Notes to Accounts of Vista Pharmaceuticals Ltd.

Mar 31, 2024

1.7 Provisions

A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (other than employee benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

1.8 Revenue Recognition

Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met as described below.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of indirect taxes, trade allowances, rebates and amounts collected on behalf of third parties and is not recognised in instances where there is uncertainty with regard to ultimate collection. In such cases revenue is recognised on reasonable certainty of collection.

Interest Income

Interest income from a financial asset is recognised using effective interest rate method. However, in respect of certain financial assets where it is not probable that the economic benefits associated with the transaction will flow to the entity and amount of revenue cannot be measured reliably, in such cases interest income is not recognised.

1.9 Dividend Income

Dividends will be recognised when the company’s right to receive has been established.

1.10 Employee benefits

1.10.1 Short term employee benefits

The undiscounted amount of short-term employee benefits is expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

1.10.2 Defined benefit plans

a) Gratuity

In accordance with the Payment of Gratuity Act, 1972, Company provides for gratuity, a defined retirement plan (the “Gratuity Plan”) covering the eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee salary and the tenure of employment. Liability with regard to the Gratuity Plan are determined by actuarial valuation as per the requirements of IndAS 19 as of the balance sheet date, based upon which, the Company contributes the ascertained liabilities to Insurer.

b) Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Regional Provident Fund Commissioner equal to a specified percentage of the covered employee’s salary.

c) Employee State Insurance Fund

Eligible employees are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate of employee’s gross salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to the fund administered and managed by the Government of India, contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

d) Leave encashment

All the employees who have completed their eligible service in the Company are eligible for leave encashment as per policy of the Company and the same is paid to the eligible employee at retirement, death, incapacitation or termination of employment. This amount, as calculated for all the eligible employees, is charged to the Statement of Profit and Loss.

1.11 Tax Expenses

The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are off set only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

Minimum alternate tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as "MAT Credit Entitlement.” The Company reviews the "MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

1.12 Leases

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

As per Ind AS 116, Variable lease payments that do not depend on an index or rate and are not in substance or fixed, such as those based on performance (i.e. percentage of sales) are not included as lease payments and these payments are recognized in the statement of profit or loss in the period in which the event that triggers the payment occurrence.

Hence, the company did not recognize any ROU as the lease agreement does not contain fixed Minimum Lease payments.

1.13 Borrowing costs

Borrowing costs incurred for obtaining assets which takes substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. Other borrowing costs are treated as expense for the year.

Transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans using effective interest method.

1.14 Earnings per equity share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owner of the company.

• By the weighted number of equity shares outstanding during the financial year

(ii) Diluted earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

1.15 Financial Instruments

i. Financial assets

A. Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.

a) Financial assets carried at amortized cost (AC)

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial assets at fair value through profit or loss (FVTPL)

A Financial asset which is not classified as AC or FVOCI aremeasured at FVTPL e.g. investments in mutual funds. 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 and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in which it arises.

c) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose Objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

B. Investments in subsidiaries

The Company has accounted for its investments in subsidiaries at cost and not adjusted to fair value at the end of each reporting period. Cost represents amount paid for acquisition of the said investments.

ii. Financial Liabilities

A. Initial recognition and Measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss (“FVTPL”), loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade andother payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

B. Subsequent measurement

Financial liabilities are carried at amortized 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.

1.16 New standards and interpretations not yet Adopted

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

2.28 Segment Reporting

The Company concluded that there is only one operating segment i.e, the Manufacturing of Pharmaceutical products. Hence, the same becomes the reportable segment for the Company. Accordingly, the Company has only one operating and reportable segment, the disclosure requirements specified in paragraphs 22 to 30 are not applicable. Accordingly, the Company shall present entity-wide disclosures enumerated in paragraphs 32, 33 and 34 of Ind AS 108.

2.29 Employee benefits

Gratuity benefits

In accordance with applicable laws, the Company has a defined benefit plan that provides for gratuity payments (the “Gratuity Plan”) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of employment with the Company. Liabilities in respect of the Gratuity Plan.

The Company has covered its gratuity liability according to the IND AS. The benefits are determined and carried out at each Balance Sheet date.On remeasurement of the defined benefit plan gratuity the other comprehensive gain has recognized 0.062 Lakh rupees and the gratuity provision has recognized in the balance sheet 9.15 Lakh rupees.

