2.12 Provisions, contingent liabilities and contingent assets
Provisions are recognized when there is 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 there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of
the expenditure required to settle the present obligation at the Balance sheet date. The expense relating to a
provision is presented in the statement of profit and loss net of any reimbursement.
In an event when the time value of money is material, the provision is carried at the present value of the cash
flows estimated to settle the obligation.
Contingent liability is a possible obligation that arises from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company, or is a present obligation that arises from past event but is not recognized because
either it is not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, or a reliable estimate of the amount of the obligation cannot be made. Contingent liabilities are
disclosed and not recognized.
Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain,
related asset is recognized.
_Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date._
2.13 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Initial recognition and measurement:
Financial assets are recognised at fair value or transaction price at initial recognition, and subsequently
measured at amortised cost, fair value through other comprehensive income (OCI) or fair value through profit
or loss. The classification of financial assets at initial recognition depends on the financial asset's contractual
cash flow characteristics and the Company's business model for managing them.
All financial assets are recognised initially at fair value plus, (in the case of financial assets not recorded at fair
value through consolidated statement of profit or loss) transaction costs that are attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are
expensed off in the statement of profit & loss. Trade receivable that does not contain a significant financing
component are measured at transaction price.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs
to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial
assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss,
irrespective of the business model.
The Company's business model for managing financial assets refers to how it manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at
amortised cost are held within a business model with the objective to hold financial assets in order to collect
contractual cash flows while financial assets classified and measured at fair value through OCI are held within a
business model with the objective of both holding to collect contractual cash flows and selling.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the company commits to purchase or sell the asset.
Subsequent measurement:
Debt instruments
Subsequent measurement of debt instruments depends on the Company's business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which the
Company classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets
is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition
and impairment losses (if any) are recognised directly in profit or loss. The Company's financial assets
subsequently measured at amortised cost includes trade receivables, loans and certain other financial assets etc.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely
payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken
through OCI except for the recognition of impairment gains or losses, interest income and foreign exchange
gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured
at fair value through profit or loss is recognised in profit or loss.
Derecognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company's summary statements of assets and liabilities) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Financial liabilities and equity
An instruments issued by a Company are classified as either financial liabilities or as equity in accordance with
the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of
direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or
loss is recognised in Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Company's
own equity instruments. Dividend paid on equity instruments are directly reduced from equity.
Financial liabilities
Initial recognition and measurement:
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss
and at amortised cost, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of payables, net of directly attributable
transaction costs.
Subsequent measurement:
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or
loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at
fair value through profit or loss. Gains or losses on liabilities held for trading are recognised in the Statement of
Profit and Loss.
Financial liabilities at amortised cost: Financial liabilities are subsequently carried at amortised cost using
the effective interest method. For trade and other payables maturing within one year from the Balance Sheet
date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of Profit and Loss as finance costs.
Offsetting financial instruments:
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the assets and settle liabilities simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
2.14 Investments in the nature of equity in subsidiaries
The Company has elected to recognise its investments in equity instruments in subsidiaries at cost in the
separate financial statements in accordance with the option available in Ind AS 27, 'Separate Financial
Statements'. The Company regardless of the nature of its involvement with an entity (the investee), determines
whether it is a parent by assessing whether it controls the investee. The Company controls an investee when it
is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
Thus, the Company controls an investee if and only if it has all the following:
(a) power over the investee;
(b) exposure, or rights, to variable returns from its involvement with the investee and
(c) the ability to use its power over the investee to affect the amount of the returns.
2.15 Cash and cash equivalents and Cash flow statement
Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand, short-term deposits
having a original maturity of three months or less, which are subject to an insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby net profits before tax are adjusted for the effects of
the transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from regular revenue generating, investing and financing activities of the Company are
segregated.
2.16 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.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.
2.17 Significant accounting judgments, estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and
the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
years.
2.18 Judgements
In the process of applying the accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognised in the financial statements:
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the financial year, are described below:
a. The Company based its assumptions and estimates on parameters available when the financial statement
were prepared.
b. Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.
Contingent liabilities
The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are disclosed
when there is a possible obligation arising from past events, the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that arises from past events where it is either not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques and
inputs to be used. The inputs to these models are taken from observable markets where possible, but where
this is not feasible, a degree of judgement is required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial instruments.
