ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Sudarshan Pharma Industries Ltd.

3 Material accounting policies

(a) Foreign currency transactions
Functional and presentation currency
Transactions and balances

The functional currency of the Company is Indian rupee.

Transactions in foreign currencies are translated into the functional currency of the Company, at the exchange
rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the
date of the transaction. Foreign exchange gain and losses from settlement of these transactions are recognised
in the statement of profit and loss.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate as at the reporting date.Exchange differences arising on translation are recognised in the
statement of profit or loss.

(b) Financial instruments

A financial instrument is any contract that gives riseto a financial asset in one entity and a financial liability or
equity instrument in another entity.

(I) Financial Assets

(i) Initial recognition and measurement

All financial assets other than trade receivables are initially recognised at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets, which are not at fair value
through profit and loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial
assets are recognised using trade date accounting.

(ii) Subsequent measurement

a) Financial assets carried at Amortized cost (AC)

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

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

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

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

A financial asset which is not classified in any of the above categories are measured at FVTPL.
(iiI) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries at cost less impairment loss, if any,
except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105,
non current assets held for sale and discontinued operations when they are classified as held for sale

(iv) Other Equity and Mutual Fund Investments

All other equity and mutual fund investments are measured at fair value, with value changes recognised
in the Statement of Profit and Loss, except for those equity investments for which the Company has
elected an irrevocable option to present the value changes in ''Other Comprehensive Income''.

I n accordance with Ind AS 109, the company applies the expected credit loss model for evaluating
impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

- The twelve months expected credit losses (expected credit losses that result from those default
events on the financial instrument that are possible with twelve months after the reporting date);
or

- Full lifetime expected credit losses (expected credit losses that result from all possible default
events over the life of the financial instrument)

For trade Receivables Company applies ''simplified approach'' which requires expected lifetime losses
to be recognises from initial recognition of the receivables. The Company uses historical default rates to
determine impairment loss on the portfolio of trade receivables. The Company will adjust the historical
credit loss experience with forward-looking information. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are considered.

For other assets, the Company uses twelvemonths Expected Credit Loss model (ECL) to provide for
impairment loss where there is no significant increase in credit risk. If there is significant increase in
credit risk full lifetime ECL is used.

(II) Financial Liabilities

(i) Initial recognition and measurement

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

(ii) Subsequent measurement

a) Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities
held for trading are recognised in the Statement of Profit and Loss.

Financial guarantee contracts issued by the Company are those contracts that require a payment
to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make
a payment when due in accordance with the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the
higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109
and the amount recognised less cumulative Amortization. Amortization is recognised as finance
income in the Statement of Profit and Loss.

For trade and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short term maturity of these instruments.

b) Financial liabilities at Amortized cost

After initial recognition, interest bearing loans are subsequently measured at Amortized cost using
the effective interest rate method.

Where the terms of a financial liability are re-negotiated and the Company issues equity
instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain
or loss is recognised in the Statement of Profit and Loss; measured as a difference between the
carrying amount of the financial liability and the fair value of equity instrument issued.

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.

(c) Property, plant and equipment (including capital-work-in progress)

(i) Recognition and measurement

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is
probable that future economic benefits associated with the item will flow to the Company and the cost of
the item can be measured reliably.

I tems of property, plant and equipment (including capital-work-in progress) are measured at cost, which
includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses.
Freehold land is carried at historical cost less any accumulated and impairment losses. Cost of an item of
property, plant and equipment comprises:

a. Purchase price, including import duties and non-refundable taxes on purchase (goods and service tax),
after deducting trade discounts and rebates.

b. Any directly attributable cost of bringing the item to its working condition for its intended use,
estimated costs of dismantling and removing the item and restoring the site on which it is located.

Any gain/ loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

(ii) Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property,
plant and equipment recognised as at April 1, 2024, measured as per the previous GAAP, and use that
carrying value as the deemed cost of such property, plant and equipment (see Note 43).

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated
with the expenditure will flow to the Company and the cost of the item can be measured reliably.