Contribution to Provident Fund

The employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government-administered fund equal to 12% of the covered employee’s qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed Rs. 4.90 lakhs to the provident fund plan during the year ended 31st March 2024.

2.33 Fair Value Measurements:

i) Fair Value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant input to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in and active market is determined using valuation techniques which maximize the use of observable market date rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

ii) Financial assets and liabilities measured at fair values:

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payable. The main purpose of these financial liabilities is to finance the Company’s operations.

The Company’s principal financial assets include loans. Trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTPL investments and investments in its associates.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversee the management of these risks. The company’s Board of Directors is supported by the senior management that advises on financial risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance to the Company’s board of directors that the company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Carrying amounts reported in the statement of financial position for cash and cash equivalents, trade and other receivables. Trade and other payables and other liabilities approximate their respective fair values due to their short maturity.

2.34 Contingent Liabilities and Commitments:

The following are the details of contingent liabilities and commitments:

2.35 Balance Confirmations:

Confirmations of receivables and payable balances have not been received by the Company, hence, reliance is placed on the balances as per books. In the opinion of the management, the amounts are realizable /payable in the ordinary course of business.

2.36 Financial Risk Management

In course of its business, the company is exposed to certain financial risk such as market risk (Including currency risk and other price risks), credit risk and liquidity risk that could have significant influence on the company’s business and operational/financial performance. The Board of directors reviews and approves risk management framework and policies for managing these risks and monitor suitable mitigating actions taken by the management to minimize potential adverse effects and achieve greater predictability to earnings.

2.37 Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, a means of mitigating the risk of financial loss from defaults. The company makes an allowance for doubtful debts/advances using the expected credit loss model.

2.38 Liquidity risk

Liquidity risk refers to the risk that the company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as pre-requirements. The Company’s exposure to liquidity risk is minimal.

2.39 Market Risk

Market risk is the risk that changes in market prices, such as foreign exchanges rates, interest rate And equity prices, which will affect the company’s income of the value of its holdings of financial Instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

a) Interest Rate Risk

Interest risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate Because of changes in market interest rates. The company has exposure only to financial instruments at fixed interest rates. Hence, the company is not exposed to significant interest rate Risk.

b) Price Risk

The company’s exposure to equity securities price risk arises from

investments held by the company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. The majority of the company’s equity instruments are publicly traded.

2.40 Capital Management Risk

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for stake holders. The company also proposes to maintain an optimal capital structure to reduce the cost of capital. Hence, the company may adjust any dividend payments, return capital to shareholders or issue new shares. Total capital is the equity as shown in the statement of financial position. Currently, the company primarily monitors its capital structure on the basis of gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the company.

2.41 Standards Issued But Not Effective

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

As at the date of issue of financial statements, there are no new standards or amendments which have been notified by the MCA but not yet adopted by the Company. Hence, the disclosure is not applicable.

2.43 Other Statutory Information:

i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

ii. The Company does not have any transactions with companies struck off.

iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

v. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

vi. The Company has 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) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

vii. The Company has 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 Group 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.

viii. The Company has not any such transaction which is not recorded in the books of account 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).

2.44 Previous year’s figures have been regrouped/reclassified wherever necessary, to conform to the current period’s classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013 effective 1st April 2021.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

2.46The closing balances of trade receivables, trade payables, and loans and advances are subject to confirmation from the respective parties, and the auditors rely on the information provided by management.

The accompanying Significant accounting policies and notes form an integral part of the Standalone financial statements.

As per our report of even date For and on behalf

of Board

For A M Reddy & D R Reddy Chartered Accountants FRNo:009068S

Sd/- Sd/-

Dr. Dhananjaya Alii Mr. Murali Meraga

Whole Time Director Managing Director

(DIN:08574891) (DIN:00610909)

Sd/- Sd/- Sd/-

D Ramakrishna Reddy Barkah Jain Mr. Suneel

Partner Company Secretary Pachipala

M.No.209211 Chief Financial

UDIN: 24209211BKHHRX9445 Officer

Place: Hyderabad Date: 28/05/2024

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Mar 31, 2023

1.7. Provisions

A provision is recognized when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (other than employee benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

1.8. Revenue Recognition

Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met as described below.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of indirect taxes, trade allowances, rebates and amounts collected on behalf of third parties and is not recognised in instances where there is uncertainty with regard to ultimate collection. In such cases revenue is recognised on reasonable certainty of collection.

