Accounting Policies of Medico Remedies Ltd. Company

Mar 31, 2025

2. SIGNIFICANT ACCOUNTING POLICIES:

(a) Property, Plant and Equipment & Depreciation
(i) Recognition and Measurement

Items of property, plant and equipment are measured at cost less accumulated
depreciation and impairment losses, if any. The cost of an item of property, plant
and equipment comprises:

- its purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates.

- borrowing cost and any costs directly attributable to bringing the asset to
the location and condition necessary for it to be capable of operating in the
manner intended by management.

- the initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located, the obligation for which the
Company incurs either when the item is acquired or as a consequence of
having used the item during a particular period for purposes other than to
produce inventories during that period.

Income and expenses related to the incidental operations, not necessary to bring the
item to the location and condition necessary for it to be capable of operating in the
manner intended by management, are recognised in the Statement of Profit and
Loss. If significant parts of an item of property, plant and equipment have different
useful lives, then they are accounted for as separate items (major components) of
property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is
recognised in Statement of Profit and Loss. Cost of Items of Property, plant and
equipment not ready for intended use as on the balance sheet date, is disclosed as
capital work in progress. Advances given towards acquisition of property, plant
and equipment outstanding at each balance sheet date are disclosed as Capital
Advance under Other non-current assets

(ii) Subsequent Expenditure

Subsequent expenditure relating to PPE is capitalised only if such expenditure
results in an increase in the future benefits from such asset beyond its previously
assessed standard of performance.

(b) Intangible Assets

i. Recognition and Measurement

Intangible assets comprising of Computer Software are stated at acquisition cost,
including any cost attributable for bringing the asset to its working condition, less
accumulated amortization and impairment losses, if any. Technology support cost
and annual maintenance cost for such software is charged annually to the Statement
of Profit and Loss.

ii. Subsequent Expenditure

Other Intangible assets are recognized where it is probable that future economic
benefit attributable to the assets will flow to the company and its cost can be reliably
measured.

Depreciation is the systematic allocation of the depreciable amount of PPE over its
useful life.

Depreciation on property, plant and equipment is provided, using the Written down
Value method (WDV), pro-rata to the year of use of assets, at the rates specified in
Schedule II of the Companies Act, 2013 with exception the following:

- In case of assets, falling under the block of Building, constructed on rental
premises, depreciation is provided either on the basis of useful life of the assets
as estimated by the management or rental period whichever is lower.

- Assets costing Rs. 10,000 or less are fully depreciated in the year of purchase.

Intangible assets are amortised over the economic useful life estimated by the
management. Intangible assets being the computer software is amortised over a period
of three years.

(d) Impairment

At the end of each reporting period, the Company reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss
(if any).

The following intangible assets are tested for impairment each financial year even if
there is no indication that the asset is impaired:

(a) an intangible asset that is not yet available for use; and

(b) an intangible asset that is amortised over a period exceeding ten years from the date
when the asset is available for use.

If the carrying amount of the assets exceeds the estimated recoverable amount,
impairment is recognised for such excess amount. The impairment loss is recognised as
an expense in the Statement of Profit and Loss, unless the asset is carried at revalued
amount, in which case any impairment loss of the revalued asset is treated as a
revaluation decrease to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use.
Value in use is arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a
revalued asset) in earlier accounting periods no longer exists or may have decreased,
such reversal of impairment loss is recognised in the Statement of Profit and Loss, to
the extent the amount was previously charged to the Statement of Profit and Loss. In
case of revalued assets, such reversal is not recognised.

(e) Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange
prevailing on the date of the transaction. All assets and liabilities related to foreign
currency transactions remaining unsettled at the end of the year are translated at year-
end rates.

Realized gain or loss resulting from the settlement/translation of such transactions of
monetary assets and liabilities denominated in foreign currencies are recognized in the
Statement of Profit and Loss.

(f) Financial Instruments

i. Recognition initial measurement

Trade receivables and debt securities issued are initially recognised when they are
originated. All other financial assets and financial liabilities are initially recognised
when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item
not at fair value through profit and loss (FVTPL), transaction costs that are directly
attributable to its acquisition or issue.

ii. Financial Assets

Classification

The Company classifies financial assets as subsequently measured at amortised cost,
fair value through other comprehensive income or fair value through profit or loss on
the basis of its business model for managing the financial assets and the contractual
cash flow characteristics of the financial asset.

