2.7 Provisions

A provision is recognised when the Company has a present legal or constructive obligation as a result of
past event and it is probable that an outflow of resources will be required to settle the obligation, in
respect of which reliable estimate can be made. Provisions (other than employee benefits) are not
discounted to its present value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to
reflect the current best estimates.

2.8 Revenue Recognition

Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met as described below.

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of indirect taxes, trade allowances, rebates and amounts collected on behalf of third
parties and is not recognised in instances where there is uncertainty with regard to ultimate collection. In
such cases revenue is recognised on reasonable certainty of collection.

Interest Income

Interest income from a financial asset is recognised using effective interest rate method. However, in
respect of certain financial assets where it is not probable that the economic benefits associated with the
transaction will flow to the entity and amount of revenue cannot be measured reliably, in such cases
interest income is not recognised.

2.9 Dividend Income

Dividends will be recognised when the company's right to receive has been established.

2.10 Employee benefits

2.10.1 Short term employee benefits

The undiscounted amount of short-term employee benefits is expected to be paid in exchange for the
services rendered by employees are recognised as an expense during the period when the employees
render the services.

2.10.2 Defined benefit plans

a) Gratuity

In accordance with the Payment of Gratuity Act, 1972, Company provides for gratuity, a defined
retirement plan (the “Gratuity Plan”) covering the eligible employees. The Gratuity Plan provides a lump
sum payment to vested employees at retirement, death, incapacitation or termination of employment, of
an amount based on the respective employee salary and the tenure of employment. Liability with regard
to the Gratuity Plan are determined by actuarial valuation as per the requirements of IndAS 19 as of the
balance sheet date, The company would meet the liabilities at the time when they fall due and has not
funded the same by way of separate gratuity Fund.

b) Provident fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan.
Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or
termination of employment. Both the employee and the Company make monthly contributions to the
Regional Provident Fund Commissioner equal to a specified percentage of the covered employee's
salary.

c) Employee State Insurance Fund

Eligible employees are entitled to receive benefit under employee state insurance fund scheme. The
employer makes contribution to the scheme at a predetermined rate of employee's gross salary. The
Company has no further obligations under the plan beyond its monthly contributions. These
contributions are made to the fund administered and managed by the Government of India.
contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

d) Leave encashment

All the employees who have completed their eligible service in the Company are eligible for leave
encashment as per policy of the Company and the same is paid to the eligible employee at retirement,
death, incapacitation or termination of employment. This amount, as calculated for all the eligible
employees, is charged to the Statement of Profit and Loss.

2.11 Tax Expenses

The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of
Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in
equity. In which case, the tax is also recognised in other comprehensive income or equity.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount expected to be paid or received after considering the
uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities are off set only if there is a legally enforceable right to set off
the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or
simultaneously.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax
liabilities and assets are reviewed at the end of each reporting period.

Minimum alternate tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax.
The Company recognizes MAT credit available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the specified period, i.e., the period for
which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of
Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the
Statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT
credit entitlement” asset at each reporting date and writes down the asset to the extent the company
does not have convincing evidence that it will pay normal tax during the specified period.

2.12 Leases

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a
term of twelve months or less (short-term leases) and low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as an operating expense on a straight-line
basis over the term of the lease.

As per Ind AS 116, Variable lease payments that do not depend on an index or rate and are not in
substance or fixed, such as those based on performance (i.e. percentage of sales) are not included as
lease payments and these payments are recognized in the statement of profit or loss in the period in
which the event that triggers the payment occurrence.

Hence, the company did not recognize any ROU as the lease agreement does not contain fixed
Minimum Lease payments.

2.13 Borrowing costs

Borrowing costs incurred for obtaining assets which takes substantial period to get ready for their
intended use are capitalized to the respective assets wherever the costs are directly attributable to such
assets and in other cases by applying weighted average cost of borrowings to the expenditure on such
assets. Other borrowing costs are treated as expense for the year.

Transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans
using effective interest method.

2.14 Earnings per equity share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owner of the company.

• By the weighted number of equity shares outstanding during the financial year

(ii) Diluted earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable
to equity shareholders and the weighted average number of share outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.

2.15 Financial Instruments

i. Financial assets

A. Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair
value through profit or loss, are adjusted to the fair value on initial recognition.

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 profit or loss (FVTPL)

A Financial asset which is not classified as AC or FVOCI are measured at FVTPL. A gain or loss on a
debt investment that is subsequently measured at fair value through profit or loss is recognised in profit
or loss and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in
which it arises.

c) 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.

B. Investments in subsidiaries

The Company has accounted for its investments in subsidiaries at cost and not adjusted to fair value at
the end of each reporting period. Cost represents amount paid for acquisition of the said investments.

ii. Financial Liabilities

A. Initial recognition

All financial liabilities are recognized at fair value.

B. Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other
payables maturing within one year from the balance sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.

2.16 Exceptional Items

Exceptional items refer to items of income or expense, including tax items, within the statement of profit
and loss from ordinary activities which are non-recurring and are of such size, nature or incidence that
their separate disclosure is considered necessary to explain the performance of the Company.

2.16 New standards and interpretations not yet Adopted

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. MCA has notified
following amendments:

Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and
leaseback transactions, applicable to the Company w.e.f. April 01, 2024. The Company has reviewed
the new pronouncements and based on its evaluation has determined that it does not have any
significant impact on its financial statements.

Ind AS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess
whether a currency is exchangeable and how it should determine a spot exchange rate when
exchangeability is lacking. The amendments also require disclosure of information to enable understand
the impact on the entity's financial performance, financial position and cash flows. The amendments are
effective for annual reporting periods beginning on or after April 01, 2025. When applying the
amendments, an entity cannot restate comparative information. The Company has reviewed the new
pronouncements and based on its evaluation has determined that it does not have any significant impact
on its financial statements.

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

For A.M.REDDY & D.R.REDDY OXYGENTA PHARMACEUTICAL LIMITED

Chartered Accountants CIN: L24110TG1990PLC012038

ICAI Firm Registration No: 009068S

Sd/-

D. Rama Krishna Reddy g^_ g^_

^Partne^r Dr v Sai Sudhakar Dolly Mandhan

^MDiN^{b e}2^rfs20^p9^N1^o1.B²M⁰J^OQ1517 ^{Managing Director} & ^{CFO Company Secretory}

Place: Hyderabad
Date: 30th May, 2025