Interest Income

Interest income from a financial asset is recognised using effective interest rate method. However, in respect of certain financial assets where it is not probable that the economic benefits associated with the transaction will flow to the entity and amount of revenue cannot be measured reliably, in such cases interest income is not recognised.

1.9. Dividend Income

Dividends will be recognised when the company’s right to receive has been established.

1.10. Employee benefits

1.10.1 Short term employee benefits

The undiscounted amount of short-term employee benefits is expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

1.10.2 Defined benefit plans

a) Gratuity

In accordance with the Payment of Gratuity Act, 1972, Company provides for gratuity, a defined retirement plan (the “Gratuity Plan”) covering the eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee salary and the tenure of employment. Liability with regard to the Gratuity Plan are determined by actuarial valuation as per the requirements of IndAS 19 as of the balance sheet date, based upon which, the Company contributes the ascertained liabilities to Insurer.

b) Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Regional Provident Fund Commissioner equal to a specified percentage of the covered employee’s salary.

c) Employee State Insurance Fund

Eligible employees are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate of employee’s gross salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to the fund administered and managed by the Government of India. contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

d) Leave encashment

All the employees who have completed their eligible service in the Company are eligible for leave encashment as per policy of the Company and the same is paid to the eligible employee at retirement, death, incapacitation or termination of employment. This amount, as calculated for all the eligible employees, is charged to the Statement of Profit and Loss.

1.11. Tax Expenses

The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are off set only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

Minimum alternate tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

1.12. Leases

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

As per Ind AS 116, Variable lease payments that do not depend on an index or rate and are not in substance or fixed, such as those based on performance (i.e., percentage of sales) are not included as lease payments and these payments are recognized in the statement of profit or loss in the period in which the event that triggers the payment occurrence.

Hence, the company did not recognize any ROU as the lease agreement does not contain fixed Minimum Lease payments.

1.13. Borrowing costs

Borrowing costs incurred for obtaining assets which takes substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. Other borrowing costs are treated as expense for the year.

Transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans using effective interest method.

1.14. Earnings per equity share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owner of the company.

• By the weighted number of equity shares outstanding during the financial year

(ii) Diluted earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

1.15. Financial Instruments

i. Financial assets

A. Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.

a) Financial assets carried at amortized cost (AC)

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial assets at fair value through profit or loss (FVTPL)

A Financial asset which is not classified as AC or FVOCI are measured at FVTPL e.g. investments in mutual funds. 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 and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in which it arises.

c) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose Objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

B. Investments in subsidiaries

The Company has accounted for its investments in subsidiaries at cost and not adjusted to fair value at the end of each reporting period. Cost represents amount paid for acquisition of the said investments.

ii. Financial Liabilities

A. Initial recognition

All financial liabilities are recognized at fair value.

B. Subsequent measurement

Financial liabilities are carried at amortized 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.

1.16. New Standards and interpretations no yet adopted

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. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

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 the decisions of primary users of general-purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.

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 has evaluated the amendment and there is no impact on 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 financial statements 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.

2.28 Segment Reporting

The Company concluded that there is only one operating segment i.e, Manufacturing of Pharmaceutical products. Hence, the same becomes the reportable segment for the Company. Accordingly, the Company has only one operating and reportable segment, the disclosure requirements specified in paragraphs 22 to 30 are not applicable. Accordingly, the Company shall present entity-wide disclosures enumerated in paragraphs 32, 33 and 34 of Ind AS 108.

2.29 Employee benefits Gratuity benefits

In accordance with applicable laws, the Company has a defined benefit plan which provides for gratuity payments (the “Gratuity Plan”) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of employment with the Company. Liabilities in respect of the Gratuity Plan.

The Company has covered its gratuity liability according to the IND AS. The benefits are determined and carried out at each Balance Sheet date.

Contribution to Provident Fund

The employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee’s qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed Rs. 1,45,759/- to the provident fund plan during the years ended 31^st March 2023.

2.33 Fair Value Measurements: i) Fair Value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant input to the measurement, follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in and active market is determined using valuation techniques which maximize the use of observable market date rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payable. The main purpose of these financial liabilities is to finance the Company’s operations.

