Unichem Laboratories Ltd. — Interim / Quarterly Report 2024

Jul 14, 2023

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July 14, 2023

Department of Corporate Services Mr. Hari K

Bombay Stock Exchange Ltd. Asst. Vice President - Operations Phiroze Jeejeebhoy Towers National Stock Exchange of India Ltd Dalal Street, Exchange Plaza, Bandra – Kurla Complex Mumbai- 400 001 Bandra (East), Mumbai – 400 051

Dear Sir,

Ref: BSE Scrip Code -506690: NSE Symbol – UNICHEMLAB

Sub: Outcome of Board Meeting

We would like to inform you that the Board of Directors at its Meeting held today, i.e. Friday, July 14, 2023, approved the Unaudited Financial Results (Standalone & Consolidated) for the first quarter ended June 30, 2023. Enclosed herewith please find the Unaudited Financial Results (Standalone & Consolidated) for the first quarter ended June 30, 2023, and the Auditors Reports thereon.

The Board Meeting commenced at 1:45 p.m. and concluded at 2:30 p.m.

Kindly take the same on your records.

Thanking you,

FOR UNICHEM LABORATORIES LIMITED

PRADEEP Digitally signed by PRADEEP BHANDARI BHANDARI Date: 2023.07.14 14:32:46 +05'30' PRADEEP BHANDARI Head- Legal & Company Secretary

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Encl: a/a

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Registered Office: Unichem Bhavan, Prabhat Estate, Off S. V. Road Jogeshwari (West), Mumbai – 400 102, Maharashtra, India.

UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023

UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Standalone Unaudited Results for the Quarter ended 30th June, 2023
	₹ Lakhs
Particulars	Quarter ended			Year ended
	30.06.2023	31.03.2023	30.06.2022	31.03.2023
	Unaudited	Unaudited	Unaudited	Audited
I II Revenue from operations Other income	34,666.70 582.62	31,006.43 378.84	24,478.13 1,184.53	1,07,243.22 4,184.75
III Total income (I+II)	35,249.32	31,385.27	25,662.66	1,11,427.97
IV EXPENSES Changes in inventories of finished goods and work-in-progress Finance costs Impairment loss on financial assets Other expenses Depreciation and amortization expenses Cost of materials consumed Purchase of stock-in-trade Employee benefits expense	17,198.16 24.38 (444.16) 7,361.40 247.53 - 2,736.27 9,696.04	15,573.40 48.89 481.96 6,606.78 293.18 170.87 2,831.75 8,997.65	12,058.23 44.95 (1,783.41) 6,706.12 166.66 56.95 2,256.97 8,484.10	50,033.50 152.65 2,201.32 27,086.47 938.02 341.72 10,597.92 36,718.90
Total expenses(IV)	36,819.62	35,004.48	27,990.57	1,28,070.50
V VI Profit / (Loss) before exceptional items and tax (III-IV) Exceptional items - expenses(Refer note 8)	(1,570.30) -	(3,619.21) 10,764.20	(2,327.91) -	(16,642.53) 11,266.44
VII Profit /(Loss) before tax(V-VI)	(1,570.30)	(14,383.41)	(2,327.91)	(27,908.97)
VIII (1) Current tax (2) Deferred tax charge / (credit) (Refer note 4) (3) Short / (excess) provision for tax (earlier years) Tax expense	- - -	- - -	- - -	- 2,061.22 -
	-	-	-	2,061.22
IX Profit / (Loss) for the period after tax (VII-VIII)	(1,570.30)	(14,383.41)	(2,327.91)	(29,970.19)
X A. (i) Items that will not be reclassified subsequently to profit or loss - Remeasurement of the net defined benefit plan - Equity instruments through other comprehensive income (ii) Income tax (expense) / credit relating to items that will not be reclassified to profit or loss - Remeasurement of the net defined benefit plan - Equity instruments through other comprehensive income (net) B. (i) Items that will be reclassified to profit or loss (ii) Income tax relating to items that will be reclassified to profit or loss Other Comprehensive Income / (Loss)	(17.87) - - - - -	41.52 - - - - -	206.16 - - - - -	224.63 1,586.82 - 2,061.22 - -
Total of Other Comprehensive Income /(Loss)	(17.87)	41.52	206.16	3,872.67
XI Total Comprehensive Income for theperiod(IX+X)	(1,588.17)	(14,341.89)	(2,121.75)	(26,097.52)
XII XIII Other Equity (Reserves excludingrevaluation reserve) Paid-up equity share capital (Face value of ₹ 2/- per share)	1,408.12	1,408.12	1,408.12	1,408.12 2,37,018.94
XIV (1) Basic (2) Diluted Earnings per equity share (Face value of ₹ 2/- per share) (not annualized)	(2.23) (2.23)	(20.43) (20.43)	(3.31) (3.31)	(42.57) (42.57)
Notes: 1 The above unaudited standalone financial results ("the Statement") for the quarter ended 30th June, 2023 have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on 14th July, 2023. The statutory auditors have expressed a qualified audit conclusion on these standalone financial results for the quarter ended 30th June, 2023, in regard to the matter given in note 5 below.
2 3 4 Deferred tax asset is recognised on the amount of tax loss, unabsorbed tax depreciation and other temporary differences to the extent of deferred tax liability. The above unaudited standalone financial results have been prepared in accordance with the guidelines issued by the Securities and Exchange Board of India ("SEBI") and the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013. Operating Segment: The Company has a single reportable segment i.e. 'Pharmaceuticals'.

