Notes to Accounts of Vineet Laboratories Ltd.

Mar 31, 2025

2.8 Provisions, contingent liabilities and contingent assets
Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Expected future operating losses are not provided for.

If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to liability.

Where discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost.

Contingent liabilities and contingent assets

A disclosure for contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. Where there is a
possible obligation or a present obligation in respect of which the likelihood of an outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements. However, contingent assets
are assessed continually and if it is virtually certain that an inflow of economic benefits will arise,
the asset and related income are recognized in the period in which the change occurs.

Onerous contracts

A provision for onerous contracts is recognised in the statement of profit and loss when the
expected benefits to be derived by the Company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at
the present value of the lower of the expected cost of terminating the contract and the
expected net cost of continuing with the contract. Before a provision is established, the
Company recognises any impairment loss on the assets associated with that contract.

Reimbursement rights

Expected reimbursements for expenditures required to settle a provision are recognised in the
statement of profit and loss only when receipt of such reimbursements is virtually certain. Such
reimbursements are recognised as a separate asset in the balance sheet, with corresponding
credit to the specific expense for which the provision has been made.

2.9 Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services is
transferred to the customer at an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods or services.

For contracts that permit the customer to return an item, revenue is recognised to the extent that
it is highly probable that a significant reversal in the amount of cumulative revenue recognised
will not occur.

Therefore, the amount of revenue recognised is adjusted for expected returns, which are
estimated based on the historical data. In these circumstances, a refund liability and a right to
recover returned goods are recognised.

Revenue from the sale of goods is measured at the transaction price which is consideration
received or receivable, net of returns, Goods and Service Tax (GST) and applicable trade
discounts, allowances and chargeback. Revenue includes shipping and handling costs billed to
the customer.

Services Income

Revenue is measured based on the consideration specified in a contract with a customer.
Revenue is recognised at a point in time when the Company satisfies performance obligations
by transferring the promised services to its customers.

2.10 Interest Income

Interest Income mainly comprises of interest on Margin money deposit with banks relating to
bank guarantee and term deposits.

Interest income or expense is recognised using the effective interest method (EIR).

Interest is recognized using the time-proportion method, based on rates implicit in the transactions.

2.11 Tax Expenses

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to
the extent that it relates to a business combination, or items recognised directly in equity or in
Other comprehensive income.

The Company has determined that interest and penalties related to income taxes, including
uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for
them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting date. Current income tax
relating to items recognised outside the statement of profit and loss is recognised outside the
statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction).
Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions, where
appropriate.

Deferred tax

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

Deferred tax liabilities and assets are recognized for all taxable temporary differences and
deductible temporary differences.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be
available against the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized.

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the statement of profit and loss is recognised
outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying
transaction).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as
current tax for the year. The deferred tax asset is recognised for MAT credit available only to the
extent that it is probable that the Company will pay normal income tax during the specified year,
i.e., the year for which MAT credit is allowed to be carried forward. In the year in which the
Company recognizes MAT credit as an asset, it is created by way of credit to the statement of
profit and loss and shown as part of deferred tax asset. The Company reviews the “MAT credit
entitlement” asset at each reporting date and writes down the asset to the extent that it is no
longer probable that it will pay normal tax during the specified period.

Goods and Service Tax (GST) paid on acquisition of assets or on incurring expenses
When the tax incurred on purchase of assets or services is not recoverable from the taxation
authority, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the
expense item, as applicable. Otherwise, expenses and assets are recognized net of the amount
of taxes paid. The net amount of tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheet.

2.12 Earnings Per Share
Basic earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable
to equity shareholders (after deducting preference dividends and attributable taxes) by the
weighted average number of equity shares outstanding during the year.

The weighted average number of equity shares outstanding during the year is adjusted for events
such as bonus issue, bonus element in a rights issue, share split, and reverse share split
(consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of
basic earnings per share) after considering the effect of interest and other financing costs or
income (net of attributable taxes) associated with dilutive potential equity shares by the weighted
average number of equity shares considered for deriving basic earnings per share adjusted for
the weighted average number of equity shares that would have been issued upon conversion of
all dilutive potential equity shares.

2.13 Segment reporting

The Company is engaged in the " manufacture of Drug Intermediates & Bulk Dugs " and the
same constitutes a single reportable business segment as per Ind AS 108.And hence segment
reporting specified as per IND AS 108 is not applicable.