The Company’s principal financial assets include loans. Trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTPL investments and investments in its associates.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversee the management of these risks. The company’s Board of Directors is supported by the senior management that advises on financial risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance to the Company’s board of directors that the company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Carrying amounts reported in the statement of financial position for cash and cash equivalents, trade and other receivables. Trade and other payables and other liabilities approximate their respective fair values due to their short maturity.

2.34 Contingent Liabilities and Commitments:

The following are the details of contingent liabilities and commitments:

2.35 Balance Confirmations:

Confirmations of receivables and payable balances have not been received by the Company; hence, reliance is placed on the balances as per books. In the opinion of the management, the amounts are realizable /payable in the ordinary course of business.

2.36 Financial Risk Management

In course of its business, the company is exposed to certain financial risk such as market risk (Including currency risk and other price risks), credit risk and liquidity risk that could have significant influence on the company’s business and operational/financial performance. The Board of directors reviews and approves risk management framework and policies for managing these risks and monitor suitable mitigating actions taken by the management to minimize potential adverse effects and achieve greater predictability to earnings.

2.37 Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, a means of

mitigating the risk of financial loss from defaults. The company makes an allowance for doubtful debts/advances using expected credit loss model.

2.38 Liquidity risk

Liquidity risk refers to the risk that the company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as pre requirements. The Company’s exposure to liquidity risk is minimal.

2.39 Market Risk

Market risk is the risk that changes in market prices, such as foreign exchanges rates, interest rate And equity prices, which will affect the company’s income of the value of its holdings of financial Instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

a) Interest Rate Risk

Interest risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate Because of changes in market interest rates. The company has exposure only to financial instruments at fixed interest rates. Hence, the company is not exposed to significant interest rate Risk.

b) Price Risk

The company’s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. The majority of the company’s equity instruments are publicly traded.

2.40 Capital Management Risk

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for stake holders. The company also proposes to maintain an optimal capital structure to reduce the cost of capital. Hence, the company may adjust any dividend payments, return capital to shareholders or issue new shares. Total capital is the equity as shown in the statement of financial position. Currently, the company primarily monitors its capital structure on the basis of gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the company.

The capital for the reporting year under review is summarized as under:

2.41 Standards Issued But Not Effective

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

As at the date of issue of financial statements, there are no new standards or amendments which have been notified by the MCA but not yet adopted by the Company. Hence, the disclosure is not applicable.

2.43 Other Statutory Information:

i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

ii. The Company does not have any transactions with companies struck off.

iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

v. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

vi. The Company has 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) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

vii. The Company has 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 Group 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.

viii. The Company has not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the

2.47 The Company’s management has written off the closing stock of raw material to the tune of 149.23 based on the fact that the stock has expired and will no longer be useful for future usage. The auditors relied on information supplied by management.

2.48 The closing balances of trade receivables, trade payables, and loans and advances are subject to confirmation from the respective parties, and the auditors rely on the information provided by management.

As per our report of even date For and on behalf of Board

For A M Reddy & D R Reddy

Chartered Accountants Sd/- Sd/-

FRNo:009068S Dr. Dhananjaya Alli Mr. Murali Meraga

Whole Time Director Managing Director

Sd/- (DIN:08574891) (DIN:00610909)

D Ramakrishna Reddy

Partner Sd/-

M.No.209211 Mr. Suneel Pachipala

UDIN: 23209211BGYWLA7889 Chief Financial Officer

Place: Hyderabad Date: 30/05/2023

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Mar 31, 2018

1.1.1 Rights attached to equity shares

“The Company has only one class of equity shares having a face value of Rs.2 /- each. Each holder of equity share is entitled to one vote per share.In the event of liquidation of the Company, the equity shareholders will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.”

The Company has made Company has made preferential allotment of shares during the year under review. Company has issued 20,75,906 Equity shares at Rs.24.05 per share which inclusive of face value Rs.2 per share and Security Premium of Rs.22.05 per share and 5,00,000 Equity Shares at Rs.50.00 per share which inclusive of face value Rs.2 per share and Security Premium of Rs.48.00 per share. Company has followed the procedure prescribed Under section 142 of the Act and necessary documents are filed with ROC & SEBI for the preferential allotment and hence company is in compliance with Section 62(1) (c) preferential allotment of shares, Rule 13 of Companies (Share Capital and Debentures) Rules, 2014 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014 and purpose of application of the funds so raised.