2 The above unaudited standalone financial results have been prepared in accordance with the guidelines issued by the Securities and Exchange Board of India ("SEBI") and the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

• 3 Operating Segment: The Company has a single reportable segment i.e. 'Pharmaceuticals'.

4 Deferred tax asset is recognised on the amount of tax loss, unabsorbed tax depreciation and other temporary differences to the extent of deferred tax liability.

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5

On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd. (“Niche”) contending that they had acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited.

In this regard, the statutory auditors of Niche had given qualified audit opinion on the financial statements of Niche for the year ended 31st March, 2023 and continued the qualification in their limited review report for the quarter ended 30th June, 2023. They had stated that, "previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, however, following the hearing in October 2021 and their review of the available documentation, their opinion is that it is more likely than not that Niche will be liable for the fine of Euro 13.96 million (equivalent to ₹ 12,437.22 lakhs) and hence, they believe that this should be provided for in the financial statement of Niche. As per the Board of Directors of Niche, there remains an inherent uncertainty as to the outcome of the appeal and therefore, the Directors are of the opinion that no provision should be made at this point of time." The management had obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and the matter is continued to be disclosed under contingent liability.

As at last audited balance sheet date, the Company had aggregate financial exposure of ₹ 12,837.13 lakhs in Niche comprising of investment, trade receivable and corporate guarantee given to bank for loan availed by Niche. Considering the impact of ongoing litigation as elaborated in the above para, loss for the year ended 31st March, 2023 and accumulated losses in Niche as at last audited balance sheet date, the statutory auditors of the Company are of the view that the Company would need to provide for impairment on the financial exposure of ₹ 12,837.13 lakhs.

Considering the above uncertainty in regard to ongoing litigation related to EU matter and circumstances prevailing as at the last audited balance sheet date, such as past performance, results, accumulated losses, negative net worth, expected cash flows, the management of the Company on the basis of abundant precaution had made full provision in the quarter and year ended 31st March, 2023 towards impairment of long-term investment in Niche amounting to ₹ 6,909.36 lakhs, such provision is grouped under exceptional item in the Statement. Further, the management is of the view that no further provision is required for the balance financial exposure of ₹ 5,927.77 lakhs in view of the future business outlook, unless the outcome of EU matter is not in favour of the subsidiary.

On the above matter, the auditors of the Company had given a qualified opinion in their audit report on the Statement for the year ended 31st March, 2023 and continued the qualification in their limited review report for the quarter ended 30th June, 2023.

• 6 During the quarter and year ended 31st March, 2023, the Company on the basis of abundant precaution had made a full provision towards impairment of long-term investment in its wholly owned subsidiary "Unichem Laboratories Ltd, Ireland" amounting to ₹ 2,104.84 lakhs which is grouped under exceptional item in the Statement. The management had made this provision after an internal assessment based on circumstances prevailing as at the last audited balance sheet date, such as past performance, results, accumulated losses, negative net worth and expected cash flows.

