises as defined
under the provisions of "Micro, Small and Medium Enterprises development Act, 2006" is based on management knowledge of their status.
187

Note 43: Other disclosures:
(a) Additional Information required by Schedule III
Net Assets(Total Assets Share in Profit or (Loss) Share in Other Share in Total
31st March, 2019
minus Total Liabilities) Comprehensive Income Comprehensive Income
As % of As % of
As % of As % of Consolidated Consolidated
Name of the Entity in the
Consolidated Amount Consolidated Amount Other Amount Total Amount
Group
net assets Profit or (Loss) Comprehensive Comprehensive
Income Income
Parent:
Divi's Laboratories Limited 99.97% 6,97,331 98.29% 1,33,265 100.00% 105 98.29% 1,33,370
Sub-total (A) 6,97,331 1,33,265 105 1,33,370
Subsidiaries(Foreign):
Divis Laboratories (USA) Inc -* 4 1.09% 1,484 0.00% - 1.09% 1,484
Divi's Laboratories Europe AG 0.03% 223 0.62% 837 0.00% - 0.62% 837
Sub-total of subsidiaries (B) 227 2,321 - 2,321
Sub-total (A+B) 100% 6,97,558 100% 1,35,586 100% 105 100% 1,35,691
Adjustments arising out of (1843) (312) (140) (452)
Consolidation (c)
Total (A+B+C) 6,95,715 1,35,274 (35) 1,35,239
Note 44: Earnings per share
March 31, 2019 March 31, 2018

(a) Basic EPS
Basic earnings per share attributable to the equity holders of the company 50.96 33.04
(b) Diluted EPS
Diluted earnings per share attributable to the equity holders of the company 50.96 33.04
(c) Reconciliation of earnings used in calculating earnings per share
March 31, 2019 March 31, 2018

Basic earnings per share
Profit attributable to the equity holders of the company used in calculating basic earnings per 1,35,274 87,701
share
Diluted earnings per share
Profit attributable to the equity holders of the company used in calculating diluted earnings per 1,35,274 87,701
share
188

(d) Weighted average number of shares used as the denominator
March 31, 2019 March 31, 2018

Weighted average number of equity shares used as the denominator in calculating basic 26,54,68,580 26,54,68,580
earnings per share
Adjustments for calculation of diluted earnings per share: - -
Weighted average number of equity shares used as the denominator in 26,54,68,580 26,54,68,580
calculating diluted earnings per share
Note 45: Changes in Accounting Policies :
The Group applied Ind AS 115 for the first time using the modified retrospective method of adoption with the date of initial application of April
01,2018. Under this method any cumulative effect of initially applying Ind AS 115 can be shown as an adjustment to the opening balance of retained
earnings as at April 01, 2018. The effect on adoption of Ind AS 115 was insignificant and hence, no adjustments were made to opening balance
of retained earnings.
Note 46: Events occuring after the reporting period:
Refer Note 36 for the final dividend recommended by the Board which is subject to the approval of shareholders at the ensuing Annual General
Meeting.
Note 47: Previous year figures have been regrouped /reclassified to conform to current year classification.


189
Notice of Annual General Meeting

Notice is hereby given that the Twenty Ninth Annual General Meeting following resolution as an Ordinary Resolution:
(AGM) of the Members of DIVI’S LABORATORIES LIMITED (‘the Company’)
will be held on Friday, 23 August, 2019 at 10.00 A.M. at Global Peace “RESOLVED THAT, pursuant to the provisions of Section 149, 150,
Auditorium, Brahma Kumaris, Shanti Sarovar, Academy for Better World, 152 and 160 and other applicable provisions, if any, of the Companies
Gachibowli, Hyderabad – 500032, Telangana, India to transact the Act, 2013 (“Act”) and the rules made thereunder, as amended from
following business: time to time, read with Schedule IV of the Act, Prof. Sunaina Singh
(DIN: 08397250) who was appointed by the Board of Directors as
an Additional Director of the Company categorised as Independent
ORDINARY BUSINESS: Director with effect from 28 March, 2019 and who holds office up to the
Item No. 1 – Adoption of Financial Statements date of this Annual General Meeting of the Company in terms of Section
To consider and adopt the audited financial statements, including the 161(1) of the Act and the Articles of Association of the Company, being
audited consolidated financial statements, for the financial year ended eligible for appointment, be and is hereby appointed as an Independent
31 March 2019 and the reports of the Board of Directors and Auditors Director of the Company to hold office for a term of five consecutive
thereon. years upto 27 March, 2024, not liable to retire by rotation.”
Item No. 2 – Declaration of Dividend For and on behalf of the Board