Term loan from Vijaya bank carrying floating interest rate of 11.70% repayable in twenty six equal quarterly installments at the end of each quarter commencing from 31st Nov, 2017 after a moratorium period of Six months from the date of disbursement. This loan is sucured by first charge on mortgage of Entire Plant,Equipment and other assets and further secured by entire current assets of the company along with factory land and building & Personal Guarantee of Directors.

Mortgage loan from Vijaya bank carrying floating interest rate of 11.90% repayable in One twenty equal Monthly installments Starting from the ensuring month of first drawal i.e 30.04.2017. This loan is secured by the first charge on the land and building of the factory & Personal Guarantee of Directors.

Working Capital Facility and Non Fund Based Limit from Vijaya Bank is secured by way of first pari-passu charge on current assets and second pari-passu charge on fixed assets of the company & Personal Guarantee of Directors. The Working Capital is repayable on demand. The coupon rate is linked to Marginal Cost Fund based lending rates. (MCLR).

1.1 First-time adoption of Ind AS

These financial statements, for the year ended 31st March 2018, are the firstset of financial statementsthe Company has prepared in accordance with Indian Accounting Standards(IndASs). For periods up to and including the year ended 31st March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

The Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2018, together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April 2016, i.e.,the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exemptions Applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

The Company adopted not to measure any item of property, plant and equipment at its fair value at the Transition Date. Accordingly, on the transition date, the net carrying value of the property, plant and equipment and intangible assets shall be considered as deemed cost for Ind AS purposes.

Ind AS 21 “The Effects of Changes in Foreign Exchange Rates” Cumulative currency translation differences for all foreign operations are deemed to be zero as at 1 April 2016.

The Company adoptedto measure investments in subsidiaries at cost i.e., carrying value of the investments on the date of transition shall be considered as deemed cost for Ind AS purposes.

Estimates

The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTPL- Quoted equity shares

- Impairment of financial assets based on expected credit loss model (“ECL model”)

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April 2016, the date of transition to Ind AS and as of 31st March 2017.

FVTPL Financial assets

Under Indian GAAP, the Company accounted for long term investments in quoted equity shares as investment measured at cost less provision for diminution other than temporary diminution in the value of investments, if any. Under IndAS, the Company has designated such investments as FVTPL investments. Ind AS requires FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognized as a separate component of equity, in the retained earnings.

Deferred tax

Indian GAAP requires deferred tax accounting using the statement of profit and loss approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. Trade receivables

Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the company impaired its trade receivable by Rs. 3.19 Lakhs on 1st April 2016 which has been eliminated against retained earnings. The company impaired its trade receivable by Rs.0.94 Lakhs on 31stMarch 2017, such increase in impairment has been recognized in the profit the loss account for the year ended 31st Match 17.

2.1 Related Parties

In accordance with the provisions of Ind AS 24 “Related Party Disclosures” and the Companies Act, 2013, Company’s Directors, members of the Company’s Management Council and Company Secretary are considered as Key Management Personnel. List of Key Management Personnel of the Company is as below:

- Mr.Dr.DhananjayaAlli, Managing Director

- Stanley PrabhakarRedy, Director(Executive)

- N.V.Chalapathi Rao, Whole time Director

- M.H.Rao, Director (Non-Executive)

- G.Narendra, Director (Independent Non-Executive)

- Vani Vatti, Director (Independent Non-Executive)

- K.Rajendra Prasad, Nominee Director

- AnandChittajallu ,Additional Director

- UmeshVirupakahBanakar,Additional Director

- DivyaBhavaniChakravartula ,Additional Director

- Arjun Upadyay, Company Secretary

- Suneel Pachipala, Chief Financial Officer

3.1 Segment Reporting:

The Company concluded that there is only one operating segment i.e., Manufacturing of Pharmaceutical products. Hence, the same becomes the reportable segment for the Company. Accordingly, the Company has only one operating and reportable segment, the disclosure requirements specified in paragraphs 22 to 30 are not applicable. Accordingly, the Company shall present entity-wide disclosures enumerated in paragraphs 32,33 and 34 of Ind AS 108.

