Notes to Accounts of Decipher Labs Ltd.

Mar 31, 2024

p) Provisions

Provisions for legal claims and returns are recognised when the company has a present legal or constructive
obligation as a result of past event, it is probable that an outflow of resources will be required to settle the
obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the liability. The increase in the provisions due to the passage of time is recognized as interest expense.

q) Employee benefits Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognized in respect
of employees’ services up to the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.

r) Contributed equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.

s) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting
period.

t) Earning per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the company

• By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus
elements in equity shares issued during the year and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account:

• The after income tax effect of interest and other financing costs associated with dilutive potential equity shares,
and

• The weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.

u) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker.

v) Leases

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

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.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease
term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be
exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the
lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever
events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in¬
use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely
independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it
will exercise an extension or a termination option.

w) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs
with two decimals as per the requirement of Schedule III, unless otherwise stated.

x) Standards issued but not effective

There is no such notification applicable from 01/04/2024.

13.1: Disaggregated Revenue Disclosures are not applicable to the Company since the Company deals in one product i.e., trading and
manufacturing of Pharmaceutical drugs.

13.2: Trade Receivables and Contract Balances

a) The Company classifies the right to consideration in exchange for deliverables as receivable.

b) A receivable is a right to consideration that is unconditional upon passage of time. Trade receivables are presented net of
impairment in the Balance Sheet.

13.3: Disclosures relating to pending performance obligations are not given since there are no pending obligations.

The amounts receivable from customers become due after expiry of credit period which on an average is 30 to 120
days. There is no significant financing component in any transaction with the customers.

The Company does not provide performance warranty for products, therefore there is no liability towards performance.

The Company does not have any material performance obligations which are outstanding as at the year end as the
contracts entered for sale of goods are for short term in nature.

(B) There are no advances received from customers during the year.

20. Financial instruments and risk management

Fair values

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables,
cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their
short term nature.

2. The fair value of 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.

Set out below, is a comparision by class of the carrying amounts and fair value of the Company''s financial instruments,
other than those with carrying amounts that are reasonable approximation of fair values:

*Fair value of instruments is classified in various fair value
hierarchies based on the following three levels: Level 1:

Level 1 hierarchy includes financial instruments measured
using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques, which maximise the use of observable market data and rely as little as possible on entity
specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is
included in Level 2.

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

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are
inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair
value estimates presented above are not necessarily indicative of the amounts that the Company could have realized
or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to
the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as
at the transaction date, the Company has assessed the fair value to be the carrying value of the investments as
these companies are in their initial years of operations obtaining necessary regulatory approvals to commence their
business.

21. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate),
liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The
Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse
effects on the financial performance of the Company.

(A) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises of currency risk, interest rate risk and price risk. Financial
instruments affected by market risk include loans and borrowings, trade receivables and trade payables
involving foreign currency exposure. The sensitivity analyses in the following sections relate to the position as
at March 31, 2024 and March 31, 2023.

The analysis exclude the impact of movements in market variables on the carrying values of financial assets and
liabilities.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.
This is based on the financial assets and financial liabilities held at 31st March, 2024 and 31 March 2023.

(i) Foreign currency exchange rate 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’s exposure to the risk of changes in foreign exchange rates
relates primarily to the trade/ other payables, trade/other receivables and derivative assets/liabilities. The risks
primarily relate to fluctuations in US Dollar against the functional currencies of the Company. The Company’s
exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact
of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following tables demonstrate the sensitivity to a reasonably possible change in US dollars exchange rates,
with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the
fair value of monetary assets and liabilities.

(B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current
and non-current held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection
losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in
payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary
under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances, bank deposits and
interest receivable on deposits represents company’s maximum exposure to the credit risk. 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.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including
default risk associate with the industry and country in which customers operate. Credit quality of a customer is
assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with
this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables. The
maximum exposure to credit risk at the reporting date is the carrying value of each class of
financial assets.

22. Capital management Capital management and Gearing Ratio

For the purpose of the Company''s capital management, capital includes issued equity capital 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.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and
borrowings.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March
2024 and 31st March 2023.