Initial recognition and measurement

All financial assets (not measured subsequently at fair value through profit or loss) are
recognised initially at fair value plus transaction costs that are attributable to the
acquisition of the financial asset. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL)
model for measurement and recognition of impairment loss on the following financial
assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g.,
loans, debt securities, deposits, and bank balance.

b) Trade receivables.

The Company follows âsimplified approachâ for recognition of impairment loss
allowance on trade receivables which do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes
in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at
each reporting date, right from its initial recognition.

iii. Financial Liabilities

Classification

The Company classifies all financial liabilities as subsequently measured at amortised
cost, except for financial liabilities at fair value through profit or loss. Such liabilities,
shall be subsequently measured at fair value

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair
value through profit or loss, loans and borrowings or payables, 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 Companyâs financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the
balance sheet if there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Effective interest method

The company uses effective interest rate, determined using the effective interest
method, for calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period.

Effective interest rate is the rate that exactly discounts estimated future cash payments
or receipts through the expected life of the financial asset or financial liability to the
gross carrying amount of a financial asset or to the amortised cost of a financial
liability. For calculating the effective interest rate, an entity shall estimate the expected
cash flows by considering all the contractual terms of the financial instrument (for
example, prepayment, extension, call and similar options) but shall not consider the
expected credit losses. The calculation includes all fees and points paid or received
between parties to the contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.

(g) Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realisable value
after providing for obsolescence and other losses, where considered necessary. Cost
includes all charges in bringing the goods to their present location and condition, and
other levies, transit insurance and receiving charges.

Net realizable value is the estimated selling price in ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale.

(h) Revenue recognition

Revenue from sales of products are recognized when the significant risks and rewards
of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably,
there is no continuing management involvement with the goods and the amount of
revenue can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable.
Revenue is recognized upon transfer of control of promised products or services to
customers/patients in an amount that reflects the consideration we expect to receive in
exchange for those products or services. Sales and Service Income exclude Goods and
Service Tax (GST) and are net of trade / volume discounts, where applicable.

Export benefits available under prevalent schemes are accrued in the year in which the
goods are exported and no significant uncertainty exist regarding its ultimate
collection.

Interest income is recognised with reference to the Effective Interest Rate method.

(i) Employee benefits

Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. A
liability is recognised for the amount expected to be paid if the company has a present
legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related
service is provided. Prepaid contributions are recognised as an asset to the extent that a
cash refund or a reduction in future payments is available.

The Companyâs net obligation in respect of defined benefit plans is calculated by
estimating the amount of future benefit that employees have earned in the current and
prior periods.

The calculation of defined benefit obligations is performed annually by a qualified
actuary using the projected unit credit method.

Remeasurement of the net defined benefit liability, which comprise of actuarial gains
and losses are recognised immediately in other comprehensive income (OCI). Net
interest expense (income) on the net defined liability (assets) is computed by applying
the discount rate, used to measure the net defined liability (asset). Net interest expense
and other expenses related to defined benefit plans are recognised in Statement of
Profit and Loss.

Other long-term employee benefits

The Companyâs net obligation in respect of long-term employee benefits is the amount
of future benefit that employees have earned in return for their service in the current
and prior periods. That benefit is discounted to determine its present value.

Actuarial gains and losses are recognised in other comprehensive income (OCI) in the
period in which they arise.

(j) Leases

The Company has applied Ind AS 116 and at the commencement of the lease contract
recognised a Right-of-Use (RoU) asset at cost and corresponding lease liability, except
for leases with a term of twelve months or less (short-term leases) and leases for which
the underlying asset is of low value (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.

The cost of the right-of-use assets comprises the amount of the initial measurement of
the lease liability, adjusted for any lease payments made at or prior to the
commencement date of the lease, any initial direct costs incurred by the Company, any
lease incentives received and expected costs for obligations to dismantle and remove
right-of-use assets when they are no longer used.