4.1 Employee benefits:

Gratuity benefits

In accordance with applicable laws, the Company has a defined benefit plan which provides for gratuity payments (the “Gratuity Plan”) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of employment with the Company. Actuarial Valuation is pending.

5.1 Income Taxes:

a. Income tax expense/ (benefit) recognized in the statement of profit and loss:

Income tax expense/ (benefit) recognized in the statement of profit and loss consists of the following:

The Company’s average effective tax rate for the years ended March 31, 2018 and 2017 were 20.39% and 20.04% respectively.

c. Deferred tax assets & Liabilities:

The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description of the items that created these differences is given below:

6.1 Investments:

Investments consist of investments in equity shares of Everest Organics Limited measured at Fair value through Profit & Loss Account.

The details of investments as of 31stMarch 2018 are as follows:

7.1 Financial Instruments:

Set out below, is a comparison by class of the carrying amounts and fair value of the financial instruments, other than those with carrying amounts that are reasonable approximations of fair values

8.1 Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk and Market risk. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors, risk management committee and the Audit Committee is responsible for overseeing the Company’s risk assessment and management policies and processes.

a. Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Trade Receivables-The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Financial assets that are neither past due nor impaired - None of the Company’s cash equivalents, including deposits with banks, were past due or impaired as at 31 March 2018. Of the total trade and other receivables, Rs. 0.11 lacs as at 31 March 2018 and Rs. 4.13 lacs at31stMarch 2017.

The Company’s credit period for customers generally ranges from 60-90 days. The aging of trade receivables that are past due but not impaired is given below:

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

On account of adoption of Ind AS 109, the Company uses Expected Credit Loss (ECL) model for assessing the impairment loss. For this purpose, it is weighted average of credit losses with the respective risks of default occurring as weights. The credit loss is the difference between all contractual cash flows that are due to an entity as per the contract and all the contractual cash flows that the entity expects to receive, discounted to the effective interest rate.

Reconciliation of allowance for credit losses

The details of changes in allowance for credit losses during the year ended 31 March 2018 and 31 March 2017 are as follows:

CAPITAL MANAGEMENT

The Company’s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategicinvestment plans. The funding requirement is met through equity, borrowings and operating cash flows required.

The company’s Debt Equity ratio is as follows:

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Mar 31, 2016

I. Share Capital

The Company Proposed for reduction of Equity Share Capital in the EGM held on 15th November 2012.

In terms of order of High Court of Judicature at Hyderabad for the State of Telangana and Andhra Pradesh dated 20th April 2015 the share capital of the company has been reduced from 15 crores to 5 Crores. The Accumulated losses to the Tune of 10 crores have been set off against the Share Capital.

II. Secured Loans

a) Asset Backed loan from State Bank of India, SME branch Hyderabad is secured by way of registered mortgage of land & building in plot no. 10 to 14 and 16 to 20, admeasuring 21,969.23 sq.mt in Sy no.448/2,449/2, & 450/2, Gopalaipally (V), Chityal Industrial Estate Narkatpally (m), Nalgonda Dist and hypnotization of Plant & Machinery of the factory.

b) Sri Dr Dhananjaya Alli Managing Director and Sri N.V Chalapathi Rao Director have guaranteed the above loan in their personal capacities.

c) Repayment and Interest : Drop - line overdraft for a period of 96 months with a moratorium of six months i.e Rs.9.50/-lac per month for 83 months commencing from January 2016 and Rs. 11.50/- lac in 84th month i.e., 2023.

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Mar 31, 2015

I. Share Capital

The Company Proposed for reduction of Equity Share Capital in the EGM held on 15th November 2012.

In terms of the High Court of Judicature at Hyderabad for the state of Telangana and Andhra Pradesh the share capital of the company has been reduced from 15 crores to 5 Crores. The Accumulated losses to the Tune of 10 crores is been set off against the Share Capital.

II. Secured Loans

a) Working Capital loan from Allahabad Bank, Himayathnagar branch Hyderabad are secured by a first charge by way of hypothecation of all present and future stocks, spares, book debts, work in progress, finished goods and all other current assets of the company.

b) Working Capital loan from Allahabad Bank, Himayathnagar branch Hyderabad are further secured by equitable mortgage on land & building and Hypothecation of plant & Machinery on plot no. 10 to 14 and 16 to 20, admeasuring 21,969.23 sq.mt in Sy no.448/2,449/2, & 450/2, Gopalaipally (V), Chityal Industrial Estate Narkatpally (m), Nalgonda Dist.

c) Sri Dr Dhananjaya Alli Managing Director and Sri G.Narendra Director have guaranteed the above loan in their personal capacities.

