Accounting Policies of Brawn Biotech Ltd. Company

Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIES
Corporate Information

Brawn Biotech Limited is a public limited company incorporated in India. Its shares are listed on Bombay
Stock Exchange. The Registered office of the company is located at C-64 Lajpat Nagar-I, New Delhi-110024.
Its Pharmaceutical Products cover all major product segments like Antibacterials, Cardiovasculars,
Antidiabetics, Analgesics, Gastrointestinals, Antifungals, Skin Care, Antipsychotics, Antiasthmatics,
Antacids, Antimalarials, and Nutritionals. BRAWN, with its inception barely 40 years back, incorporated in
1985 has today evolved into a fully integrated, healthcare group, marking its presence in India.

Note:1- Significant Accounting Policies:

A. The following note provides list of the significant accounting policies adopted in the preparation of
these financial statements. These policies have been consistently applied to all the years presented
unless otherwise stated.

I. Basis of Preparation:

A. The Financial Statements have been prepared in all material aspects in accordance with Indian
Accounting Standards [Ind AS] notified under the companies [Indian Accounting Standards] Rules, 2015,
notified under Section 133 of Companies Act, 2013, (''the Act'') and other relevant Provisions of the Act.

B. The financial statements have been prepared on historical cost basis, except for the assets and
liabilities which have been measured at fair value or revalued amount.

C. Current versus non-current classification:

The assets and liabilities in the balance sheet are presented based on current/non-current classification.
An asset is current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle, or

- Held primarily for the purpose of trading, or

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when it is:

- Expected to be settled in normal operating cycle, or

- Held primarily for the purpose of trading, or

- Due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

All other liabilities are treated as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities respectively.

II. Use of Estimates:

The preparation of the financial statements in conformity with Ind AS requires management to make
estimates, judgments and assumptions. These estimates, judgments and assumptions affect the
application of accounting policies and the reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial statements and reported amounts of income
and expenses during the period. Application of accounting policies that require critical accounting
estimates involving complex and subjective judgments are provided below. Accounting estimates could
change from period to period. Actual results could differ from those estimates. Appropriate changes in
estimates are made as management becomes aware of changes in circumstances surrounding the
estimates. Changes in estimates are reflected in the financial statements in the period in which changes
are made and, if material, their effects are disclosed in the notes to the financial statements.

Critical estimates and judgments

a) Income Taxes:

Significant judgments are involved in determining the provision for income taxes, including amount
expected to be paid/recovered for uncertain tax positions.

b) Property, Plant and Equipment:

Property, Plant and Equipment represent a significant proportion of the asset base of the company. The charge
in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful
life and the expected residual value at the end of its life. Management reviews the residual values, useful
lives and method of depreciation of Property, Plant and Equipment at each reporting period end and any
revision to these is recognized prospectively in current and future periods. The lives are based on historical
experience with similar assets as well as anticipation of future events, which may impact their life, such as
changes in technology

c) Employees benefits:

Significant judgments are involved in making judgments about the life expectancy, discounting rate, salary
increase etc. which significantly affect the working of the present value of future liabilities on account of
employees benefits by way of defined benefit plans.

III. Foreign Currency Transactions:

The Company''s financial statements are presented in Indian Rupees [INR], which is the functional and
presentation currency.

A. The transactions in foreign currencies are translated into functional currency at the rates of exchange
prevailing on the dates of transactions.

B. Foreign Exchange gains and losses resulting from settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at the yearend exchange
rates are recognized in the statement of Profit and Loss.

IV. Revenue Recognition:

A. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured, regardless of when the payment is being made, Revenue is
measured at the fair value of the consideration received or receivable, taking into account contractually
defined terms of payment and excluding taxes or duties collected on behalf of the government and is
shown net of returns, trade allowances, rebates, value added taxes and volume discounts.

(I) Sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer.

(ii) Commission/Fee/Discount Income

Commission/Fee/Discount Income is accounted as and when accrued and realizable upon raising of bills.

V. Taxes on Income:

Tax expenses comprise of current and deferred tax.