To declare dividend for the financial year ended 31 March 2019
Item No. 3 – Appointment of Mr. Kiran S. Divi as Director Dr. Murali K. Divi
To appoint a director in place of Mr. Kiran S. Divi (DIN: 00006503), who Hyderabad Chairman & Managing Director
retires by rotation and being eligible, offers himself for re-appointment. 25 May 2019 (DIN: 00005040)
Item No. 4 – Appointment of Ms. Nilima Motaparti as Director

Registered Office:
To appoint a director in place of Ms. Nilima Motaparti (DIN: 06388001),
1-72/23(P)/DIVIS/303,
who retires by rotation and being eligible, offers herself for re-appointment.
Divi Towers, Cyber Hills,
Gachibowli, Hyderabad – 500 032
SPECIAL BUSINESS: CIN: L24110TG1990PLC011854
Item No.5 – Appointment of Prof. Sunaina Singh as an e-mail: mail@divislabs.com
To consider and, if thought fit, to pass with or without modification(s) the
NOTES: A person can act as a proxy on behalf of members not exceeding

fifty and holding in the aggregate not more than ten percent of
1. The information required to be provided under the SEBI (Listing the total share capital of the Company carrying voting rights. A
Obligations and Disclosure Requirements) Regulations, 2015 member holding more than ten percent of the total share capital of
(SEBI Listing Regulations) and the Secretarial Standards on the Company carrying voting rights may appoint a single person
General Meetings, in respect of the Directors who are proposed to as proxy and such person shall not act as a proxy for any other
be appointed/re-appointed and the relative Explanatory Statement member.
pursuant to Section 102 of the Companies Act, 2013, in respect
of the business under items 3-5 set out above is annexed hereto. 3. Corporate Members intending to send their authorized
representatives are requested to send a certified copy of the
2. A member entitled to attend and vote at the meeting, is Board resolution or upload it on the e-voting portal, authorizing
entitled to appoint a proxy to attend and vote instead their representatives to attend and vote at the Annual General
of himself and such proxy need not be a member of Meeting.
the Company. The instrument appointing proxy, duly
completed, should be deposited at the registered office 4. Members / proxies / authorized representatives are requested to
of the Company not less than forty-eight hours before the bring the attendance slips duly filled in for attending the meeting.
commencement of the meeting.
190
Notice
5. In case of joint holders attending the meeting, only such joint (i) Name of the Sole / First joint holder and the Folio Number.
holder who is higher in the order of names will be entitled to vote. (ii) Particulars of Bank account, viz.,
6. Members who hold shares in dematerialized form are requested to • Name of the Bank
write their Client ID and DP ID numbers and those who hold shares • Name of the Branch
in physical form are requested to write their Folio Number in the • Complete address of the Bank with Pin Code Number
attendance slip for attending the meeting.
• Account type, whether Savings (SB) or Current account
(CA)
7. Closure of Register of Members and Dividend:
• Bank Account Number allotted by the Bank
a. Register of Members and Transfer Books will be closed from
17 August 2019 to 23 August 2019 (both days inclusive) for 11. Shareholders holding shares in electronic form may kindly note
determining the names of the Members eligible for dividend, that their Bank account details as furnished by their Depositories to
if approved, on equity shares. In respect of shares held in the Company will be printed on their Dividend Warrants as per the
dematerialized mode, the dividend will be paid on the basis of applicable regulations of the Depositories and the Company will
particulars of beneficial ownership furnished by the Depositories for not entertain any direct request from such shareholders for deletion
this purpose. or change in such Bank details. Further, instructions, if any, already
given by them in respect of shares held in physical form will not
b. The Board of Directors of the Company at its meeting held on 25 be automatically applicable to shares held in the electronic mode.
May 2019 has recommended a dividend of H16/- per equity share of Shareholders are requested to intimate immediately any change
H2/- as final dividend for the financial year 2018-19. The dividend, if in their address or bank mandates to their depository participants
declared at the Annual General Meeting, will be paid within a period with whom they are maintaining their demat accounts; and if the
of 30 days from the date of declaration, to those members whose shares are held in physical form to Karvy.
names appear on the Register of Members as on 16 August 2019.
12. Non-Resident Indian Shareholders are requested to immediately
c. Members may please note that the Dividend Warrants are payable inform their Depository Participant in case of demat shares and
at par at the designated branches of the Bank printed on reverse Karvy in case of shares in physical form:
of the Dividend Warrant for an initial period of 3 months only. a. of the change in the Residential status on return to India for
Thereafter, the Dividend Warrant on revalidation is payable only at permanent settlement.
limited centers / branches. The members are, therefore, advised b. of the particulars of the Bank Account maintained in India with
to encash Dividend Warrants within the initial validity period. complete name, branch, account type, account number and
address of the Bank, if not furnished earlier.
8. M/s. Karvy Fintech Private Limited, (‘Karvy’), Karvy Selenium Tower
B, Plot No 31-32, Gachibowli, Financial Dist., Nanakramguda, 13. Members holding shares in single name and physical form are
Hyderabad–500 032 acts as the Company’s Registrar and Share advised to make nomination in respect of their shareholding in
Transfer Agent and all correspondence may be addressed directly the Company. Shareholders desirous of making nominations
to them. In respect of shares held in electronic form, shareholders are requested to send their requests to the Registrar and Share
have to send requests or correspond through their respective Transfer Agent, M/s. Karvy Fintech Private Limited.
Depository Participants.
14. Pursuant to the provisions of Section 124 of the Act, the unpaid
9. Members are advised to register/ update their address, e-mail or unclaimed dividend for the financial year 2011-12 is due to be
address and bank mandates with their depository participants in transferred to the Investor Education and Protection Fund (the
case shares are held in electronic form; and with the Company’s IEPF) established by the Central Government. Unclaimed dividend
Registrar and Share Transfer Agent, M/s. Karvy Fintech Private for the year(s) 2011-12, 2012-13, 2013-14, 2014-15, 2015-16
Limited in case shares are held in physical form. (interim dividend) 2016-17 and 2017-18 are held in separate Bank
accounts and shareholders who have not received the dividend/
10. Bank particulars: encashed the warrants are advised to write to the Company or
Registrar and Share Transfer Agents with complete details. The
In order to provide protection against fraudulent encashment of the
details of the unpaid/ unclaimed amounts lying with the Company
warrant, members holding shares in physical form are requested
as on 10 September 2018 (date of last Annual General Meeting)
to intimate Karvy under the signature of sole / first joint holder, the
are available on the website of the Company and on Ministry of
following information to be incorporated on the Dividend Warrants:
Corporate Affairs’ website.
191
Pursuant to the applicable provisions of the Act read with Investor 18. All documents referred to in this Notice are open for inspection
Education and Protection Fund Authority (Accounting, Audit, at the Registered Office of the Company between 11:00 a.m. to
Transfer and Refund) Rules, 2016 (as amended from time to time), 3:00 p.m. on any working day till the date of AGM.
equity shares in respect of which dividend has not been paid or
19. In compliance with provisions of Section 108 of the Act read with
claimed for seven consecutive years or more will be transferred to
Rule 20 of the Companies (Management and Administration)
the demat account of IEPF Authority. The Company has already
Rules 2014, as amended and Regulation 44 of the SEBI Listing
initiated necessary action for transfer of all shares in respect of
Regulations and the applicable Secretarial Standards on General
which dividend has not been paid or claimed by members for
Meetings (SS2), the Company is pleased to provide to the
seven consecutive years or more. Members are advised to visit
shareholders the facility to cast their vote electronically through
the website of the Company to ascertain the details of shares
e-voting services provided by M/s. Karvy Fintech Private Limited
liable for transfer in the name of IEPF Authority.
(“Karvy”) on all resolutions set forth in this Notice, from a place
The shareholders whose unclaimed dividend/ shares are other than the venue of the Meeting (Remote e-voting).
transferred to the IEPF Authority can now claim their unclaimed The facility for voting through ballot paper will also be made
dividend and shares from the Authority by following the Refund available at the AGM and the members attending the AGM who
Procedure as detailed on the website of IEPF Authority. have not already cast their votes by remote e-voting shall be able
to exercise their right at the AGM through ballot paper. Members
15. The annual report for the financial year 2018-19 is being sent through
who have cast their votes by remote e-voting prior to AGM may
email to those members who have opted to receive electronic
attend the AGM but shall not be entitled to cast their vote again.
communication or who have registered their email addresses with
the Registrar/depository participants as applicable. Physical copy of Process for remote e-voting:
the annual report has been sent to those members who have either
