1. Corporate information

The company is a public limited company incorporated under Companies Act, 1956 and domiciled in
India bearing CIN: L24230TG1988PLC009102 having registered office at Sy. No. 115, Brig Sayeed
Road, Hanumanji Colony, Bowenpally, Picket, Hyderabad, Secunderabad, Telangana, India, 500009.
Its shares are listed on the BSE Limited. The Company is engaged in the business of pharmaceutical
products, drug intermediaries and API’s

2. Implementation of Ind As

All applicable Ind AS have been applied consistently and retrospectively wherever required. The
resulting difference between the carrying amounts of the assets and liabilities in the standalone
financial statements under both Ind AS and Indian GAAP as of the transition date have been recognized
directly in equity at the transition date.

3. Basis of Preparation and Significant Accounting policies

3.1 (a) Basis of preparation of financial statements and measurement.

The standalone financial statement has been prepared in accordance with Indian Accounting
Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and
Companies (Indian Accounting Standards) Amendment Rules, 2016 and other relevant provisions of
the Act.

These financial statements have been prepared to comply in all material respects with the Accounting
Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956/2013 read together with paragraph 7 of the Companies
(Accounts) Rules, 2014 (Indian GAAP). The financial statements have been prepared under the
historical cost convention on an accrual basis and going concern basis. The accounting policies that
have been consistently applied by the company are consistent with thoseused in the previous year.

(b) Functional and Presentation Currency

The Financial Statements are prepared in Indian Rupees (“INR”) which is the Company’s Functional
Currency for its Operations. All Financial Information presented in INR has been rounded to the
nearest ‘lakhs’ with two decimal places, unless stated otherwise.

3.2 Use of estimates

The preparation of Financial Statements in conformity with the Ind AS requires the Management
to make estimates, judgements, and assumptions that affect the reported amounts of revenue,
expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting
period.

Although these estimates are based on the management’s best knowledge of current events and
actions, uncertainty about these assumptions and estimates could result in the outcome requiring a
material adjustment to the carrying amounts of assets or liabilities in future periods.

3.3 Significant Accounting Policies
(a) Revenue Recognition

i. Revenue is recognized when the significant risks and rewards of ownership have been
transferred to the customers. Revenue is measured net of returns, trade discounts and volume
rebates. The timing of the transfer of risks and rewards varies depending on the individual
terms of the sales agreement.

ii. Revenues from contracts priced on a time and material basis are recognized when services
are rendered and related costs are incurred.

iii. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are
recognised over the life of the contract using the proportionate completion method, with
contract costs determining the degree of completion. Foreseeable losses on such contracts are

recognised when probable.

iv. Revenues from maintenance contracts are recognised pro-rata over the period of the contract.

v. Revenue from sale of goods will be recognized when the delivery of goods has happened, and
ownership is transferred to buyer.

vi. Interest income is recognized on the accrual basis using transactional interest rates.

(b) Property, Plant and Equipment (PPE)

i. All fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

ii. Recognition and measurement: Normally Property, plant and equipment are measured at
cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures
directly attributable to the acquisition of the asset. The Company has elected to apply the
optional exemption to use this previous GAAP value as deemed cost on 1 April 2017, the date of
transition.

iii. Depreciation has been provided on WDV method based on life assigned to each asset in
accordance with Schedule II of the Companies Act 2013.

iv. Depreciation on additions to fixed assets has been calculated on pro-rata basis from the dateof
addition.

v. No depreciation has been provided on the fully depreciated assets.

(c) Borrowing cost

Borrowing costs attributable to the acquisition/construction of qualifying assets are capitalized and
form part of the cost of the qualifying assets. A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended use. All other borrowing costs are charged to
revenue as an expense.

(d) Income Tax

Current Tax is determined as the amount of tax payable in respect of taxable income for the period.
Deferred Tax is recognized, on timing differences, being the difference between taxable Income and
accounting Income that originates in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax assets are recognized subject to the considerationof prudence.
The tax rates and laws that have been enacted or substantively enacted as of the balance sheet date
are applied.

(e) Inventories

Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if
any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including
manufacturing overheads incurred in bringing them to their respective present location and
condition. Cost of raw materials, work-in- progress, packing materials, trading and other products are
determined on first-in-first-out basis.

(f) Deferred Revenue Expenditure

Expenditure incurred on advertisement and other expenses for promotion of new products and
recruitment of key personnel is amortized over a period of five years, having due regard to the nature
of expenses and the benefit that may be derived there from. Expenditure on routine product
advertisement and personnel recruitment is expensed off to profit & loss account in the year in which
it is incurred.

(g) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand
and short-term deposits with banks with an original maturity of three months or less.

(h) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing activities of the Company are
segregated.

(i) Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost. Gains and losses are recognised in profit and loss when the liabilities are
derecognized. This category generally applies to interest-bearing loans and borrowings.

(j) Foreign currency transactions

Transactions arising in foreign currency during the year are recorded at average rates closely
approximating those ruling at the transaction dates. Current Assets and Current Liabilities,
denominated in foreign currency, are translated at the exchange rate prevalent at the date ofthe
Balance Sheet. Exchange differences arising on foreign currency transactions/translations are
recognized as income or expense in the Profit & Loss Account, except those relating to the acquisition
of fixed assets, which are adjusted against the cost of the assets.

(k) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased item, are classified as operating leases. Operating lease payments are recognized as an
expense in the Statement of Profit and Loss on a Straight - line basis over the lease term.

(l) Employee benefits

All Employee Benefits payable for rendering the service such as Salaries, Wages etc. and the expected
cost of ex-gratia are recognised in the period in which the employee renders the related service. A
Liability is recognised for the amount expected to be paid when there is 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.