III. Sundry Creditors

Based on the information available with the Company, there are no dues/Interest outstanding to Micro, Small and Medium Enterprises, as defined under the Micro, Small and Medium Enterprises Development Act 2006, as at March 31, 2015.

iv. Deferred Tax

a. During the current year the tax effect of the timing differences resulted in deferred tax Asset of Rs 10,51,092/ - and the same has been shown in P&L Account and net Deferred tax liability of Rs 11,32,193/- is shown in the Balance Sheet under schedule Deferred Tax Liability Net.

V. Related Parties Disclosure

i) Particulars of Related Companies Name of the Related Party Related Companies Nature of Relation American Generics Associate company Vista Pharmaceutical Inc Associate Company Key Management Personnel

Dr. Dhananjaya Alli Managing Director Stanley Prabhakar Reddy Director (Executive) M.H.Rao Director(Non-Excecutive) G.Narendra Director(Independent Non-Executive) Vani Vatti Director(Independent Non-Executive) K.Rajendra Prasad Nominee Director- APIDC

VI.Applicability of Accounting Standard - 17

The Company has only one business segment, i.e formulations, hence segment reporting as defined in accounting standard 17 is not applicable.

VII. Figures have been rounded off to the nearest rupee.

VIII a. For the period ended 31 st March 2015, the Company has adopted the Rates and Method prescribed under Schedule II of Companies Act 2013, for the calculation of depreciation. As a result depreciation is more by Rs.25.62 lakhs and the profits of the company are less by the aforesaid amount.

b. In respect of the assets in the opening balance as on 01.04.2014 for which the useful life has expired as per Companies Act 2013, have been adjusted against the opening balance of retained earnings in an amount of Rs.2.05 lakhs.

IX. Contingent Liability : Commissioner of Income Tax III, Hyderabad issued a demand of tax for 3,86,58,242/- for the Assessment Year 2006-07 assuming the interest waived by IDBI under One time settlement of dues as income for the year. The company''s appeal against demand of Rs 3,86,58,242 was decided in company''s favour by the Income tax appellate tribunal Andhra Pradesh Hyderabad. The Income Tax department preferred an appeal before the Andhra Pradesh high court which again was decided in favour of the company. The dept has preferred an appeal against the orders of the AP high court in the Supreme Court.

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Mar 31, 2013

1. Previous year''s figures have been regrouped/rearranged wherever necessary.

2. (a) Managerial

Remuneration: 2012-2013 2011-2012

NIL NIL

(b). No provision has been made for Managing Director''s remuneration with his consent.

3. Foreign Exchange earnings through export sales received (US$ 1386932) in Rs 7, 46, 89,089 (Previous year (US$ 739247) in Rs. Rs.3, 62, 23,141

4. No depreciation on Imported Plant & Machinery of Rs.294.74 lakhs has been provided as the Machinery though installed not put to commercial use.

5. Stores and Consumables: 1/10 of closing stock value of Rs.1,01,709/- purchase of consumables like punches and dies, which are used for tablet compressions are written off during the year.

6. Sundry Creditors include dues to SSI Units of Rs 29,237 outstanding for more than 30 days as on 31.03.2013, which was paid subsequently.

7. The Company has only one business segment, i.e. formulations, hence segment reporting as defined in Accounting Standard 17 is not applicable.

8. Some of the trade creditors and other liabilities are yet to be confirmed.

9. The Revised Schedule VI to the Companies Act, 1956 has become effective from 1st April, 2011, for preparation and presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Accordingly the figures for the previous year have been reclassified, wherever necessary to conform with the current year''s classification.

10. Reduction of Share Capital

The Company Proposed for reduction of Equity Share Capital in the last AGM, but the same could not be accounted for as the required approvals from BSE and SEBI are awaited.

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Mar 31, 2012

1. Previous year's figures have been regrouped/rearranged wherever necessary.

2. (a) Managerial 2011-2012 2010-2011

Remuneration: NIL NIL

(b). No provision has been made for Managing Director's remuneration with his consent.