The Company has engaged the services of Karvy for facilitating
opted for the same or have not registered their email addresses with
remote e-voting to enable the Shareholders to cast their vote
the Registrar/Depository Participant. Members will be entitled to a
electronically.
physical copy of the annual report for the financial year 2018-19
upon sending a request to the Company. Notice of the 29th AGM A. Members who received the notice through e-mail from Karvy:
and the Annual Report 2018-19 will be available on the Company’s
i. Launch internet browser by typing the URL: https://
website www.divislabs.com.
evoting.karvy.com.
16. Members who would like to receive all communication including ii. Enter the login credentials (i.e., User ID and password
Annual Report, Notices, Circulars, etc., in electronic mode in lieu of mentioned in your email/sent separately). However, if
physical copy (in order to save paper) and who have not registered you are already registered with Karvy for e-voting, you
their e-mail addresses so far or who would like to update their can use your existing User ID and password for casting
e-mail addresses already registered, are requested to register/ your vote.
update their e-mail addresses:
User Id: For Members holding shares in Demat form:
• in respect of electronic shareholding – through their respective a. For NSDL: 8 character DP ID followed
Depository Participants; by 8 digit Client ID
b. For CDSL: 16 digit Beneficiary ID/Client ID
• in respect of physical shareholding – by sending a request For Members holding shares in Physical form:
to the Company’s Registrar and Share Transfer Agent, EVEN(E-Voting Event Number) followed by
mentioning therein their folio number and e-mail address. Folio Number.
Password Your unique password is sent separately/
17. The Securities and Exchange Board of India (SEBI) has mandated provided in the email forwarding the
the submission of Permanent Account Number (PAN) and bank electronic notice.
account details of the members holding securities in physical form. If required, please visit
Members holding shares in physical form have to compulsorily https://evoting.karvy.com or contact toll
furnish the details to RTA/ Company for registration /updation. free number 1-800-3454-001 for your
existing password.
Members holding shares in electronic form are also requested to
submit their PAN and bank details to their Depository Participants iii. After entering these details appropriately, Click on “LOGIN”.
with whom they are maintaining their demat accounts.
192
Notice
iv. You will now reach password change Menu wherein you xi. Voting has to be done for each item of the Notice
are required to mandatorily change your password. The separately. In case you do not desire to cast your vote
new password shall comprise of minimum 8 characters on any specific item it will be treated as abstained.
with at least one upper case (A-Z), one lower case (a-
z), one numeric value (0-9) and a special character B. In case of Members receiving AGM Notice by Post:
(@,#,$, etc.). The system will prompt you to change 1. Please use the User ID and initial password as provided
your password and update your contact details like in the AGM Notice Form.
mobile number, email ID, etc. on first login. You may also 2. Please follow all steps from Sr.No. i to xi as mentioned in
enter a secret question and answer of your choice to (A) above, to cast your vote.
retrieve your password in case you forget it. It is strongly
recommended that you do not share your password with C. In case of any query pertaining to e-voting, please refer to the
any other person and that you take utmost care to keep Help & FAQ’s section and E-voting user manual available at the
your password confidential. download section of https://evoting.karvy.com (Karvy e-voting
website) or contact Karvy’s toll free number 1-800-34-54-001
v. After changing password, you need to login again with or phone no. 040 – 6716 2222 for any further clarifications.
the new credentials.
D. The remote e-voting facility is available during the following
vi. On successful login, the system will prompt you to select period:
the “EVENT” i.e. Divi’s Laboratories Limited.
i. Commencement of remote e-voting: From 9.00 a.m. on
vii. On the voting page, enter the number of shares (which 19 August 2019
represents the number of votes) as on the cut-off date ii. End of remote e-voting: up to 5.00 p.m. on 22 August
under “FOR/AGAINST” or alternatively, you may partially 2019
enter any number in “FOR” and partially in “AGAINST” iii. The remote e-voting will not be allowed beyond the
but the total number in “FOR/AGAINST” taken together aforesaid date and time. The e-voting module shall be
should not exceed your total shareholding. If the disabled by Karvy upon expiry of aforesaid period.
shareholder does not indicate either “FOR” or “AGAINST”
it will be treated as “ABSTAIN” and the shares held will 20. Once the vote on a resolution is cast by a Member, the Member