• 7 During the year ended 31st March, 2023, the Company had sold specified number of shares held in Optimus Drugs Private Limited ('Investee' or ‘Optimus’) to Sekhmet Pharmaventures Private Limited (‘Purchaser’) in terms of Share Purchase Agreement (‘SPA’) dated 10th May, 2022. Further, the number of shares sold included additional equity shares issued to Company pursuant to conversion of bonus Compulsory Convertible Preference Shares which were allotted to the Company during the year and the net gain on disposal of investments amounting to ₹ 1,084.58 lakhs was accounted / disclosed as follows:

Exceptional item

This represents gain / loss on disposal of 7,29,849 equity shares out of additional equity shares issued to the Company during the year ended 31st March, 2023 by Optimus pursuant to conversion of bonus Compulsory Convertible Preference Shares. The net loss of ₹ 502.24 lakhs was determined after reducing from sale proceeds fair value of bonus equity shares and related transaction cost incurred on such sale.

Recognized in OCI

The net gain of ₹ 1,586.82 lakhs (before related taxes thereon) on disposal of equity shares of Optimus which was accounted under ‘Fair Value through Other Comprehensive Income’ category.

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8 9 10 11 12	The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.	The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.	The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.	The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.	The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.
	Exceptional Items comprise of the following:
		₹ Lakhs
	Particulars	Quarter ended			Year ended
		30.06.2023	31.03.2023	30.06.2022	31.03.2023
	Impairment of investment in subsidiary "Niche Generics Limited, United Kingdom" (refer note 5 above)	-	6,909.36	-	6,909.36
	Impairment of investment in subsidiary "Unichem Laboratories Limited,Ireland"(refer note 6 above)	-	2,104.84	-	2,104.84
	(Gain) / Loss on disposal of investment (refer note 7 above)	-	-	-	502.24
	Employee benefits expense (one-time discretionary loyalty bonus)	-	1,750.00	-	1,750.00
	Total Exceptional Item- expenses	-	10,764.20	-	11,266.44
	₹ Lakhs The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:
	Particulars	Quarter ended			Year ended
		30.06.2023	31.03.2023	30.06.2022	31.03.2023
	Total R&D expenditure	2,682.46	2,947.99	2,205.28	10,939.82
	Subsequent to the quarter ended 30th June 2023, the Company has granted 5,00,000 stock options to the eligible employee of its subsidiary company. The Board of Directors at its meeting held on 26th June, 2023, approved the re-appointment of Dr. Prakash A. Mody as the Chairman & Managing Director of the Company for a period of three years commencing from July 1, 2023, subject to the approval of Shareholders. The Statement includes unaudited results for the quarter ended 31st March, 2023 being the derived figures between the audited annual figures in respect of the financial year ended 31st March, 2023 and the published unaudited figures for the nine months ended 31st December, 2022, which were subjected to a limited review.
	By Order of the Board For Unichem Laboratories Limited Dr. Prakash A. Mody Place: Mumbai Chairman & Managing Director Date: 14thJuly,2023 DIN:00001285 Prakash Amrut Mody Digitally signed by Prakash Amrut Mody Date: 2023.07.14 14:30:45 +05'30'

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UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023

UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023	UNICHEM LABORATORIES LIMITED CIN: L99999MH1962PLC012451 Statement of Consolidated Unaudited Results for the Quarter ended 30th June, 2023
	₹ Lakhs
Particulars	Quarter ended			Year ended
	30.06.2023	31.03.2023	30.06.2022	31.03.2023
	Unaudited	Unaudited	Unaudited	Audited
I II Revenue from operations Other income	42,318.65 863.07	40,209.94 511.07	30,960.83 784.74	1,34,302.22 3,851.51
III Total income(I+II)	43,181.72	40,721.01	31,745.57	1,38,153.73
IV EXPENSES Changes in inventories of finished goods and work-in-progress Cost of materials consumed Purchase of stock-in-trade Employee benefits expense Finance costs Other expenses Impairment loss on financial assets Depreciation and amortization expenses	17,626.60 24.38 (806.86) 9,880.83 576.12 - 2,877.12 12,791.90	15,966.02 48.89 1,319.53 8,872.65 552.45 170.87 2,968.30 12,183.56	12,848.25 44.95 (1,867.23) 8,776.75 301.12 56.95 2,454.54 11,197.70	53,219.93 152.65 1,720.09 35,641.05 1,731.25 341.72 11,344.37 47,782.32
Total expenses(IV)	42,970.09	42,082.27	33,813.03	1,51,933.38
V VI VII Share of profit / (loss) in associate (net of tax) Profit / (Loss) before exceptional items and tax (III- IV+V) Exceptional items - expenses(Refer note 7)	- 211.63 -	- (1,361.26) 3,354.40	- (2,067.46) -	- (13,779.65) 3,856.64
VIII Profit /(Loss) before tax(VI-VII)	211.63	(4,715.66)	(2,067.46)	(17,636.29)
IX (1) Current tax (2) Deferred tax charge / (credit) (Refer note 4) (3) Short / (excess) provision for tax (earlier years) Tax expense	82.90 195.56 -	290.47 (525.44) (54.14)	300.22 (30.81) -	1,105.63 1,534.98 (54.14)
	278.46	(289.11)	269.41	2,586.47
X Profit /(Loss) for theperiod after tax(VIII-IX)	(66.83)	(4,426.55)	(2,336.87)	(20,222.76)
XI A. (i) Items that will not be reclassified subsequently to profit or loss - Remeasurement of the net defined benefit plan - Equity instruments through other comprehensive income (ii) Income tax (expense) / credit relating to items that will not be reclassified to profit or loss - Remeasurement of the net defined benefit plan - Equity instruments through other comprehensive income (net) B. (i) Items that will be reclassified to profit or loss (Foreign currency translation difference) (ii) Income tax relating to items that will be reclassified to profit or loss Other Comprehensive Income / (Loss)	(17.87) - - - (233.11) -	41.52 - - - (301.45) -	206.16 - - - 479.24 -	224.63 1,586.82 - 2,061.22 719.82 -
Total of Other Comprehensive Income /(Loss)	(250.98)	(259.93)	685.40	4,592.49
XII Total Comprehensive Income for theperiod(X+XI)	(317.81)	(4,686.48)	(1,651.47)	(15,630.27)
XIII Paid-upequityshare capital(Face value of ₹ 2/-per share)	1,408.12	1,408.12	1,408.12	1,408.12
XIV Other Equity (Reserves excludingrevaluation reserve)				2,42,122.29
XV (1) Basic (2)Diluted Earnings per equity share (Face value of ₹ 2/- per share) (not annualized)	(0.09) (0.09)	(6.28) (6.28)	(3.32) (3.32)	(28.72) (28.72)
Notes: 1 The above unaudited consolidated financial results ("the Statement") for the quarter ended 30th June, 2023 have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on 14th July, 2023. The statutory auditors have expressed a qualified audit conclusion on these consolidated financial results for the quarter ended 30th June, 2023, in regard to the matter given in note 5 below.

Notes:

1 The above unaudited consolidated financial results ("the Statement") for the quarter ended 30th June, 2023 have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at its meeting held on 14th July, 2023. The statutory auditors have expressed a qualified audit conclusion on these consolidated financial results for the quarter ended 30th June, 2023, in regard to the matter given in note 5 below.

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• 2 The above unaudited consolidated financial results have been prepared in accordance with the guidelines issued by the Securities and Exchange Board of India ("SEBI") and the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

• 3 Operating Segment: The Company has a single reportable segment i.e. 'Pharmaceuticals'.

• 4 In respect of the Company, deferred tax assets is recognised on the amount of tax loss, unabsorbed tax depreciation and other temporary differences to the extent of deferred tax liability.

In respect of a subsidiary, deferred tax assets (net) are recognised as per applicable tax laws.