A. Current Tax: 4

a) Current tax is measured at the amount expected to be paid on the basis of reliefs and deductions
available in accordance with the provision of the Income Tax Act, 1961. The Tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting date.

b) Current tax items are recognized in co-relation to the underlying transaction either in Statement of
Profit and Loss, OCI or directly in equity.

B. Deferred Tax:

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

b) Deferred tax liabilities are recognized for all taxable temporary differences.

c) Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused
tax loses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, the carry forward of unused tax credits and
unused tax losses can be utilized.

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

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

e) Deferred tax assets and liabilities are measured at the tax rates [and tax laws] that have been enacted
or substantively enacted at the reporting date and are expected to apply in the year when the asset is
realized or the liability is settled.

f) Deferred tax items are recognized in co-relation to the underlying transaction either in OCI or directly in
equity.

g) 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.

h) DTA on Business Losses is recognized only when there is convincing other evidence that sufficient
taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by
the entity.

Vl.Property, Plant and Equipment:

A. Property, Plant and Equipment are stated at historical cost of acquisition/construction less
accumulated depreciation and impairment loss. Historical cost [Net of Input tax credit
received/receivable] includes related expenditure and pre-operative & project expenses for the
period up to completion of construction/assets are ready for its intended use, if the recognition
criteria are met and the present value of the expected cost for the decommissioning of an assets
after its use is included in the cost of the respective asset, if the recognition criteria for a provision
are met. The foreign exchange loss or gain attributable to Property, Plant and Equipment is
adjusted to the cost of respective Property, plant and Equipment. Subsequent costs are included
in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits Related with the item will flow to the company and the
cost of the item can be measured reliably.

The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
All other repairs and maintenance costs are charged to the statement of profit and loss during the
reporting period in which they are incurred, unless they meet the recognition criteria for capitalization
under Property, Plant and Equipment.

On transition to Ind AS, the company has elected to continue with the carrying value of all its Property,
Plant and Equipment recognized as at April 1, 2016 measured as per the previous GAAP and use that
carrying value as the deemed cost of the Property, Plant and Equipment

B. Depreciation on tangible assets is provided on "straight line method" based on the useful lives as
prescribed under Schedule II of the Companies Act, 2013. The management believes that these
estimated useful lives are realistic and reflect fair approximation of the period over which the
assets are likely to be used. However, management reviews the residual values, useful lives and
methods of depreciation of Property, Plant and Equipment at each reporting period end any
revision to these is recognized prospectively in current and future periods.

C. Depreciation on additions/disposal of the fixed assets during the year is provided on pro-rata basis
according to the period during which assets are used.

D. An item of Property, Plant and Equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference
between the net disposal proceeds and the carrying amount of the asset] is included in the
Statement of profit and loss when the asset is recognized.

VII. Borrowing Costs:

A. Borrowing costs consist of interest and other borrowing costs that are incurred in connection with
the borrowing of funds. Other borrowing costs include ancillary charges at the time of acquisition
of a financial liability, which is recognized as per EIR method. Borrowing costs also include
exchange differences to the extent regarded as an adjustment to the borrowing costs.

B. Borrowing costs that are directly attributable to the acquisition/construction of a qualifying asset
are capitalized as part of the cost of such assets, up to the date the assets are ready for their
intended use.

VII. Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of Cash Flow Statement comprise cash and cheque in hand,
bank balances, demand deposits with banks where the original maturity is three months or less and other
short term highly liquid investments.

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Mar 31, 2015

(A) GENERAL

The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognizing income and expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in concurrence with generally accepted accounting principles.

(B) VALUATION OF INVENTORIES

Inventories are valued at cost or market price whichever is lower.

(C) FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided on straight-line method at the rates and in the manner provided in schedule XIV to the Companies Act, 1956.

(D) INVESTMENTS

Investments are stated at cost of acquisition.

(E) REVENUE RECOGNITION

(l)sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer.

(ii)Commission/Fee/Discount Income

Commission / Fee/ Discount Income is accounted as and when accrued and realizable upon raising of

bills.