not be counted under either head. shall not be allowed to change it subsequently. Further, the
Members who have cast their vote by remote e-voting shall not be
viii. You may then cast your vote by selecting an appropriate allowed to vote again at the Meeting.
option and click on “Submit”, a confirmation box will
be displayed. Click “OK” to confirm else “CANCEL” to 21. The Board of Directors of the Company at its meeting held on
modify. Once you have voted on the resolution, you will 25 May 2019 has appointed Mr. V Bhaskara Rao, Practicing
not be allowed to modify your vote. During the voting Company Secretary, as Scrutinizer to scrutinize the remote e-voting
period, Members can login any number of times till they and poll in a fair and transparent manner. He has communicated
have voted on the Resolution. his willingness to be appointed and will be available for the same
purpose. The Scrutinizer’s decision on the validity of e-voting shall
ix. Corporate/Institutional Members (i.e., other than be final.
Individuals, HUF, NRI, etc.) are additionally required to
send scanned certified true copy (PDF Format) of the 22. The voting rights for the shares are one vote per equity share,
Board Resolution/Power of Attorney/ Authority Letter, registered in the name of the shareholders / beneficial owners as
etc. together with attested specimen signature(s) of the on cut-off date i.e., 16 August 2019. Members holding shares
duly authorized representative(s), to the Scrutinizer at either in physical form or dematerialized form may cast their vote
email ID: bhaskararaoandco@gmail.com, with a copy electronically.
marked to evoting@karvy.com. The scanned image
23. Any person who becomes a member of the Company after the
of the above mentioned documents should be in the
dispatch of the Notice of the AGM and holds shares as on the cut-
naming format “Corporate Name_EVENT NO.”
off date i.e., 16 August 2019, may obtain User ID and password
x. Members holding shares under multiple folios/ demat in the manner as mentioned below:
accounts shall choose the voting process separately for
each of the folios/ demat accounts.
193
(a) If the mobile number of the member is registered against Folio 27. The result of the voting along with Scrutinizers’ Report will be
No./DP ID Client ID, the member may send SMS: MYEPWD communicated to the Stock Exchanges and will also be hosted on
<space> E-Voting Event Number+ Folio No. or DP ID Client the website of the Company www.divislabs.com and on Karvy’s
ID to 9212993399. website (https://evoting.karvy.com) within two (2) days of passing
of resolutions.
Example for NSDL: MYEPWD <SPACE> IN12345612345678
Example for CDSL: MYEPWD <SPACE> 1402345612345678 28. Pursuant to Regulation 44(6) of SEBI Listing Regulations, the
Example for Physical: MYEPWD <SPACE> XXXX1234567890 Company shall provide live webcast of proceedings of AGM
from 10.00 a.m. onwards on Friday, 23 August, 2019. Members
(b) If e-mail address or mobile number of the member is registered can view the proceeding of AGM by logging on to the e-voting
against Folio No./ DP ID Client ID, then on the home page website of Karvy at https://evoting.karvy.com using their remote
of https://evoting.karvy.com, the member may click “Forgot e-voting credentials, where the E-voting Event Number (“EVEN”) of
Password” and enter Folio No. or DP ID Client ID and PAN to Company will be displayed.
generate a password.
29. Members are requested to note that Karvy have launched
(c) Member may call Karvy’s toll free number 1-800-3454-001. a new mobile application - KPRISM and website
(d) Member may send an e-mail request at evoting@karvy.com. https://kprism.karvy.com for online service to shareholders.
Members can download the mobile application, register themselves
24. A person whose name is recorded in the register of members or (onetime) for availing host of services viz., consolidated portfolio
in the register of beneficial owners maintained by the depositories view serviced by Karvy, Dividends status and send requests for
as on the cut-off date i.e., 16 August 2019 shall only be entitled to change of Address, change / update Bank Mandate. Members
avail the facility of remote- e-voting and poll. can download Annual reports, standard forms and keep track of
upcoming General Meetings, IPO allotment status and dividend
25. The Scrutinizer after scrutinizing the votes cast at the meeting
disbursements.
(Poll) and through remote e-voting, will, not later than two days
of conclusion of the Meeting, make a consolidated scrutinizers’ The mobile application is available for download from Android
report and submit the same to the Chairman. Play Store. Sahreholders can also scan the below QR code
or alternatively visit the link https://kprism.karvy.com/app/ to
26. Resolutions shall be deemed to be passed on the date of AGM
download the mobile application.
subject to receipt of the requisite number of votes in favour of the
Resolutions.
Details of Directors seeking appointment/re- Directorships held in other companies