23. MSME Note

Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have
been determined based on the confirmations received in response to intimation in this regard sent by the Company
to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or
otherwise has either been paid or payable or accrued and remaining unpaid as at March 31, 2024

25. Contingent liabilities and Capital Commitments- Nil ( Previous year-Nil)

26. Related party disclosures

Names of related parties and nature of relationships:

Name of the related parties and Nature of relationship

0 Wholly owned Subsidiary Company

Decipher Software Solutions LLC., USA

Step down subsidiary Company

Decipher Middle East W.L.L., Bahrain

ii) Key Management Personnel (KMP):

Sushanth Mohan Lai - Executive Whole Time Director
Janaki Ram Ajjarapu - Director
Mary Vara Prasad Mutluri -IndependentDirector
Venkateswara Rao Gudipudi - Independent Director
Lakshmi Vijaya Nimmala - Independent Director
Gayathri Raghuram - Director w.e.f. 04.09.2023
Sonam Jalan - Chief Financial Officer

Megha Agarwal - Company Secretary retired w.e.f 19.07.2023
Chappidi Siva Kumar Reddy - Company Seretary w.e.f. 19.07.2023

ii) Relatives of Key Management Personnel (KMP):

Suchit Mohan Lai - Father of Sushanth Mohan Lai

iii) Enterprises in which key managerial personnel and/or their relatives have control:

Vitpro LLC

28. Segment Information

a) Description of segments and principal activities

The Company primarily operates in the Pharmaceutical segment. The Chief Operating Decision
Maker (CODM) reviews the performance of the Pharmaceutical segment at the consolidated
level and makes decisions on sales volumes and profitability.

b) Major Customer in Pharmaceutical Segment

72.87% (P.Y 55.56%) of Revenue is coming from one single customer

29. No funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person(s) or
entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded
in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on
behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from
any party(s) (Funding Party) with the understanding that the Company shall whether, directly or
indirectly lend or invest in other persons or entities identified by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

30. The Company is using Tally accounting software Version Prime 2.0 and the audit trail feature is
not enabled. The company is in the process of establishing necessary controls and maintaining
documentation relating to audit trail (edit log) as per Rule 3(1) of Companies (Accounts) Rules,
2014

31. Relationship with Struck off companies

The company does not have any transaction with companies struck off under Section 248 of the
Companies Act, 2013 or Section 560 of Companies Act, 1956, during the current year and in
the previous year.

As per our report of even date For
Ramanatham & Rao Chartered
Accountants
FRN : 0029345

Sd/- Sd/- Sd/-

K.Srinivasan Sushant Mohan Lai Venkateswara Rao

Partner Executive Director Director

M.No: 206421 DIN: 01227151 DIN: 02147615

Sd/- Sd/-

Piace: Hyderabad Chappidi Siva Kumar Reddy Sonamjalan

Date: 30.05.2024 Company Secretary Chief Financial Officer

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Mar 31, 2015

1. Rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.10 /- each. Each holder of equity share is entiltled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the equity shareholders will be entitled to receive 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.

2. Expired stocks of Raw Materials Written off to the extent of Rs. 37,90,000/- (P.Y 29,48,760/-) respectively

3.Deferred tax is not recognised as there is no reasonable certainty that sufficient future taxable income will be available against which such deffered tax assets can be realised.

4. Related Party disclosures

As per AS-18, the disclosures of transactions with the related parties are given below:

1. Key Management Personnel Mr.Suchit Mohan Lal, Managing Director Mr.Sushant Mohan Lal, Director

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Mar 31, 2014

Not Available

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Mar 31, 2013

NOTE 1: Comparitive Figures of previous year have been regrouped / rearranged whereever necessary

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Mar 31, 2010

1. CONTINGENT LIABILITIES:

a. Claims against the company not acknowledged as debts - NIL-

b. Estimated amount of contracts remaining to be executed on capital account and not provided for: -NIL-

c. Other Money due which the Company is contingently liable -Nil-

2. In terms of condition of prudence as set out in paragraphs 15 to 18 of AS-22. considering the history losses of the company, sufficient future taxable income cannot be estimated with virtual or reasonable certainty. The company therefore has not recognized net deferred tax asset in the financial statement for the year ended 31-03-10. Further in accordance with paragraph 19 of AS-22 the net deferred tax asset, if any, shall be re assed at the end of each balance sheet date hereafter and accordingly due recognition shall be given in the financial statement.

3. Value of imports calculated on CIF Basis -Nil-

4. Expenditure in Foreign Currency on account of royally Know how, professional and cousultaion fee, interest and other matters - Nil

5. Confirmation of balances in respect of Sundry Debtors, Sundry Creditors, Advances are in progress and is a continuous process.

6. The quantitve details for the operation of the year as required under part II of Schedule IV of the Companies Act, 1956 are given in the statement annexed.

7. Previous years figures have been re-grouped, where ever necessary to confirm to the current years presentation.

8. All figures have been rounded off to the nearest rupee.