2.14 Share capital

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction
from equity. Income tax relating to transaction costs of an equity transaction is accounted for in
accordance with Ind AS 12.

2.15 Determination of fair values

The Company''s accounting policies and disclosures require the determination of fair value, for
certain financial and non-financial assets and liabilities. Fair values have been determined for

measurement and/or disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability. A fair value measurement of a non-financial asset takes
into account a market participants ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its
highest and best use.

Property, plant and equipment

Property, plant and equipment, if acquired in a business combination or through an exchange of
non-monetary assets, is measured at fair value on the acquisition date. For this purpose, fair
value is based on appraised market values and replacement cost.

Inventories

The fair value of inventories acquired in a business combination is determined based on its
estimated selling price in the ordinary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort required to complete and sell the
inventories.

Investments in equity and debt securities and units of mutual funds

The fair value of marketable equity and debt securities is determined by reference to their quoted
market price at the reporting date. For debt securities where quoted market prices are not
available, fair value is determined using pricing techniques such as discounted cash flow
analysis. In respect of investments in mutual funds, the fair values represent net asset value as
stated by the issuers of these mutual fund units in the published statements. Net asset values
represent the price at which the issuer will issue further units in the mutual fund and the price at
which issuers will redeem such units from the investors. Accordingly, such net asset values are
analogous to fair market value with respect to these investments, as transactions of these mutual
funds are carried out at such prices between investors and the issuers of these units of mutual
funds.

2.16 New standards adopted by the company

Ind AS 1 - Presentation of financial information

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

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 does not expect this amendment to have any significant
impact in 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 Restated financial information 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.

2.17 New Accounting pronouncements

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.
For the year ended March 31,2025, MCA has not notified any new standards or amendments to
the existing standards applicable to the Company.

---

Mar 31, 2024

2.8 Provisions, contingent liabilities and contingent assets
Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Expected future operating losses are not provided for.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
liability.

Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities and contingent assets

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but

probably will not, require an outflow of resources. Where there is a possible obligation or a presentobligation in respect of
which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually
and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the
period in which the change occurs.

Onerous contracts

A provision for onerous contracts is recognised in the statement of profit and loss when the expected benefits to be
derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the
contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises
any impairment loss on the assets associated with that contract.

Reimbursement rights

Expected reimbursements for expenditures required to settle a provision are recognised in the statement of profit and
loss only when receipt of such reimbursements is virtually certain. Such reimbursements are recognised as a separate
asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.

2.9 Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those goods or services.

For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly probable that
a significant reversal in the amount of cumulative revenue recognised will not occur.

Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the
historical data. In these circumstances, a refund liability and a right to recover returned goods asset are recognised.

Revenue from the sale of goods is measured at the transaction price which is consideration received or receivable, net of
returns, Goods and Service Tax (GST) and applicable trade discounts, allowances and chargeback. Revenue includes
shipping and handling costs billed to the customer.

Services Income

Revenue is measured based on the consideration specified in a contract with a customer. Revenue is recognised at a
point in time when the Company satisfies performance obligations by transferring the promised services to its customers.

2.10 Interest Income

Interest Income mainly comprises of interest on Margin money deposit with banks relating to bank guarantee and term
deposits.

Interest income or expense is recognised using the effective interest method (EIR).

Interest is recognized using the time-proportion method, based on rates implicit in the transactions.

2.11 Tax Expenses

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates
to a business combination, or items recognised directly in equity or in Other comprehensive income.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatments, do

not meet the definition of income taxes, and therefore accounted for them under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date. Current income tax relating to items recognised outside the statement of profit and loss is
recognised outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction).
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions, where appropriate.

Deferred tax

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

Deferred tax liabilities and assets are recognized for all taxable temporary differences and deductible temporary
differences.

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

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.

Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of
profit and loss (either in OCI or in equity in correlation to the underlying transaction).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The
deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the Company will pay
normal income tax during the specified year, i.e., the year for which MAT credit is allowed to be carried forward. In the year
in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss
and shown as part of deferred tax asset. The Company reviews the "MAT credit entitlement" asset at each reporting date
and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.

Goods and Service Tax (GST) paid on acquisition of assets or on incurring expenses

When the tax incurred on purchase of assets or services is not recoverable from the taxation authority, the tax paid is
recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable. Otherwise,
expenses and assets are recognized net of the amount of taxes paid. The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.12 Earnings Per Share
Basic earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders
(after deducting preference dividends and attributable taxes) by the weighted average number of equity shares
outstanding during the year.