appointment at the AGM as required under Regulation
Divi’s Biotech Private Limited
36(3) of SEBI Listing Regulations, Section 102 of the
Divi’s Resorts and Agro Farms Private Limited
Companies Act, 2013, and the applicable Secretarial
Divi’s Properties Private Limited
Standard on General Meetings:
Memberships/ Chairmanships of Committees in other
Item No. 3
companies
Mr. Kiran S. Divi (43 years) is a graduate in Pharmaceutical Sciences
He is neither a Member nor Chairman of Committees of other
from College of Pharmacy, Manipal, Karnataka and holds a post-
Companies.
graduate degree in Pharmacy from Jawaharlal Nehru Technological
University (JNTU), Kakinada, Andhra Pradesh. Shareholding in the company
He joined the Board of the Company on August 10, 2001 and has He holds 5,40,00,000 equity shares of the Company.
been designated as Whole-time Director. Mr. Kiran Divi was involved
in understanding the markets in USA for active pharma ingredients For details such as number of meetings of the Board attended during
and intermediates for about two years before joining the Board. the year and remuneration drawn, please refer to the Board’s Report
Mr. Kiran is responsible for marketing, regulatory affairs and operations of and the Corporate Governance Report.
the Company.
194
Notice
Except Mr. Kiran S. Divi, Dr. Murali K. Divi, Ms. Nilima Motaparti and Except Ms. Nilima Motaparti, Dr. Murali K. Divi, Mr. Kiran S. Divi and
their relatives, none of the Directors or Key Managerial Personnel of their relatives, none of the Directors or Key Managerial Personnel of
the Company is in any way, concerned or interested in the resolution. the Company is, in any way, concerned or interested in the resolution.
The Board commends the Resolution at Item No. 3 for approval by the The Board commends the Resolution at Item No. 4 for approval by the
members. members.
Item No. 4
Explanatory Statement
Ms. Nilima Motaparti (37 years) has a Master’s Degree in International
Business from Gitam Institute of Foreign Trade, Visakhapatnam and Item No. 5
Masters in International Finance from Glasgow University, U.K. Ms.
The Board of Directors of the Company appointed Prof. Sunaina Singh
Nilima has significant international exposure in UK and Scotland for
as an Additional Director of the Company categorised as Independent
over 5 years before joining the Company and has commercial acumen
Director with effect from 28 March, 2019, pursuant to the provisions of
and familiarity with international environment on material requirement
Section 161(1) of the Companies Act, 2013 (“Act”) and the Articles of
planning and finance.
Association of the Company.
Ms. Nilima Motaparti joined the Company on July 2, 2012 as Chief
In terms of the provisions of Section 161(1) of the Act, Prof. Sunaina
Controller (Commercial) in the management cadre of the Company.
Singh will hold office up to the date of the ensuing Annual General
She joined the Board of the Company on May 27, 2017 and has been
Meeting.
designated as Whole-time Director. She oversees the commercial
functions comprising procurement as well as finance/accounting/ Prof. Sunaina Singh is not disqualified from being appointed as a
secretarial, CSR Projects and work towards cost control and Director in terms of Section 164 of the Act and has given her consent
compliances in these areas. She has played a key role in helping the to act as a Director.
Company to implement just-in time inventory management and global
procurement practices. The Company has received a declaration from Prof. Sunaina Singh
that she meets with the criteria of independence as prescribed under
Directorships held in other companies sub-section (6) of Section 149 of the Act and SEBI Listing Regulations.
The resolution seeks the approval of members for the appointment of
Divi’s Biotech Private Limited
Prof. Sunaina Singh as an Independent Director of the Company for a
Divi’s Resorts and Agro Farms Private Limited
period of 5 years up to March 27, 2024 pursuant to Section 149 and
Divi’s Properties Private Limited
other applicable provisions of the Act and Rules made thereunder and
Memberships/ Chairmanships of Committees in other she is not liable to retire by rotation.
companies
The Company has received a notice in writing from a member under
She is neither a Member nor Chairman of Committees of other Section 160 of the Companies Act, 2013, proposing her candidature
Companies. for the office of Independent Director of the Company.
Shareholding in the company In the opinion of the Board, Prof. Sunaina Singh fulfills the conditions
for her appointment as an Independent Director as specified in the Act
She holds 5,40,00,000 equity shares of the Company. and SEBI Listing Regulations. Prof. Sunaina Singh is independent of
the management.
For details such as number of meetings of the Board attended during
the year and remuneration drawn, please refer to the Board’s Report Prof. Sunaina Singh (63 years) has a doctorate degree from Osmania
and the Corporate Governance Report. university and is presently the Vice Chancellor of Nalanda University,
195
an internationally acclaimed historical university under the Ministry of resolution relates, is in any way, concerned or interested, financially or
External Affairs. A distinguished academician and administrator, she otherwise, in the resolution. The Board commends the Resolution at
also holds the position of the Vice President, Indian Council for Cultural Item No. 5 for approval by the members.
Relations (ICCR); is Member, Governing Council, Association of Indian
Universities (AIU); Member Comprehensive Language Policy of India;
Academic Advisor, National Cyber Safety and Security Standards
(NCSSS) and Governing Board Member, India Foundation, a think tank. For and on behalf of the Board
She was conferred with many prestigious awards.
Dr. Murali K. Divi
Prof. Sunaina Singh does not hold any shares of the Company. She Hyderabad Chairman & Managing Director
is neither a director nor a Member /Chairman of Committees of other 25 May 2019 (DIN: 00005040)
companies.
Registered Office:
Copy of the draft letter of appointment of Prof. Sunaina Singh as an
1-72/23(P)/DIVIS/303,
Independent Director setting out the terms and conditions is available
Divi Towers, Cyber Hills,
for inspection by members at the Registered Office of the Company.
Gachibowli, Hyderabad – 500 032
None of the Directors or Key Managerial Personnel of the Company CIN: L24110TG1990PLC011854
and / or their relatives, except Prof. Sunaina Singh to whom the e-mail: mail@divislabs.com
196
CIN : L24110TG1990PLC011854
Divi Towers, 1-72/23(P)/DIVIS/303 Cyber Hills, Gachibowli, Hyderabad - 500 032, Telangana, India.
Tel.: +91 40 2378 6300; Fax: +91 40 2378 6460
E-mail : mail@divislabs.com URL : www.divislabs.com
Share Transfer Agent : M/s. Karvy Fintech Private Limited, Karvy Selenium Tower B, Plot No 31-32,
Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032
ATTENDANCE SLIP
Regd. Folio No. * DP ID :
No. of Equity Shares held * Client ID :
Name of the Shareholder
Name of Proxy
I/We hereby record my/our presence at the 29th Annual General Meeting of the Company to be held at Global Peace Auditorium, Brahma Kumaris,
Shanti Sarovar, Academy for Better World, Gachibowli, Hyderabad – 500 032 at 10.00 A.M. on Friday, 23 August, 2019.
SIGNATURE OF THE MEMBER OR THE PROXY ATTENDING THE MEETING
If Member, Please sign here If Proxy, Please sign here
Note : This form should be signed and handed over at the Meeting Venue.
* Applicable for investors holding shares in electronic form.
AGM Venue Route Map
Old Mumbai Hwy Gachibowli Rd
Greenland Colony
ISB Road
IDBI Staff College rs