(F) FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of such transactions. Realized gains or losses on foreign exchange transactions are recognized in the Profit and Loss account at the time of actual realization of gains/losses.

(G) CONTINGENT LIABILITIES

Liabilities below Rs. 1,00,000/- if any are not recognized as contingent liability.

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Mar 31, 2014

(A) GENERAL

The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognizing income and expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in concurrence with generally accepted accounting principal

(B) VALUATION OF INVENTORIES

Inventories are valued at cost or market price whichever is lower.

(C) FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided on straight-line method at the rates and in the manner provided in schedule XIV to the Companies Act, 1956.

(D) INVESTMENTS

Investments are stated at cost of acquisition.

(E) REVENUE RECOGNITION

(i) Sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer.

(ii) Commission/Fee/Discount Income

Commission / Fee/ Discount Income is accounted as and when accrued and realizable upon raising of bills.

(F) FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of such transactions. Realized gains or losses on foreign exchange transactions are recognized in the Profit and Loss account at the time of actual realization of gains/losses.

(G) CONTINGENT LIABILITIES

Liabilities below Rs. 1,00,000/- if any are not recognized as contingent liability.

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Mar 31, 2013

(A) GENERAL

The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognizing income and expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in concurrence with generally accepted accounting principal

(B) VALUATION OF INVENTORIES

Inventories are valued at cost or market price whichever is lower.

(C) FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided on straight-line method at the rates and in the manner provided in schedule XIV to the Companies Act, 1956.

(D) INVESTMENTS

Investments are stated at cost of acquisition.

(E) REVENUE RECOGNITION

(i) Sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer.

(ii) Commission/Fee/Discount Income

Commission / Fee/ Discount Income is accounted as and when accrued and realizable upon raising of bills.

(F) FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of such transactions. ''Realized gains or losses on foreign exchange transactions are recognized in the Profit and Loss account at the time of actual realization of gains/losses.

(G) CONTINGENT LIABILITIES

Liabilities below Rs. 1,00,000/- if any are not recognized as contingent liability.

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Mar 31, 2011

(A) GENERAL

The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognizing income and expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in concurrence with generally accepted accounting principles.

(B) VALUATION OF INVENTORIES

Inventories are valued at cost or market price whichever is lower.

(C) FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided on straight-line method at the rates and in the manner provided in schedule XIV to the Companies Act, 1956.

(D) INVESTMENTS

Investments are stated at cost of acquisition.

(E) REVENUE RECOGNITION

(i) Sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer.

(ii) Commission/Fee/Discount Income

Commission / Fee/ Discount Income is accounted as and when accrued and realizable upon raising of bills.

(F) FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of such transactions. Realized gains or losses on foreign exchange transactions are recognized in the Profit and Loss account at the time of actual realization of gains/losses.

(G) CONTINGENT LIABILITIES

Liabilities below Rs. 1,00,000/- if any are not recognized as contingent liability.

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Mar 31, 2010

(A) GENERAL

The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognizing income and expenditure on accrual basis. Accounting policies not specifically referred to otherwise are consistent and in concurrence with generally accepted accounting principles.

(B) VALUATION OF INVENTORIES

Inventories are valued at cost or market price whichever is lower.

(C) FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost less accumulated depreciation. Depreciation on fixed assets is provided on straight-line method at the rates and in the manner provided in schedule XIV to the Companies Act, 1956.

(D) INVESTMENTS

Investments are stated at cost of acquisition.

(E) REVENUE RECOGNITION (i) Sales

Sales are recognized when effectively the risk and rewards of ownership has passed to the buyer. (ii) Commission/Fee/Discount Income

Commission / Fee/ Discount Income is accounted as and when accrued and realizable upon raising of bills.

(F) FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of such transactions. Realized gains or losses on foreign exchange transactions are recognized in the Profit and Loss account at the time of actual realization of gains/losses.

(G) CONTINGENT LIABILITIES

Liabilities below Rs. 1,00,000/- if any are not recognized as contingent liability.