• 5 On 9th July, 2014, the European Commission (“EU”) decided to impose an unjustified fine of Euro 13.96 million, jointly and severally on the Company and its subsidiary Niche Generics Ltd. (“Niche”) contending that they had acted in breach of EU competition law as Niche had, in early 2005 (when the Company was only a part owner and financial investor in Niche) agreed to settle a financially crippling patent litigation with Laboratories Servier. The Company vehemently denies any wrongdoing on the part of either itself or Niche. Both the Company and Niche had submitted appeals in September 2014 to the General Court of the EU seeking appropriate relief in the matter. The General Court of the EU has rejected the appeals vide Order dated 12th December, 2018 and confirmed the fine of Euro 13.96 million. The Company and its subsidiary based on legal advice and merits, have filed appeals against the decision of General Court before the Court of Justice of the EU and outcome of the appeals are awaited. The management has obtained the counsel view on this matter and they have stated that there has not been any formal change in position after the last hearing and the uncertainty as in the past continues. Considering the status quo, in view of the management, no provision for the aforesaid fine is considered necessary and fine imposed by the EU of Euro 13.96 million (equivalent to ₹ 12,437.22 lakhs) is continued to be disclosed under contingent liability.

On the above matter, the auditors of Niche have given qualified conclusion in their limited review report and the statutory auditor of the Company have reported the said qualification in their limited review report on the Statement for the quarter ended 30th June, 2023. The above matter was also qualified in the audit reports issued by auditors of the Niche and statutory auditors of the Company for the year ended 31st March, 2023.

• 6 During the year ended 31st March, 2023, the Company had sold specified number of shares held in Optimus Drugs Private Limited ('Investee' or ‘Optimus’) to Sekhmet Pharmaventures Private Limited (‘Purchaser’) in terms of Share Purchase Agreement (‘SPA’) dated 10th May, 2022. Further, the number of shares sold included additional equity shares issued to Company pursuant to conversion of bonus Compulsory Convertible Preference Shares which were allotted to the Company during the year and the net gain on disposal of investments amounting to ₹ 1,084.58 lakhs was accounted / disclosed as follows:

Exceptional item

This represents gain / loss on disposal of 7,29,849 equity shares out of additional equity shares issued to the Company during the year ended 31st March, 2023 by Optimus pursuant to conversion of bonus Compulsory Convertible Preference Shares. The net loss of ₹ 502.24 lakhs was determined after reducing from sale proceeds fair value of bonus equity shares and related transaction cost incurred on such sale.

Recognized in OCI

The net gain of ₹ 1,586.82 lakhs (before related taxes thereon) on disposal of equity shares of Optimus which was accounted under ‘Fair Value through Other Comprehensive Income’ category.

The balance number of unsold equity shares with carrying value of ₹ 28.77 lakhs as at the last audited balance sheet date are classified as Fair Value through Profit and Loss. This is based on the fair valuation report obtained during the year ended 31st March, 2023. Considering audited accounts of Optimus for the year ended 31st March, 2023 are not received, fair value could not be determined as at last audited balance sheet date and quarter ended 30th June, 2023 and accordingly impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of the Investee are made available to the Company. The balance number of unsold equity shares will be sold for a price to be determined based on the fulfillment of performance criteria of the Investee as per the SPA.

• 7 Exceptional Items comprise of the following:

Exceptional Items comprise of the following:
	₹ Lakhs
Particulars	Quarter ended			Year ended
	30.06.2023	31.03.2023	30.06.2022	31.03.2023
(Gain) / Loss on disposal of investment (refer note 6 above)	-	-	-	502.24
Employee benefits expense (one-time discretionary loyalty bonus)	-	3,354.40	-	3,354.40
Total Exceptional Item- expenses	-	3,354.40	-	3,856.64

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• 8 The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:

The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:	The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:	The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:	The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:	The aggregate amount of revenue expenditure incurred on Research and Development as included in the relevant expense heads is as tabulated below:
₹ Lakhs
Particulars	Quarter ended			Year ended
	30.06.2023	31.03.2023	30.06.2022	31.03.2023
Total R&D expenditure	2,682.46	2,947.99	2,205.28	10,939.82

• 9 Subsequent to the quarter ended 30th June 2023, the Company has granted 5,00,000 stock options to the eligible employee of its subsidiary company.

• 10 The Board of Directors at its meeting held on 26th June, 2023, approved the re-appointment of Dr. Prakash A. Mody as the Chairman & Managing Director of the Company for a period of three years commencing from July 1, 2023, subject to the approval of Shareholders.

• 11 The Statement includes unaudited results for the quarter ended 31st March, 2023 being the derived figures between the audited annual figures in respect of the financial year ended 31st March, 2023 and the published unaudited figures for the nine months ended 31st December, 2022, which were subjected to a limited review.