te
Quar
RA
GP
Gachibowli
Pullela Gopichand Academy Road
oad
ter ring R
ad
ISB Road
Boulder Hills Ro
Nehru Ou
Brahma Kumaris
Shanti Sarovar
Serene county
Infosys
Boulder Hills Road
Emaar MGF
Nehru Outer ring Road

Boulder Hills Madhava Reddy
Colony
ISB Road
Holiday Inn Express & Suites

Wipro Campus Hyderabad Gachibowli
guda Road Nanakramgu

Nanakram da Road
Scan the QR code on your smartphone

for directions on Google Maps
CIN : L24110TG1990PLC011854
Divi Towers, 1-72/23(P)/DIVIS/303 Cyber Hills, Gachibowli, Hyderabad - 500 032, Telangana, India.
Tel.: +91 40 2378 6300; Fax: +91 40 2378 6460
E-mail : mail@divislabs.com URL : www.divislabs.com
Share Transfer Agent : M/s. Karvy Fintech Private Limited, Karvy Selenium Tower B, Plot No 31-32,
Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032
PROXY FORM
(Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014)
Name of the Member(s) .....................................................................................................................................................................................
Registered address : .........................................................................................................................................................................................
E-mail id : .........................................................................................................................................................................................................
Folio No./Client ID : ...........................................................................................................................................................................................
DP ID : ..............................................................................................................................................................................................................
I/We, being the member(s) of ...............................................................................................shares of the above named Company, hereby appoint
1. Name ........................................................................................................................................................................................................
Address ....................................................................................................................................................................................................
E-mail id ................................................................................. Signature ..............................................................................., or failing him
2. Name ........................................................................................................................................................................................................
Address ....................................................................................................................................................................................................
E-mail id ................................................................................. Signature ..............................................................................., or failing him
3. Name ........................................................................................................................................................................................................
Address ....................................................................................................................................................................................................
E-mail id ................................................................................. Signature ...................................................................................................
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 29th Annual General Meeting of the Company to be held at
Global Peace Auditorium, Brahma Kumaris, Shanti Sarovar, Academy for Better World, Gachibowli, Hyderabad – 500 032 at 10.00 A.M. on Friday,
23 August 2019 and at any adjournment thereof in respect of such resolutions as are indicated below:
** I/We wish my above proxy(ies) to vote in the manner as indicated in the box below :
Resolutions For Against Abstain