The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the
number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share)
after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with
dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings
per share adjusted for the weighted average number of equity shares that would have been issued upon conversion of all
dilutive potential equity shares.

2.13 Segment reporting

The Company is engaged in the in " manufacture of Drug Intermediates & Bulk Dugs " and the same constitutes a single
reportable business segment as per Ind AS 108.And hence segment reporting specified as per IND AS 108 is not applicable.

2.14 Share capital

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction from equity. Income
tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

2.15 Determination of fair values

The Company''s accounting policies and disclosures require the determination of fair value, for certain financial and non¬
financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on
the following methods. When applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability. A fair value measurement of a non-financial asset takes into
account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.

Property, plant and equipment

Property, plant and equipment, if acquired in a business combination or through an exchange of non-monetary assets, is
measured at fair value on the acquisition date. For this purpose, fair value is based on appraised market values and
replacement cost.

Inventories

The fair value of inventories acquired in a business combination is determined based on its estimated selling price in the
ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on
the effort required to complete and sell the inventories.

Investments in equity and debt securities and units of mutual funds

The fair value of marketable equity and debt securities is determined by reference to their quoted market price at the
reporting date. For debt securities where quoted market prices are not available, fair value is determined using pricing
techniques such as discounted cash flow analysis. In respect of investments in mutual funds, the fair values represent net
asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent
the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such
units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to these
investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of
these units of mutual funds.

2.16 New standards adopted by the company
Ind AS 1 - Presentation of financial information

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

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 does not expect this amendment to have any significant impact in
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 Restated financial information 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.

2.17 New Accounting pronouncements

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. For the year ended March 31, 2024, MCA has not notified
any new standards or amendments to the existing standards applicable to the Company.

This is the notes to financial statements referred to in our report of even date.

for NSVR & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants Vineet Laboratories Limited

Firm Regn No:008801S/S200060

V Gangadhara Rao N G. Venkata Ramana B. Satyanarayana Raju

Partner Managing Director Whole-Time Director & CFO

Membership Number: 219486 DIN: 00031873 DIN: 02697880

UDIN: 24219486BKFBAV7725

Place: Hyderabad Ramesh Kumar Bandari

Date: 29 May 2024 Company Secretary

M.No:A24519

---

Mar 31, 2023

2.11 Provisions, contingent liabilities and contingent assets Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Expected future operating losses are not provided for.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities and contingent assets

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.

Onerous contracts

A provision for onerous contracts is recognised in the statement of profit and loss when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

Reimbursement rights

Expected reimbursements for expenditures required to settle a provision are recognised in the statement of profit and loss only when receipt of such reimbursements is virtually certain. Such reimbursements are recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.

2.12 Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur.

Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the historical data. In these circumstances, a refund liability and a right to recover returned goods asset are recognised.

2.13 Interest Income

Interest Income mainly comprises of interest on Margin money deposit with banks relating to bank guarantee and term deposits.

Interest income or expense is recognised using the effective interest method (EIR). Interest is recognized using the time-proportion method, based on rates implicit in the transactions.

2.14 Borrowing Costs

Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

2.15 Tax Expenses

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in Other comprehensive income.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate.

Deferred tax

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

Deferred tax liabilities and assets are recognized for all taxable temporary differences and deductible temporary differences.

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

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss (either in OCI or in equity in correlation to the underlying transaction).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the Company will pay normal income tax during the specified year, i.e., the year for which MAT credit is allowed to be carried forward. In

the year in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.

Goods and Service Tax (GST) paid on acquisition of assets or on incurring expenses

When the tax incurred on purchase of assets or services is not recoverable from the taxation authority, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable. Otherwise, expenses and assets are recognized net of the amount of taxes paid. The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.16 Earnings Per Share Basic earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year.

The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share) after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share adjusted for the weighted average number of equity shares that would have been issued upon conversion of all dilutive potential equity shares.

2.17 Segment reporting

The Company is engaged in the in " manufacture of Drug Intermediates & Bulk Dugs" and the same constitutes a single reportable business segment as per Ind AS 108.