(iv) Depreciation

Depreciation is calculated on the cost of items of property, plant and equipment less their estimated
residual values over the estimated useful lives using the straight-line method and is generally recognised in
the Statement of profit and loss.

Depreciation on Property, plant and equipment has been provided on a straight-line basis as per the useful
life prescribed in Schedule II to the Companies Act, 2013.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted
if necessary, for each reporting period. Based on technical assessment and consequent advice, the
management believes that its estimate of useful life as given above best represent the period over which
management expects to use the asset.

On property, plant and equipment added/ disposed off during the year, depreciation is charged on pro-rata
basis for the period from/up to which the asset is ready for use/disposed off.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are
disclosed as "Capital work-in-progress”. Capital work in progress is stated at cost, net of accumulated
impairment loss, if any.

(d) Intangible assets

Intangible assets acquired separately

(i) Recognition and measurement

I ntangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses. The cost of an intangible asset comprises its purchase
price, including any import duties and other taxes (other than those subsequently recoverable from the
taxing authorities). Amortisation is calculated on a straight-line basis over their estimated useful lives and
it is included in the statement of profit and loss. The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.

(ii) Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible
assets recognised as at April 1, 2024, measured as per the previous GAAP, and use that carrying value as
the deemed cost of such intangible assets.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, is recognised in profit or loss as incurred

(iv) Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over
their estimated useful lives using the straight-line method, and is included in Depreciation and amortisation
expense in the Statement of Profit and Loss.

(v) Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use
or disposal. Gains or losses arising from derecognition of an intangible assets, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss
when the asset is derecognised.

(e) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries at cost less impairment loss, if any, except where
investments accounted for at cost shall be accounted for in accordance with Ind AS 105, non-current assets held
for sale and discontinued operations when they are classified as held for sale.

(f) Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity
shareholders,this is when declared by the directors. In the case of final dividends, this is when approved by the
shareholders at the annual general meeting.

(g) Investment properties

Investment properties comprises completed property (land or a building or part of a building or both) and
property under development or redevelopment that is held, or to be held, to earn rentals or for capital appreciation
or both. Property held under a lease is classified as investment property when it is held to earn rentals or for
capital appreciation or both. It does not include property held for use in the production or supply of goods or
services or for administrative purposes, nor it includes property held for sale in the ordinary course of business.

The compay depreciates the building over useful life prescribed in Schedule II to the Companies Act, 2013. The
management believes that these estimated useful lives are realistic and reflect fair approximation of the period
over which the assets are likely to be used.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

Though the company measures investment properties using cost based measurement, the fair value of
investment property is disclosed in the notes.

Fair values are determined based on an annual evaluation performed by an accredited external independent
valuer applying a valuation model recommended by the International Valuation Standards Committee.

Investment properties are derecognised either when they have been disposed off or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference between
the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of
derecognition. In determining the amount of consideration from the derecognition of investment properties, the
company considers the effects of variable consideration, existence of a significant financing component, non¬
cash consideration, and consideration payable to the buyer (if any).

(h) Inventories

Inventories of raw materials and components, work-in-progress, stores & spares, packing materials and finished
goods are valued at the lower of cost and net realizable value. Cost is ascertained on a FIFO basis. Costs
incurred in bringing each product to its present location and condition are accounted for as follows:

(i) Raw materials and Packing materials

Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition. Cost is determined on FIFO basis

(ii) Work-in-progress and finished goods

Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on
the normal operating capacity. Cost is determined on FIFO basis.

The Net realizable value is estimated selling price in the ordinary course of business less the estimated costs
of Completion and estimated cost necessary to make the finished goods/product ready for sale.

(i) Impairment

(i) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected
cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the
impairment calculation, based on Company''s past history, existing market conditions as well as forward
looking estimates at the end of each reporting period.

