2.8 Provisions, contingent liabilities and contingent assets
Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Expected future operating losses are not provided for.

If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to liability.

Where discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost.

Contingent liabilities and contingent assets

A disclosure for contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. Where there is a
possible obligation or a present obligation in respect of which the likelihood of an outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements. However, contingent assets
are assessed continually and if it is virtually certain that an inflow of economic benefits will arise,
the asset and related income are recognized in the period in which the change occurs.

Onerous contracts

A provision for onerous contracts is recognised in the statement of profit and loss when the
expected benefits to be derived by the Company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at
the present value of the lower of the expected cost of terminating the contract and the
expected net cost of continuing with the contract. Before a provision is established, the
Company recognises any impairment loss on the assets associated with that contract.

Reimbursement rights

Expected reimbursements for expenditures required to settle a provision are recognised in the
statement of profit and loss only when receipt of such reimbursements is virtually certain. Such
reimbursements are recognised as a separate asset in the balance sheet, with corresponding
credit to the specific expense for which the provision has been made.

2.9 Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services is
transferred to the customer at an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods or services.

For contracts that permit the customer to return an item, revenue is recognised to the extent that
it is highly probable that a significant reversal in the amount of cumulative revenue recognised
will not occur.

Therefore, the amount of revenue recognised is adjusted for expected returns, which are
estimated based on the historical data. In these circumstances, a refund liability and a right to
recover returned goods are recognised.

Revenue from the sale of goods is measured at the transaction price which is consideration
received or receivable, net of returns, Goods and Service Tax (GST) and applicable trade
discounts, allowances and chargeback. Revenue includes shipping and handling costs billed to
the customer.

Services Income

Revenue is measured based on the consideration specified in a contract with a customer.
Revenue is recognised at a point in time when the Company satisfies performance obligations
by transferring the promised services to its customers.

2.10 Interest Income

Interest Income mainly comprises of interest on Margin money deposit with banks relating to
bank guarantee and term deposits.

Interest income or expense is recognised using the effective interest method (EIR).

Interest is recognized using the time-proportion method, based on rates implicit in the transactions.

2.11 Tax Expenses

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in
Other comprehensive income.

The Company has determined that interest and penalties related to income taxes, including
uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for
them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting date. Current income tax
relating to items recognised outside the statement of profit and loss is recognised outside the
statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction).
Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions, where
appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.

Deferred tax liabilities and assets are recognized for all taxable temporary differences and
deductible temporary differences.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be
available against the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax assets to be utilised.

Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable profits will allow the deferred tax assets
to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the statement of profit and loss is recognised
outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying
transaction).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as
current tax for the year. The deferred tax asset is recognised for MAT credit available only to the
extent that it is probable that the Company will pay normal income tax during the specified year,
i.e., the year for which MAT credit is allowed to be carried forward. In the year in which the
Company recognizes MAT credit as an asset, it is created by way of credit to the statement of
profit and loss and shown as part of deferred tax asset. The Company reviews the “MAT credit
entitlement” asset at each reporting date and writes down the asset to the extent that it is no
longer probable that it will pay normal tax during the specified period.

Goods and Service Tax (GST) paid on acquisition of assets or on incurring expenses
When the tax incurred on purchase of assets or services is not recoverable from the taxation
authority, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the
expense item, as applicable. Otherwise, expenses and assets are recognized net of the amount
of taxes paid. The net amount of tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheet.

2.12 Earnings Per Share
Basic earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable
to equity shareholders (after deducting preference dividends and attributable taxes) by the
weighted average number of equity shares outstanding during the year.

The weighted average number of equity shares outstanding during the year is adjusted for events
such as bonus issue, bonus element in a rights issue, share split, and reverse share split
(consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of
basic earnings per share) after considering the effect of interest and other financing costs or
income (net of attributable taxes) associated with dilutive potential equity shares by the weighted
average number of equity shares considered for deriving basic earnings per share adjusted for
the weighted average number of equity shares that would have been issued upon conversion of
all dilutive potential equity shares.

2.13 Segment reporting

The Company is engaged in the " manufacture of Drug Intermediates & Bulk Dugs " and the
same constitutes a single reportable business segment as per Ind AS 108.And hence segment
reporting specified as per IND AS 108 is not applicable.

2.14 Share capital

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction
from equity. Income tax relating to transaction costs of an equity transaction is accounted for in
accordance with Ind AS 12.

2.15 Determination of fair values

The Company's accounting policies and disclosures require the determination of fair value, for
certain financial and non-financial assets and liabilities. Fair values have been determined for

measurement and/or disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability. A fair value measurement of a non-financial asset takes
into account a market participants ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its
highest and best use.

Property, plant and equipment

Property, plant and equipment, if acquired in a business combination or through an exchange of
non-monetary assets, is measured at fair value on the acquisition date. For this purpose, fair
value is based on appraised market values and replacement cost.

Inventories

The fair value of inventories acquired in a business combination is determined based on its
estimated selling price in the ordinary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort required to complete and sell the
inventories.

Investments in equity and debt securities and units of mutual funds

The fair value of marketable equity and debt securities is determined by reference to their quoted
market price at the reporting date. For debt securities where quoted market prices are not
available, fair value is determined using pricing techniques such as discounted cash flow
analysis. In respect of investments in mutual funds, the fair values represent net asset value as
stated by the issuers of these mutual fund units in the published statements. Net asset values
represent the price at which the issuer will issue further units in the mutual fund and the price at
which issuers will redeem such units from the investors. Accordingly, such net asset values are
analogous to fair market value with respect to these investments, as transactions of these mutual
funds are carried out at such prices between investors and the issuers of these units of mutual
funds.

2.16 New standards adopted by the company

Ind AS 1 - Presentation of financial information

The amendments require companies to disclose their material accounting policies rather than
their significant accounting policies. Accounting policy information, together with other
information, is material when it can reasonably be expected to influence decisions of primary
users of general purpose financial statements. The Company does not expect this amendment to
have any significant impact in its financial statement.

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases
and decommissioning obligations. The amendments narrowed the scope of the recognition
exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer
applies to transactions that, on initial recognition, give rise to equal taxable and deductible
temporary differences. The Company does not expect this amendment to have any significant
impact in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting
estimates. The definition of a change in accounting estimates has been replaced with a definition
of accounting estimates. Under the new definition, accounting estimates are “monetary amounts
in financial statements that are subject to measurement uncertainty”. Entities develop accounting
estimates if accounting policies require items in Restated financial information to be measured in
a way that involves measurement uncertainty. The company does not expect this amendment to
have any significant impact in its financial statements.

2.17 New Accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
For the year ended March 31,2025, MCA has not notified any new standards or amendments to
the existing standards applicable to the Company.