	By Order of the Board
	For Unichem Laboratories Limited
	Dr. Prakash A. Mody Prakash Amrut Mody Digitally signed by Prakash Amrut Mody Date: 2023.07.14 14:31:35 +05'30'
Place: Mumbai	Chairman & Managing Director
Date: 14thJuly,2023	DIN:00001285

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Independent Auditor’s Review Report on Quarterly Standalone Unaudited Financial Results of Unichem Laboratories Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

To

The Board of Directors

Unichem Laboratories Limited

1. We have reviewed the accompanying statement of standalone unaudited financial results (“the Statement") of Unichem Laboratories Limited (“the Company") for the quarter ended 30[th] June, 2023, attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

Management’s responsibility

1. The Statement which is the responsibility of the Company's Management and approved by the Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India.

Auditor’s responsibility

1. Our responsibility is to issue a report on this Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statements are free of material misstatement. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus, provide less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

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Independent Auditor’s Review Report on Quarterly Standalone Unaudited Financial Results of Unichem Laboratories Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (continued…)

Basis for qualified conclusion

1. We draw attention to note 5 of the Statement regarding the EU fine matter and the Company’s balance financial exposure (net of impairment of investment of Rs. 6,909.36 lakhs) as on the last audited balance sheet date of Rs. 5,927.77 lakhs in the subsidiary (Niche Generics Limited, UK) in respect of which in our view, the Company would need to provide for impairment of balance financial exposure of Rs. 5,927.77 lakhs. However, the management is of the view that no further provision is required for the balance financial exposure of Rs. 5,927.77 lakhs, unless the outcome of EU matter is not in the favour of the subsidiary. Our conclusion is qualified in respect of this matter for the quarter ended 30[th] June, 2023 and our audit report for the previous year ended 31[st] March, 2023 was also qualified in respect of this matter.

Qualified conclusion

1. Based on our review conducted and procedures performed as stated in paragraph 3 above, except for the effects of the matter described in ‘Basis for qualified conclusion’ paragraph above, nothing has come to our attention that causes us to believe that the accompanying Statement of unaudited financial results, prepared in accordance with recognition and measurement principles laid down in the applicable Indian Accounting Standards i.e. “Ind AS” prescribed under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Emphasis of Matter paragraph

1. We draw attention to note 7 of the Statement in regard to the fair value of unquoted equity investments in Optimus Drugs Private Limited (“Optimus”) and the impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of Optimus is available with the Company. This matter was also reported under ‘Emphasis of Matter paragraph‘ in our audit report for the previous year ended 31[st] March, 2023. Our conclusion is not modified in respect of the above matter.

For N. A. Shah Associates LLP

Chartered Accountants

Firm’s Registration No.: 116560W / W100149

Digitally signed by MILAN MILAN NAVIN MODY NAVIN MODY Date: 2023.07.14 14:10:03 +05'30'

Milan Mody

Partner Membership No.: 103286 UDIN: 23103286BGPZNZ6897

Place: Mumbai Date: 14[th] July, 2023

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Independent Auditor’s Review Report on Quarterly Consolidated Unaudited Financial Results of Unichem Laboratories Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

To

The Board of Directors Unichem Laboratories Limited

1. We have reviewed the accompanying statement of consolidated unaudited financial results of Unichem Laboratories Limited (“the Holding Company”), comprising its subsidiaries (the Holding and its subsidiaries collectively referred to as “the Group”) and its share of the net loss after tax and total comprehensive income of its associate for the quarter ended 30[th ] June, 2023 (“the Statement”), being submitted by the Holding Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

Management’s responsibility

1. The Statement is the responsibility of the Holding Company's Management and has been approved by the Holding Company’s Board of Directors. The Statement has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India.

Auditor’s responsibility

1. Our responsibility is to issue a report on this Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the Listing Regulations, as amended, to the extent applicable.

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Independent Auditor’s Review Report on Quarterly Consolidated Unaudited Financial Results of Unichem Laboratories Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (continued)

1. These consolidated unaudited financial results include:

2. (a) results of the following subsidiaries:

   • 1) Niche Generics Limited, United Kingdom

   • 2) Unichem Pharmaceuticals (USA), Inc., USA

   • 3) Unichem Laboratories Limited, Ireland

   • 4) Unichem SA (Pty) Limited, South Africa

   • 5) Unichem Farmaceutica Do Brasil Ltda, Brazil

   • 6) Unichem (China) Pvt. Ltd.