(ii) Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is any indication that the carrying amount
of non financial asset may not be recoverable. If any such indication exists, or when annual impairment
testing for an asset is required, the recoverable amount, (i.e. higher of the fair value less cost to sell and the
value-inuse) is determined on an individual asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In such cases, the recoverable amount is determined for
the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU)
is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to
its recoverable amount. An impairment loss is recognized in the statement of profit or loss. The Company
bases its impairment calculation on budgets and forecast calculations.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs of disposal, an appropriate valuation model is used.

(j) Employee benefits

(i) Short-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, and bonus in
the period the related service is rendered at the undiscounted amount of the benefits expected to be paid
in exchange for that service. Liabilities recognised in respect of current employee benefits are measured
at the undiscounted amount of the benefits expected to be paid in exchange for the related service. All
employee benefits payable wholly within twelve months of rendering the service are classified as current
employee benefits and recognised in the period in which the employee renders the related service.

(ii) Other long-term employee benefit obligations

The employees can carry-forward a portion of the unutilised accrued compensated absences and utilise it in
future service periods or receive cash compensation on termination of employment. Since the compensated
absences do not fall due wholly within twelve months after the end of the period in which the employees
render the related service and are also not expected to be utilised wholly within twelve months after the
end of such period, the benefit is classified as a long-term employee benefit. The Company records an
obligation for such compensated absences in the period in which the employee renders the services that
increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using
the projected unit credit method.

(iii) Defined contribution plans

A defined contribution plan is a post-employment benefit plan where the Company''s legal or constructive
obligation is limited to the amount that it contributes to a separate legal entity.

The Company makes specified monthly contributions towards Government administered provident fund
scheme.

Obligations for contributions to defined contribution plan are expensed as an employee benefits expense in
the statement of profit and loss in period in which the related service is provided by the employee. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments
is available.

(iv) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The
Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount. Post employment benefit comprise of Gratuity which are accounted for as follows:

Gratuity:

For defined plans in the form of gratuity, the cost of providing benefits is determined using the projected
unit credit method, with actuarial valuations being carried out at the end of each annual reporting period.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance
sheet with a charge or credit recognized in other comprehensive income in the period in which they occur

All expenses represented by current service cost, past service cost, if any, and net interest on the defined
benefit liability (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net
defined benefit liability (asset) comprising actuarial gains and losses and the return on the plan assets
(excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other
Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in
the subsequent periods. The retirement benefit obligation recognized in the Balance Sheet represents the
actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation
is limited to the present value of any economic benefits available in the form of refunds from the plans or
reductions in future contributions to the plans.

Corporate Information

Sudarshan Pharma Industries Limited ("the Company") was incorporate on July 23. 2008 as public limited Company, under the Companies Act. 2013 having CIN: L51496MH2008PLC184997 listed in BSE SME and having its registered office at 301. Aura Biplex, Premium Retail Premises, 7. S. V. Road. Borivali (West), Mumbai - 400 092 The Company is engaged in manufacturing having plant for API and doing job work manufacturing in Pharmaceuticals Items and traders in Chemicals and Solvents in India. The Company operates in the State of Maharashtra. Gujarat. Uttarakhand and Haryana.

Statement__of.

a. Bjasis of Preparatip_n_o_f_Fj_nanciaLStatements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act. 2013 (''the Act'') read with Rule 7 of the Companies (Accounts) Rules. 2014. the provisions of the Act.

b. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

c Accounting .Con.ve nt ion

The Company follows the mercantile system of accounting, recognizing income and expenditure on accrual basis. The accounts are prepared on historical cost basis and as a going concern. Accounting policies not referred to specifically otherwise, are consistent with the generally accepted accounting principles. All the amounts disclosed in the financial statements and notes are presented in Indian rupees have been rounded off to the nearest lakhs as per the requirement of Schedule III to the Act. unless otherwise stated. The amount ’0.00’ denotes amount less the Rupees Five Hundred.

d Revenue Recognition

Revenue is recognized to the extent that It is probable that the economic benefits will flow to the Company and the revenue can be reliably measured

i Sale of Goods:

Revenue is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer. Sales are disclosed net of GST. trade discounts and returns, as applicable.

ii. Income from Services:

Revenue from services is recognized when services have been rendered and there should be no uncertainty regarding consideration and its ultimate collection, net of discounts to customers excluding taxes or duties collected on behalf of the government.

iii Interest Income :

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

e Property, Plant & Equipments

Property. Plants & Equipment''s are stated at as per Cost Model i.e.. at cost less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalised until the property, plant and equipment are ready for use. as intended by the management. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Input tax credit of GST. Grants on capital goods are accounted for by reducing the cost of Capital Goods. Subsequent expenditures relating to property, plant and equipment are capitalised only when it is probable that future economic benefits

associated with them will flow to the Company and the cost of the expenditure can be measured reliably. Repairs and Maintenance costs are recognised in the Statement of Prof-t and Loss when they are incurred. When assets are disposed or retired, their cost is removed from the financial statements. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year.

Intangible Assets

Intangible assets purchased are initially measured at cost. The cost of an intangible asset comprise its purchase price including any costs directly attributable to making the asset ready for their intended use.

Capita! _Wor_k-l n-Progr_e_ss

Expenses incurred for acquisition of Capital Assets outstanding at each balance sheet date are disclosed under Capital Work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital advances under head long term loans & advances.

f Depreciation

Depreciation on property, plant and equipment, tangible and intangible assets, has been provided under Straight Line method over the useful life of assets estimated by the management which is in line with the terms prescribed in Schedule II to The Companies Act. 2013. Depreciation for assets purchased/sold during the period is proportionately charged. Depreciation method, useful life & residual value are reviewed periodically.

g Employee Benefits

i) Defined contribution plan: The Company’s contributions paid or payable during the year to the provident fund for the employees is recognized as an expense in the Statement of Profit and Loss.

li) Defined Benefit Plan: The Company’s liabilities towards Defined Benefit Schemes viz. Gratuity benefits and compensated absences are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the Balance Sheet date. Actuarial gams and losses are recognized in the statement of Profit and Loss in the period of occurrence of such gains and losses. Sick leaves and casual leaves are not encashable. However, as the same are eligible for carry forward, provision has been made based on Actuarial Valuation report.

h Foreign Currency Transactions

i. Initial Recognition: Foreign currency transaction, are recorded in the reporting Currency, by applying the exchange rate between the reporting currency and the foreign currency at the date of the ransaction.

ii Conversion: Foreign currency monetary items are reported using the closing rate.

iii. Exchange Difference Exchange differences arising on the settlement of monetary items at rates different from those at which they are initially recorded during the year or reported in previous financial statement are recognized as income or as expenses at the end of year by applying closing rate.

i Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to profit and loss account.

j 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 are segregated.

The accounting treatment for the Income Tax in respect of the Company''s income is based on the Accounting Standard on ''Accounting for Taxes on Income* (AS-22). The provision made for Income Tax in Accounts comprises both, the current tax and deferred tax. Provision for Current Tax is made on the assessable Income Tax rate applicable to the relevant assessment year after considering various deductions available under the Income Tax Act, 1961.

Deferred tax is recognized for all timing differences; being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. The carrying amount of deferred tax asset/ liability is reviewed at each Balance Sheet date and consequential adjustments are carried out.

I Investments:

Investment which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as non-current investments.

On initial recognition, ail investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

m Inventories:

Raw Materials have been valued at lower of cost or net realizable value. Cost is determined on FIFO basis. Cost of Finished Goods and semt-finished goods includes all Costs of Purchases. Conversion Cost and other cost Incurred in bringing the inventories to their present location and Condition.The Net realizable value is estimated selling price in the ordinary course of business less the estimated costs of Completion and estimated cost necessary to make :he finished goods/product ready for sale. Inventories have been taken as valued and certified by the Management.

n Provisions, contingent Liabilities and contingent assets:

A provision is recognized if. as a result of a past event, the Company has a present legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the likely future outflow of economic benefits required to settle the obligation at the reporting date.

Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also 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 neither recognized nor disclosed in the financial statements.

o Operating Leases

Lease contracts that do not transfer substantially all the risks and benefits of ownership of the assets to the Company are classified as operating leases Where lease rentals are so structured that the rental outflow is higher in the later periods of lease term, such lease rentals are recognised in the statement of profit and loss on a straight line basis over the lease term. Other operating leases are recognised in the statement of profit and loss as per the terms of the lease contract.

p Segment Reporting

The Company is engaged in manufacturing of API. job work manufacturing in Pharmaceuticals Items and traders in chemicals and solvents. The Company is engaged in the business of Speciality Chemicals only and therefore, there is only one reportable segment. Further, the Company primarily operates in India. Therefore, no further information required to disclose as per “Accounting Standard 17- Segment Reporting".

q Earning Per Share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

In case of bonus issue the weighted average number of equity shares outstanding during the period and for all periods presented should be adjusted for events, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

r Impairment of Assets

An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows. An impairment loss is charged off to profit and loss account as and when asset is identified for impairment. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows.

s Government Grants

Government Grants are recognized when there is reasonable assurance that the Company will comply with rhe conditions attached to them and the grants will be received.

Government grants whose primary conditions that Company should purchase, construct or otherwise acquired capital assets are presented by deducting them from carrying value of assets.

Grants related to the revenue are adjusted against expenses to the extent there is certainty to receive

Corporate Information

Sudarshan Pharma Industries Limited ("the Company") was incorporate on July 23, 2008 as public limited company, under the Companies Act, 2013 having CIN: L51496MH2008PLC184997 listed in BSE SME and having its registered office at 301, Aura Biplex, Premium Retail Premises, 7, S. V Road, Borivali (West), Mumbai - 400 092. The Company is engaged in manufacturing having plant for API and doing jobwork manufacturing in Pharmeceutical Items and traders in Chemicals and Solvents in India. The Company operates in the State of Maharashtra, Gujarat and Uttarakhand.

Statement of Significant Accounting Policies

a. Basis of Preparation of Financial Statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act.

b. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and ssumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent iabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

c Accounting Convention

The company follows the mercantile system of accounting, recognizing income and expenditure on accrual basis. The accounts are prepared on historical cost basis and as a going concern. Accounting policies not referred to specifically otherwise, are consistent with the generally accepted accounting principles. All the amounts disclosed in the financial statements and notes are presented in Indian rupees have been rounded off to the nearest lakhs as per the requirement of Schedule III to the Act, unless otherwise stated. The amount ''0.00'' denotes amount less tha Rupees Five Hundred.

d Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured

i Sale of Goods:

Revenue is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer. Sales are disclosed net of GST, trade discounts and returns, as applicable.

ii. Income from Services:

Revenue from services is recognized when services have been rendered and there should be no uncertainty regarding consideration and its ultimate collection, , net of discounts to customers excluding taxes or duties collected on behalf of the government.

iii Interst Income :

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

e Property, Plant & Equipments

Property, Plants & Equipments are stated at as per Cost Model i.e., at cost less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalised until the property, plant and equipment are ready for use, as intended by the management. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Input tax credit of GST, Grants on capital goods are accounted for by reducing the cost of Capital Goods. Subsequent expenditures relating to property plant and equipment are capitalised only when it is probable that future economic benefits associated with them will flow to the Company and the cost of the expenditure can be measured reliably.

Repairs and Maintenance costs are recognised in the Statement of Profit and Loss when they are incurred. When assets are disposed or retired, their cost is removed from the financial statements. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year.

Intangible Assets

Intangible assets purchased are initially measured at cost. The cost of an intangible asset comprise its purchase price including any costs directly attributable to making the asset ready for their intended use.