1 Adoption of Audited Financial Statements (Standalone and Consolidated) for the year
ended 31 March, 2019 along with the Reports of the Board of Directors and Auditors
thereon
2 Declaration of dividend on Equity Shares for the financial year ended 31 March, 2019
3 Appointment of Mr. Kiran S. Divi (DIN: 00006503), who retires by rotation and being
eligible, offers himself for re-appointment
4 Appointment of Ms. Nilima Motaparti (DIN: 06388001), who retires by rotation and
being eligible, offers herself for re-appointment
5 Appointment of Prof. Sunaina Singh, (DIN: 08397250) as an Independent Director.
Affix a
Signed this ......................... day of .......................... 2019. revenue
stamp
Signature of shareholder
Signature of first proxy holder Signature of second proxy holder Signature of third proxy holder
**This is only optional. Please put a ‘√’ in the appropriate column against the resolutions indicated in the Box. Alternatively, you may mention the number of shares in the appropriate
column in respect of which you would like your proxy to vote. If you leave all the columns blank against any or all the resolutions, your proxy will be entitled to vote in the manner
as he/she thinks appropriate.
Note :
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement
of the Meeting.
2. A proxy need not be a member of the Company.
3. In case the appointer is a body corporate, the proxy form should be signed under its seal or be signed by an officer or an attorney duly authorized by it and an authenticated
copy of such authorisation should be attached to the proxy form.
4. A person can act as proxy on behalf of such number of Members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the
Company carrying voting rights. Further, a member holding more than ten percent, of the total share capital of the company carrying voting rights, may appoint a single person
as proxy and such person shall not act as proxy for any other Member.
5. Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes.
6. In case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.
Disclaimer
Some information in this report may contain forward-looking statements which include statements
regarding Company’s expected financial position and results of operations, business plans and
prospects etc. and are generally identified by forward-looking words such as “believe,” “plan,”
“anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or other similar words. Forward-looking
statements are dependent on assumptions or basis underlying such statements. We have
chosen these assumptions or basis in good faith, and we believe that they are reasonable in
all material respects. However, we caution that actual results, performances or achievements
could differ materially from those expressed or implied in such forward-looking statements. We
undertake no obligation to update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise.
a K&A creation | www.kalolwala.co.in
Registered office:
Divi Towers, 1-72/23(P)/DIVIS/303, Cyber Hills, Gachibowli, Hyderabad - 500 032, Telangana, India
Phone : 040 - 2378 6300, Fax : 040 - 2378 6460, E-mail : mail@divislabs.com, www.divislabs.com

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Sustainable

29th Annual Report 2018-19

Board of Directors 02 Independent

Sustainable Performance 06 Standalone

Notes to the Consolidated

Notice of Annual General Meeting 190

You can also find this report online on:

3. Madhusudana Rao Divi

6. Prof. Sunaina Singh

Manufacturing Facilities R&D Centres Subsidiaries

Divi’s Pharma SEZ:

DSN SEZ Unit:

Date, Time and Venue of AGM Registered Office

Divi’s is leading manufacturer of active pharma ingredients

50% 53% 8% 53%

TOTAL REVENUE PBT GROSS FIXED EPS DIVIDEND

EBIDTA PAT NETWORTH BOOK VALUE MARKET

DIRECT ECONOMY IMPACT

Geographical Market Presence

FY2017 FY2018 FY2019 FY2017 FY2018 FY2019

% Share 33% 28.98% 26.85% % Share 11.66% 9.25% 12.49%

FY2017 FY2018 FY2019 FY2017 FY2018 FY2019

FY2017 FY2018 FY2019

Sales H Lakhs 52097 48014 56266

# Inclusive of excise duty

At Divi’s we diligently follow our social responsibility efforts to strive to create a

Our key focus areas:

Promoting Public Rural

Empowering Promoting Animal Welfare &

Support to Differently Livelihood Safe Drinking

Key Activities Outcomes in FY 2018-19

Key Activities Outcomes in FY 2018-19

We provided teaching/learning materials to

Mid-day Meal Initiative for schools

On TB day, we extended our support to TB patients in 100+ villages by providing

Promoting Rural Sports

Support for Constitutional Level Sports Meet

Support to Mr. Paravada Krishna for

Animal Welfare and Dairy Development

Support to differently abled

Safe Drinking water

Drinking Water Tanks

• Continuously reviewing and evaluating

• Recover, recycle and reuse solvents by

• Standardise material handling and reduce

• Minimise consumption of utilities like steam,

• Effective water conservation by improving

• Process wastes generated are sent to

• Provide and maintain significant greenery

Business Responsibility Report

1. Corporate Identity Number (CIN) of the Company L24110TG1990PLC011854

Section B: Financial Details of the Company

1. Paid-up Capital H5309 Lakhs

Section C: Other Details

1. Does the Company have any Subsidiary Company/ Companies? Yes

1. Details of Director/ Directors responsible for BR

2. Principle-wise (as per NVGs) BR Policy/policies

Principle-wise Index: Principle 2: Businesses should provide goods and

1. Has the company mapped its internal and external