Subsequently, the right-of-use assets is measured at cost less any accumulated
depreciation and accumulated impairment losses, if any. The right-of-use assets are
depreciated on a straight-line basis from the commencement date of the lease over the
shorter of the end of the lease term or useful life of the right-of-use asset.

Right-of-use assets are assessed for impairment whenever there is an indication that the
balance sheet carrying amount may not be recoverable using cash flow projections for
the useful life.

For lease liabilities at commencement date, the Company measures the lease liability at
the present value of the future lease payments as from the commencement date of the
lease to end of the lease term. The lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, the Company''s incremental
borrowing rate for the asset subject to the lease in the respective markets.

Subsequently, the Company measures the lease liability by adjusting carrying amount
to reflect interest on the lease liability and lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to
the related right-of-use asset) whenever there is a change to the lease terms or expected
payments under the lease, or a modification that is not accounted for as a separate lease

The portion of the lease payments attributable to the repayment of lease liabilities is
recognized in cash flows used in financing activities, and the portion attributable to the
payment of interest is included in cash flows from operating activities. Further, ShortÂ¬
term lease payments, payments for leases for which the underlying asset is of low-
value and variable lease payments not included in the measurement of the lease liability
is also included in cash flows from operating activities.

(k) Operating cycle

Based on the nature of products / activities of the Company and the normal time
between acquisition of assets and their realisation in cash or cash equivalents, the
Company has determined its operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current and non-current.

(l) Income tax

Income tax expense represents current and deferred tax. It is recognised in Statement of
Profit and Loss except to the extent that it relates to items recognised directly in equity
or in OCI.

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. It is measured using tax rates enacted or substantively enacted at the
reporting date.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; and

b) Intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.

Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes.

Deferred tax assets are recognised for unused tax losses, unused tax credits and
deductible temporary differences to the extent that it is probable that future taxable
profits will be available against which they can be used. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised; such reductions are reversed when
the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised
to the extent that it has become probable that future taxable profits will be available
against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, using tax rates enacted or substantively enacted at the
reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from
the manner in which the Company expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) the Company has a legally enforceable right to set off current tax assets against
current tax liabilities; and

b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied
by the same taxation authority on the same taxable entity.

Current and deferred tax for the year are recognised in profit or loss, except when they
relate to items that are recognised in other comprehensive income or directly in equity,
in which case, the current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the
accounting for the business combination.

(m) Borrowing Costs

Borrowing costs are interest and other costs that the Company incurs in connection
with the borrowing of funds and is measured with reference to the effective interest rate
applicable to the respective borrowing. Borrowing costs include interest costs measured
at the Effective Interest Rate.

Capitalisation of borrowing costs is suspended and charged to the Statement of Profit
and Loss during extended periods when active development activity on the qualifying
assets is interrupted.

All other borrowing costs are recognised as an expense in the period which they are
incurred.

Mar 31, 2024

CORPORATE INFORMATION

Medico Remedies Limited (âthe Companyâ), is a public limited Company, was incorporated in year 1994 under the provisions of Companies Act, 1956, of India. The Company is domiciled in India with its registered office address being at 1105/1106, Hubtown Solaris, N. S. Phadke Marg, Opp. Teligali, Andheri East, Mumbai - 400069, India. Its equity shares are listed on BSE Limited and National Stock Exchange of India Limited.

The Company is principally engaged in pharmaceutical business. The Company is engaged in the development, manufacture and sale of pharmaceutical and nutraceutical products.

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS(a) Basis of preparation

These financial statements have been prepared in accordance with Indian Accounting Standards (''Ind-AS'') notified by the Ministry of Corporate Affairs in consultation with the National Advisory Committee on Accounting Standards, to comply to in all material aspects with applicable accounting principal in India, the applicable Accounting Standards prescribed under section 133 of the Companies Act, 2013 ("Act") read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, the provision of the Act (to the extent notified) and other accounting principal generally accepted in India, to the extent applicable. These financial statements have been prepared under the historical cost convention on a going concern and accrual basis.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements are authorised for issue by the Board of Directors of the Company at their meeting held on 09^th May 2024.

(b) Basis of measurement

These financial statements are prepared under historical cost convention unless otherwise indicated.

The Financial statement are prepared in Indian rupees rounded off to the nearest lakh except for share data and per share data, unless otherwise stated.