2.18 Share capital

Incremental costs directly attributable to the issue of equity shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

2.19 Significant accounting judgements, estimates, and assumption

The preparation of the financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experiences and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

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 and in any future periods affected. In particular, the areas involving critical estimates or Judgment are:

Property, plant and equipment

The depreciation of property, plant and equipment is derived on determining an estimate

of an asset''s expected useful life and the expected residual value at the end of its life. The residual values of Company''s assets are determined by management at the time of acquisition of asset and is reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life.

Impairment of financial and non-financial assets

Significant management judgement is required to determine the amounts of impairment loss on the financial and nonfinancial assets. The calculations of impairment loss are sensitive to underlying assumptions.

Tax provisions and contingencies

Significant management judgement is required to determine the amounts of tax provisions and contingencies. Deferred tax assets are recognised for unused tax losses and MAT credit entitlements to the extent it is probable that taxable profit will be available against which these losses and credit entitlements can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Defined benefit plans

The cost of the defined benefit plan and the present value of the obligation are determined using actuarial valuation. An actuarial valuation involves various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using internal valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

2.20 New standards adopted by the company

Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Costs of Fulfilling a Contract

The amendments specify that that the ''cost of fulfilling'' a contract comprises the ''costs that relate directly to the contract. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts.

This amendment is essentially clarification and had there is no significant impact on the financial statements.

Amendments to Ind AS 16- Property, Plant and Equipment: Proceeds before Intended Use

The amendments modified paragraph 17(e) of Ind AS 16 to clarify that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment.

The amendments are effective for annual reporting periods beginning on or after 1 April 2022. These amendments had no impact on the financial statements.

Amendments to Ind AS 103, Business Combinations: Reference to the Conceptual Framework

This amendment added an exception to the recognition principle of Ind AS 103 Business Combinations to avoid the issue of potential ''day 2'' gains or losses arising for liabilities and contingent liabilities that would be within the scope of Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets or Appendix C, Levies, of Ind AS 37, if incurred separately. The exception requires entities to apply the criteria in Ind AS 37 or Appendix C, Levies, of Ind AS 37, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date.

In accordance with the transitional provisions, the company applies the amendments prospectively, i.e., to business combinations occurring after the beginning of the annual reporting period in which it first applies the amendments (the date of initial application). These amendments had no impact on the financial statements of the company as there were no transactions within the scope of these amendments that arose during the period.

2.21 New Accounting pronouncements

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. 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 01,2023, 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 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 does not expect this amendment to have any significant impact in 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.

35. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances, security deposits and derivatives that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s risk management is carried out by a treasury department under policies approved by the Board of Directors. The Board of Directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and trade payables.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. The Company’s exposure to credit risk arises majorly from trade and other receivables. Other financial assets like security deposits and bank deposits are mostly with government authorities and scheduled banks and hence, the Company does not expect any credit risk with respect to these financial assets.

Trade and other 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.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-

c) Liquidity risk

The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The table below summarises the maturity profile of the Company’s financial liabilities on undiscounted basis:

Reasons:

1. Decrease in net profit before interest and also increase in debt for the current year.

2. Decrease in net profit after tax for the current year as compared to last year.

3. Increase in purchases and decrease in trade payables for the current year.

4. Increase in net working capital turnover as compared to last year.

5. Decrease in net profits as compared to last year.

6. Decrease in profit after tax and before interest.

38. Other statutory information

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

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

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

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

5. 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.

6. 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 Company shall

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

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

7. The Company has not entered in to any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

8. The Company has not been declared as willful defaulter by any bank or financial institution or other lender.

9. No Scheme ofArrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, during the year.

10. The Company has borrowings from banks against security of its current assets. The reports or statements of Current assets filed by the company with banks are in agreement with the books of accounts.

39. Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, convertible preference shares, securities premium and all other equity reserves attributable to the equity holders of the parent. 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. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations.

40. Previous period/year figures have been regrouped/re-classified wherever necessary, to conform to current period’s classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013.

As per our report of even date attached for and on behalf of the Board of Directors

for NSVR & Associates LLP Vineet Laboratories Limited

Chartered Accountants

Firm Regn No:008801S/S200060

V Gangadhara Rao N G. Venkata Ramana B. Satyanarayana Raju

Partner Managing Director Whole-time Director & CFO

Membership No: 219486 DIN: 00031873 DIN: 02697880

UDIN: 23219486BGQCWA3303

Place: Hyderabad Nirosha Ravikanti

Date: 29 May 2023 Company Secretary