Impairment of Investment in subsidiaries
The Company asses the carrying amounts of investment in subsidiaries and joint venture to determine whether
there is any indication that those investments have suffered an impairment loss. Where the carrying amount of
investments exceeds its recoverable amount, the investment is considered impaired and is written down to its
recoverable amount. An impairment loss (if any) is recognised in statement of profit and loss.
Deferred tax recognition
Deferred tax asset (DTA) is recognized only when and to the extent there is convincing evidence that the
Company will have sufficient taxable profits in future against which such assets can be utilized. Significant
management judgment is required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future taxable profits together with future tax planning strategies,
recent business performance and developments
2.19 Recent accounting pronouncements
The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standard) Amendment Rules as issued from time to time. For the year ended
March 31, 2024, MCA has not notified any new standards or amendments relating to existing standards
applicable to the Company.
Note No. 34
Employee benefits
(a) Salaries and Wages
Compensatory absence which accrue to the employees which are expected to be availed or encashed within twelve months
after the end of the period in which the employees render the related service are short-term in nature. These
compensatory absences require measurement on an actual basis and not on actuarial basis.
As per the leave policy of the company, the compensatory absences are paid within the next month from the date they are
due and there is no accrual benefit that needs to be accounted as per Ind AS 19. They are processed along with monthly
payroll.
(b) Defined contribution plan
The Company makes provident and pension fund contributions, which is a defined contribution plan, for qualifying
employees. Additionally, the Company also provides, for covered employees, health insurance through the Employee State
Insurance scheme. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs
to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the
Schemes. Expenses recognized against defined contribution plans:
(c) The Indian Parliament has approved the Code on Social Security 2020, which would impact Employees Provident Fund
and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972, etc. The effective date from which the
changes are applicable is yet to be notified and the final rules are yet to be framed. The impact of the changes, will be
assessed and recognized post notification of the relevant provision and related rules are published.
Note No. 35
Segment reporting
The Company is primarily engaged in the business of Selling, Marketing and distribution of pharmaceutical drugs, which in
the terms of Ind AS 108 on 'Operating Segments', constitutes a single reporting business segment.
There are no material individual markets outside India and hence the same is not disclosed for geographical segments for
the segment revenues or results or assets. During the year ended 31 March 2025 and 31 March 2024 the revenue from
transactions with a single external customer did not amount to 10 percent or more of the Company's revenues from the
external customers.
Company is being driven by the market forces, its businesses are subject to several risks and
uncertainties including financial risks. The Company's documented risk management policies act as an
effective tool in mitigating the various financial risks to which the business is exposed to, in the course of
their daily operations.
The risk management policies cover areas around all identified business risks including commodity price
risk, foreign exchange risk etc., Risks are identified through a formal risk management programme with
active involvement of senior management personnel and business managers. The Company has in place
risk management processes in line with the Company's policy. Each significant risk has an owner, who
coordinates the risk management process.
The risk management framework aims to:
• Better understand our risk profile;
• Understand and better manage the uncertainties which impact our performance;
• Contribute to safeguarding Company value and interest of various stakeholders;
• Ensure that sound business opportunities are identified and pursued without exposing the business to
an unacceptable level of risk;
• Improve compliance with good corporate governance guidelines and practices as well as laws &
regulations; and
• Improve financial returns
Treasury management
The Company's treasury function provides services to the business, co-ordinates access to domestic and
international financial markets, monitors and manages the financial risks relating to the operations of the
Company through internal risk reports which analyse exposures by degree and magnitude of risks.
These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit
risk, liquidity risk and cash flow interest rate risk.
Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The
treasury operates as per the delegation of authority from the Board. Day-to-day treasury operations are
managed by Company's finance team. Long-term fund raising including strategic treasury initiatives are
handled by a Treasury team. The Company has a strong system of internal control which enables
effective monitoring of adherence to Company's policies.
Financial risk
The Company's Board approved financial risk policies comprise liquidity, currency, interest rate and
counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage
risk and optimize interest through proven financial instruments.
(i) Liquidity
The Company requires funds both for short-term operational needs as well as for long-term investment
programmes mainly in growth projects. The company is confident of generating sufficient cash flows
from the operations which together with the available cash and cash equivalents and short-term
investments provide liquidity both in the short-term as well as in the long-term.