Capital Work-In-Proqress

Expenses incurred for acquisition of Capital Assets outstanding at each balance sheet date are disclosed under Capital Work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital advances under head long term loans & advances.

f Depreciation

Depreciation on property, plant and equipment, tangible and intangible assets, has been provided under Straight Line method over the useful life of assets estimated by the management which is in line with the terms prescribed in Schedule II to The Companies Act, 2013.Depreciation for assets purchased/sold during the period is proportionately charged. Depreciation method, useful life & residual value are reviewed periodically.

g Employee Benefits

i) Defined contribution plan: The Company''s contributions paid or payable during the year to the provident fund for the employees is recognized as an expense in the Statement of Profit and Loss.

ii) Defined Benefit Plan: The Company''s liabilities towards Defined Benefit Schemes viz. Gratuity benefits and compensated absences are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the Balance Sheet date. Actuarial gains and losses are recognized in the statement of Profit and Loss in the period of occurrence of such gains and losses. Sick leaves and casual leaves are not encashable. However, as the same are eligible for carry forward, provision has been made based on Actuarial Valuation report.

h Foreign Currency Transactions

i. I nitial Recognition: Foreign currency transaction, are recorded in the reporting Currency, by applying the exchange rate between the reporting currency and the foreign currency at the date of the ransaction.

ii. Conversion: Foreign currency monetary items are reported using the closing rate.

iii. Exchange Difference: Exchange differences arising on the settlement of monetary items at rates different from those at which they are initially recorded during the year or reported in previous financial statement are recognized as income or as expenses at the end of year by applying closing rate.

i Borrowing Costs

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to profit and loss account.

j 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 are segregated.

The accounting treatment for the Income Tax in respect of the Company''s income is based on the Accounting Standard on ''Accounting for Taxes on Income'' (AS-22). The provision made for Income Tax in Accounts comprises both, the current tax and deferred tax. Provision for Current Tax is made on the assessable Income Tax rate applicable to the relevant assessment year after considering various deductions available under the Income Tax Act, 1961.

Deferred tax is recognized for all timing differences; being the differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. The carrying amount of deferred tax asset/ liability is reviewed at each Balance Sheet date and consequential adjustments are carried out.

l Investments :

I nvestment which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

m Inventories :

Raw Materials have been valued at lower of cost or net realizable value. Cost is determined on FIFO basis. Cost of Finished Goods and semi-finished goods includes all Costs of Purchases, Conversion Cost and other cost Incurred in bringing the inventories to their present location and Condition.The Net realizable value is estimated selling price in the ordinary course of business less the estimated costs of Completion and estimated cost necessary to make the finished goods/product ready for sale. Inventories have been taken as valued and certified by the Management.

n Provisions, contingent Liabilities and contingent assets:

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the likely future outflow of economic benefits required to settle the obligation at the reporting date.

Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also 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 neither recognized nor disclosed in the financial statements.

o Operating Leases

Lease contracts that do not transfer substantially all the risks and benefits of ownership of the assets to the company are classified as operating leases. Where lease rentals are so structured that the rental outflow is higher in the later periods of lease term, such lease rentals are recognised in the statement of profit and loss on a straight line basis over the lease term. Other operating leases are recognised in the statement of profit and loss as per the terms of the lease contract.

p Segment Reporting

The Company is engaged in manufacturing of API, job work manufacturing in Pharmaceuticals Items and traders in chemicals and solvents. The Company is engaged in the business of Speciality Chemicals only and therefore, there is only one reportable segment. Further, the company primarily operates in India. Therefore, no further information required to disclose as per "Accounting Standard 17- Segment Reporting”.

q Earning Per Share

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

In case of bonus issue the weighted average number of equity shares outstanding during the period and for all periods presented should be adjusted for events, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

r Impairment of Assets

An asset is treated as impaired when carrying costof assets exceeds its recoverable value. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows. An impairment loss is charged off to profit and loss account as and when asset is identified for impairment. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. An asset is treated as impaired when carrying cost of assets exceeds its recoverable value. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows.

s Government Grants

Government Grants are recognized when there is reasonable assurance that the company will comply with the conditions attached to them and the grants will be received.

Government grants whose primary conditions that company should purchase, construct or otherwise acquired capital assets are presented by deducting them from carrying value of assets.

Grants related to the revenue are adjusted against expenses to the extent there is certainty to receive.