3. Foreign Exchange earnings through export

sales received (US$739247) in.Rs.3, 62, 23,141 (Previous year (US$ 1256750) inRs.5, 67, 44,609

4. No depreciation on Imported Plant & Machinery of Rs.294.74 lakhs has been provided as the Machinery though installed not put to commercial use.

5. Stores and Consumables: 1/10 of closing stock value of Rs.1, 01,709/- purchase of consumables like punches and dies., which are used for tablet compressions are written off during the year. The balance amount of Rs 1,01,706 shown under the head inventories.

6. Sundry Creditors include dues to SSI Units of Rs 1, 51,046 outstanding for more than 30 days as on 31.03.2012, which was paid subsequently.

7. The Company has only one business segment, i.e. formulations, hence segment reporting as defined in Accounting Standard 17 is not applicable.

8. Some of the trade creditors and other liabilities are yet to be confirmed.

9. The Revised Schedule VI to the Companies Act, 1956 has become effective from 1st April, 2011, for preparation and presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements.' Accordingly the figures for the previous year have been reclassified, wherever necessary to conform with the current years classification.

10.1 Money received against share warrants

The company proposed to issue shares against share warrants after complying with the statutory formalities and collected Rs.10 lacks from the prospective share holders. However ,as the warrant holdess decided to exercise their right for allotment of shares,the money was refunded subsequantly in June2012.

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Mar 31, 2011

1. Previous years figures have been regrouped/rearranged wherever necessary.

2. (a) Managerial

Remuneration: 2010-2011 2009-2010 NIL NIL

(b) No provision has been made for Managing Directors remuneration with his consent.

3. Foreign Exchange earnings through export sales received (US$ 1256750) inRs.5,67,44,609 (Previousyear US$163904 in Rs.80,13,849).

4. No depreciation on Imported Plant & Machinery of Rs.294.74 lakhs has been provided as the Machinery though installed, but not put to commercial use.

5. Capital Work-in-progress amounting to

Rs.7,30,19,917/-capitalised during the year as the expansion project is implemented in full during the year and commercial production started during 2nd quarter.

6. Stores and Consumables: 1/10 of closing stock value of Rs.1,01,709/- purchase of consumables like punches and dies, which are used for tablet compressions are written off during the year. The balance amount of

Rs.2,03,417 shown under the head inventories.

7. Sundry Creditors include dues to SSI Units of Rs.51,143 outstaning for more than30 days as on 31.03.2011,which was paid subsequently.

8. The Company has only one business segment, i.e. formulations, hence segment reporting as defined in Accounting Standard -17 is not applicable.

9. Contingent Liabilities:

Commissioner of Income Tax III, Hyderabad issued a demand of tax for Rs.3,86,58,242/- for the Assessment Year 2006-07 assuming the interest waived by IDBI under One time settlement of dues as income for the year, which will be contested in Appellate Tribunal of Income Tax within the scheduled time.

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Mar 31, 2010

1. Previous sears figures have been regrouped/rearranged wherever necessary.

2.(a) Managerial

Remuneration: 2009-2010 2008-2009

NIL NIL

(b) No provision has been made for Managing Directors remuneration with his consent, as the expansion project is still under implementation.

3. Foreign Exchange earnings through export sales received ( US$ 163904) inRs.80,13,849(Previous year US$ 4,17,110 in Rs. 1,82,30,522).

4. No depreciation on Imported Plant & Machinery of Rs.294.74 lakhs has been provided as the Machinery though installed during the year, but not put to commercial use.

5. Stores and Consumables: 1/10 of closing stock value of Rs. 1,01,709/- purchase of consumables like punches and dies, which arc used for tablet compressions are written off during the year. The balance amount of Rs.3,05,126 shown under the head inventories.

6. Sundry Creditors include dues to SSI Units of Rs 96,594/- outstanding for more than 30daysason 31.03.2010, which was paid subsequently.

7. The Company has only one business segment, i.e. formulations, hence segment reporting as defined in Accounting Standard - 17 is not applicable.

8. Contingent Liabilities:

The Duputy Commissioner of Income Tax has passed an order for the Assessment Year : 2006-07 and raised a demand of Rs.3,86,58,242/-. The Company has filed an appeal before the Commissioner of Income tax (Appeals), Hyderabad. Though the company won the case before Commissioner of Income Tax (Appeals), Hyderabad. The Department has contested the order of the Commissioner (Appeals).