(d) Use of Estimate and Judgements

The presentation of the Financial Statement is in conformity with Ind-AS which requires the management to make judgements and estimates about the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the judgements and estimates used in preparation of the Financial Statements are prudent and reasonable.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period.

Estimates and assumptions are required in particular for:

(i) Useful life and residual value of property, plant and equipment and intangible assets;

Useful lives of tangible assets are based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful lives are different from that prescribed in Schedule II, they are based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturersâ warranties and maintenance support. Assumptions also need to be made, when the Company assesses, whether an asset may be capitalised and which components of the cost of the asset may be capitalised.

(ii) Impairment of Non - Financial Assets

Determining whether the asset is impaired requires to assess the recoverable amount of the asset or Cash Generating Unit (CGU) which is compared to the carrying amount of the asset or CGU, as applicable. Recoverable amount is the higher of fair value less costs of disposal and value in use. Where the carrying amount of an asset or CGU exceeds the recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Key source of estimate uncertainty

(i) Impairment of trade receivables:

The impairment provisions for trade receivables are based on assumptions about risk of defaults and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(ii) Legal and other disputes:

The Company provides for anticipated settlement cost where an outflow of resources is considered probable and a reliable estimate may be made of the likely outcome of the dispute and legal and other expenses arising from claims against the company. These estimates take into account the specific circumstances of each dispute and relevant external advice which are inherently judgmental and could change substantially over times as new facts emerge and each dispute progress.

(iii) Post-employment benefits:

The costs of providing gratuity and other post-employment benefits are charged to the statement of profit and loss in accordance with Ind AS 19 âEmployee benefitsâ over the period during which benefits derived from the employeeâs services. The costs are assessed on the basis of assumptions selected by management. These assumptions include future earnings and salary increases, discount rate, expected long-term rates of return on assets and mortality rates.

(iv) Assumptions are also made by the management with respect to valuation of inventories, evaluation of recoverability of deferred tax, contingencies, determination of useful lives of Property, Plant and Equipments and measurement of recoverable amounts of cash generating units. All assumptions are reviewed at each reporting date.

2. SIGNIFICANT ACCOUNTING POLICIES:

(a) Property, Plant and Equipment & Depreciation (i) Recognition and Measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. The cost of an item of property, plant and equipment comprises:

- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.

- borrowing cost and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

- the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognised in the Statement of Profit and Loss. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of Profit and Loss. Cost of Items of Property, plant and equipment not ready for intended use as on the balance sheet date, is disclosed as capital work in progress. Advances given towards acquisition of property, plant and equipment outstanding at each balance sheet date are disclosed as Capital Advance under Other non-current assets

(ii) Subsequent Expenditure

Subsequent expenditure relating to PPE is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

(b) Intangible Assets

i. Recognition and Measurement

Intangible assets comprising of Computer Software are stated at acquisition cost, including any cost attributable for bringing the asset to its working condition, less accumulated amortization and impairment losses, if any. Technology support cost and annual maintenance cost for such software is charged annually to the Statement of Profit and Loss.

ii. Subsequent Expenditure

Other Intangible assets are recognized where it is probable that future economic benefit attributable to the assets will flow to the company and its cost can be reliably measured.

Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life.

Depreciation on property, plant and equipment is provided, using the Written down Value method (WDV), pro-rata to the year of use of assets, at the rates specified in Schedule II of the Companies Act, 2013 with exception the following:

- In case of assets, falling under the block of Building, constructed on rental premises, depreciation is provided either on the basis of useful life of the assets as estimated by the management or rental period whichever is lower.

- Assets costing Rs. 10,000 or less are fully depreciated in the year of purchase.

Intangible assets are amortised over the economic useful life estimated by the management. Intangible assets being the computer software is amortised over a period of three years.

The managementâs estimated useful life/ useful life as per schedule II whichever is lower for the various tangible assets are as follows;

Assets	Estimated useful life (Years)
Buildings	30 Years
Plant & Equipments	10 - 15 Years
Furniture and Fixtures	10 Years
Vehicles	8 - 10 Years
Office equipment	5 Years
Computers	3 Years
Electrical Installation	10 Years
Leasehold land	Period of Lease
Leasehold improvements	Lower of ; useful life of assets or period of lease

(d) Impairment

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

The following intangible assets are tested for impairment each financial year even if there is no indication that the asset is impaired:

(a) an intangible asset that is not yet available for use; and

(b) an intangible asset that is amortised over a period exceeding ten years from the date when the asset is available for use.