3. (b) results of the associate: Synchron Research Services Pvt. Ltd.

Basis for qualified conclusion

1. We draw attention to note 5 of the Statement which sets out the current ongoing litigation regarding the EU matter that the subsidiary (Niche Generics Limited, UK) is facing. The auditors of Niche have issued a qualified conclusion for the quarter ended 30[th] June, 2023 stating that:

“We draw attention to note 18 of the financial statements [of Niche Generics Limited] which sets out the current on-going litigation the subsidiary, jointly with its Holding Company are facing. Whilst previously the outcome of the appeal was sufficiently uncertain that a contingent liability was deemed sufficient, following the hearing in October 2021, and our review of the available documentation, our conclusion is that it is more likely than not that the subsidiary jointly with its Holding Company will be liable for the Euro 13.96 million (equivalent GBP 12.00 million at the balance sheet date). Accordingly, we believe that the fine should be provided for in the financial statements. The Directors’ opinion is that there remains an inherent uncertainty as to the outcome of the appeal and therefore the directors are of the opinion that no provision should be made at this point in time. The impact on the financial statements of including the provision, assuming the fine is not shared with the Holding Company, would be that the subsidiary would show an increase in accumulated losses and in net liabilities of Euro 13.96 million.”

Our conclusion is qualified in respect of this matter for the quarter ended 30[th] June, 2023 and our audit report for the previous year ended 31[st] March, 2023 was also qualified in respect of this matter.

Qualified conclusion

1. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review reports of the other auditors referred to in paragraph 8 below, except for the effects of the matter described in ‘Basis for qualified conclusion’ paragraph above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

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Independent Auditor’s Review Report on Quarterly Consolidated Unaudited Financial Results of Unichem Laboratories Limited pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (continued)

Emphasis of Matter paragraph

1. We draw attention to note 6 of the Statement in regard to the fair value of unquoted equity investments in Optimus Drugs Private Limited (“Optimus”) and the impact of change in fair value of such investments will be considered in the subsequent period when the audited financial statements of Optimus is available with the Company. This matter was also reported under ‘Emphasis of Matter paragraph’ in our audit report for the previous year ended 31[st] March, 2023. Our conclusion is not modified in respect of the above matter.

Other matters

1. We did not review the interim financial statements of five subsidiaries, whose interim financial statements reflect total revenues (including other income) of Rs. 29,895.02 lakhs, total net profit after tax and total comprehensive income of Rs. 1,046.56 lakhs for the quarter ended 30[th ] June, 2023 as considered in the unaudited consolidated financial results. These financial results have been reviewed by other auditors whose reports have been furnished to us by the Management and our conclusion on the unaudited consolidated financial results, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of the Listing Regulations (as amended), in so far as it relates to aforesaid subsidiaries located outside India is based on the report of other auditors and the procedures performed by us as stated in paragraph 3 above.

2. We also did not review the interim financial information of subsidiary at China whose financial information reflect total net profit / (loss) after tax and total comprehensive income of Rs. (53.69) lakhs for the quarter ended 30[th ] June, 2023 as considered in the unaudited consolidated financial results. This financial information is not subject to limited review and have been furnished to us by the Management and our conclusion on the unaudited consolidated financial results, in so far as it relates to the amounts and disclosures included in respect of this subsidiary is solely based on the information provided by the Management. According to the information and explanations given to us by the Management, this financial information is not material to the Group.

3. In case of associate, the carrying value of investment had been fully impaired. Further, financial information of associate is not available for the year ended 31[st] March, 2023 and quarter ended 30[th] June, 2023. In view of the above and in our opinion and according to the information and explanations given to us by the management, this financial information is not material to the Group.

Our conclusion on the Statement is not modified in respect of the above matters.

For N. A. Shah Associates LLP

Chartered Accountants

Firm’s Registration No.: 116560W / W100149

MILAN NAVIN Digitally signed by MILAN NAVIN MODY MODY Date: 2023.07.14 14:09:09 +05'30'

Milan Mody

Partner Membership No.: 103286 UDIN: 23103286BGPZOA1800

Place: Mumbai Date: 14[th] July, 2023