The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and
strengthening balance sheet. The maturity profile of the Company's financial liabilities based on the
remaining period from the date of balance sheet to the contractual maturity date is given in the table
below. The figures reflect the contractual undiscounted cash obligation of the Company.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will
fluctuate because of changes in foreign exchange rates. The Company, at present does not have
any exposure to the risk of changes in foreign exchange rates. The risks might primarily relate
to fluctuations in US Dollar, GBP against the functional currencies of the Company. The
Company's exposure to foreign currency changes for other currencies is not material, at present. The
Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to
exchange rate risks.
(iii) Credit risk
Credit risk is the risk that the counter party will not meet its obligation under a financial instrument,
leading to a financial loss. The Company is exposed to credit risk from its operating activities and from
its financing activities, including deposits with banks, foreign exchange transactions and other financial
instruments. The carrying amount of trade receivables, advances, deposits, cash and bank
balances, bank deposits and interest receivable on deposits represents company's maximum
exposure to the credit risk.
Credit risk from balances with banks is managed by the Company's treasury department in accordance
with Company's policy. No other financial asset carry a significant exposure with respect to the
credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are
with reputable government, public bodies and others. Since the company did not commence its
commercial production, as on reporting date, credit risk from receivable perspective is insignificant.
(b) Capital management and Gearing Ratio
For the purpose of the Company's capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders. The primary objective of the
company's capital management is to maximise the shareholder value. The Company manages its capital
structure and makes adjustments in light of changes in economic conditions and the requirements of the
financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total
capital. The Company includes within debt, interest bearing loans and borrowings.
The fair value of the financial assets and liabilities is included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale. The following methods and assumptions were used to estimate the fair values:
(i) The Company has disclosed financial instruments such as borrowings, trade payable, and other current
liabilities, loans, trade receivable, cash and cash equivalents and bank balances other than cash and
cash equivalents at carrying value because their carrying values are a reasonable approximation of the
fair values due to their short term nature.
(ii) Financial instruments with fixed and variable interest rates are evaluated by the Company based on
parameters such as interest rates and individual credit worthiness of the counter party.
Note No. 42
(a) Title deeds of immovable properties
Title Deeds of immovable properties are held in the name of the Company.
(b) Valuation of Property Plant & Equipment, intangible asset
The Company has not revalued its fixed assets.
(c) Loans or advances to specified persons
No loans or advances in the nature of loans are granted to promoters, directors, KMPS and the related parties (as
defined under Companies Act, 2013,) either severally or jointly with any other person, that are repayable on demand
or without specifying any terms or period of repayment other than for business purposes
(d) Details of benami property held
The Company do not have any Benami property, where any proceeding has been initiated or pending
against the Company
(e) Borrowing secured against current assets
The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or
statements of current assets filed by the Company with banks are in agreement with the books of accounts.
(f) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
(g) Relationship with struck off companies
The Company do not have any transactions with companies struck off.
(h) Registration of charges or satisfaction with Registrar of Companies (ROC)
The Company has no charges pending for registration or satisfaction with the Registrar of Companies beyond the
statutory period, except for a charge relating to a vehicle loan availed from Union Bank of India, which remains
pending for registration due to technical reasons.
(i) Compliance with number of layers of companies
The Section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017
is not applicable to the company.
(j) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.
(k) Utilisation of borrowed funds and share premium
The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (intermediaries) with the understanding that the intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (Ultimate Beneficiaries);
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or;
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(l) Undisclosed income
The Company have not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961.
(m) Details of crypto currency or virtual currency
The Company have not traded or invested in Crypto currency or Virtual Currency.
(n) Utilisation of borrowings availed from banks and financial institutions
The borrowings obtained by the Company from the Banks and Financial Institutions have been applied for the
purposes for which such loans were taken.
As per our audit report of even date For and on behalf of the board
For P Suryanarayana & Co.,
Chartered Accountants
Bhanu Prakash Vankineni Phani Anupama Vankineni
Director Director
P. Suryanarayana DIN:00919910 DIN: 00935032
Partner
Membership No. 201195
F. No. 009288S
Place: Hyderabad Vankineni Kiran Kumar Ankit Singhal
Date: 30th May, 2025 Chief Financial Officer Company Secretary
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