If the carrying amount of the assets exceeds the estimated recoverable amount, impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets, such reversal is not recognised.

(e) Foreign Currency Transactions

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of the transaction. All assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates.

Realized gain or loss resulting from the settlement/translation of such transactions of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

(f) Financial Instruments

i. Recognition initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii. Financial Assets

Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Initial recognition and measurement

All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.

b) Trade receivables.

The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

iii. Financial Liabilities

Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, shall be subsequently measured at fair value

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, 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 Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Effective interest method

The company uses effective interest rate, determined using the effective interest method, for calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period.

Effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability. For calculating the effective interest rate, an entity shall estimate the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but shall not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.

(g) Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to their present location and condition, and other levies, transit insurance and receiving charges.

Net realizable value is the estimated selling price in ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(h) Revenue recognition

Revenue from sales of products are recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized upon transfer of control of promised products or services to customers/patients in an amount that reflects the consideration we expect to receive in exchange for those products or services. Sales and Service Income exclude Goods and Service Tax (GST) and are net of trade / volume discounts, where applicable.

Export benefits available under prevalent schemes are accrued in the year in which the goods are exported and no significant uncertainty exist regarding its ultimate collection.

Interest income is recognised with reference to the Effective Interest Rate method.

(i) Employee benefits

Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined benefit plans

The Companyâs net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method.

Remeasurement of the net defined benefit liability, which comprise of actuarial gains and losses are recognised immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognised in Statement of Profit and Loss.

Other long-term employee benefits

The Companyâs net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value.

Actuarial gains and losses are recognised in other comprehensive income (OCI) in the period in which they arise.

(j) Leases

The Company has applied Ind AS 116 and at the commencement of the lease contract recognised a Right-of-Use (RoU) asset at cost and corresponding lease liability, except for leases with a term of twelve months or less (short-term leases) and leases for which the underlying asset is of low value (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.

The cost of the right-of-use assets comprises the amount of the initial measurement of the lease liability, adjusted for any lease payments made at or prior to the commencement date of the lease, any initial direct costs incurred by the Company, any lease incentives received and expected costs for obligations to dismantle and remove right-of-use assets when they are no longer used.

Subsequently, the right-of-use assets is measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease over the shorter of the end of the lease term or useful life of the right-of-use asset.

Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not be recoverable using cash flow projections for the useful life.

For lease liabilities at commencement date, the Company measures the lease liability at the present value of the future lease payments as from the commencement date of the lease to end of the lease term. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the Company''s incremental borrowing rate for the asset subject to the lease in the respective markets.

Subsequently, the Company measures the lease liability by adjusting carrying amount to reflect interest on the lease liability and lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a change to the lease terms or expected payments under the lease, or a modification that is not accounted for as a separate lease

The portion of the lease payments attributable to the repayment of lease liabilities is recognized in cash flows used in financing activities, and the portion attributable to the payment of interest is included in cash flows from operating activities. Further, Shortterm lease payments, payments for leases for which the underlying asset is of low-value and variable lease payments not included in the measurement of the lease liability is also included in cash flows from operating activities.

(k) Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

(l) Income tax

Income tax expense represents current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to items recognised directly in equity or in OCI.

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. It is measured using tax rates enacted or substantively enacted at the reporting date.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; and

b) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

Current and deferred tax for the year are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

(m) Borrowing Costs

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate applicable to the respective borrowing. Borrowing costs include interest costs measured at the Effective Interest Rate.

Borrowing costs, allocated to qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

All other borrowing costs are recognised as an expense in the period which they are incurred.

(n) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the 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.

Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for

(1) possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(2) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognised in the Financial Statements.

(o) Earnings Per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares.

(p) Cash and cash equivalents:

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank including fixed deposits (having original maturity of less than 3 months), cheques in hand and cash in hand.

(q) Exceptional items:

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items is disclosed separately as Exceptional items.

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