2.13. Provisions, contingent liabilities and contingent assets
Provision
Provisions are recognized when the Company has a present legal or constructive obligation as a result of
past events; it is probable that an outflow of resources will be required to settle the obligation; and the
amount has been reliably estimated.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Company. A present obligation that arises from past
events where it is either not probable that an outflow of resources will be required to settle or reliable
estimate of the amount cannot be made, is termed as contingent liability.
The Company has various tax litigations for various years pending before various authorities under
Income Tax and GST, the outcome of which are material but not practicable for the Company to
estimate the timings of cash outflows
Contingent Assets
Contingent assets is disclosed where an inflow of economic benefit is probable.
2.14. Earning per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to
equity shareholders (after deducting attributable taxes) by the weighted average number of equity
shares outstanding during the period.
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 shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares.
2.15. Cash Flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and financing activities of the Company are
segregated based on the available information.
2.16. Foreign Currency Transactions
Functional Currency
Financial statements of the Company are presented in Indian Rupees (Rs.), which is also the functional
currency.
Transactions and Translations
in a foreign currency and measured at fair value are translated at the Foreign-currency denominated
monetary assets and liabilities are translated into the relevant functional currency at exchange rates in
effect at the balance sheet date. The gains or losses resulting from such translations are included in net
profit in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities
denominated exchange rate prevalent at the date when the fair value was determined. Non-monetary
assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost
are translated at the exchange rate prevalent at the date of the transaction. Transaction gains or losses
realized upon settlement of foreign currency transactions are included in determining net profit for the
period in which the transaction is settled.The monetary items such as debtors and creditors are valued
at closing rate on 31st March 2025.
2.17. Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits
incidental to ownership of the leased item, are capitalized at the inception of the lease term at the
lower of the fair value of the leased property and present value of minimum lease payments. Lease
payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on
remaining balance of the liability. Finance charges are recognized as finance costs in the statement of
profit and loss. Lease management fees, legal charges and other initial direct costs of lease are
capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is
no reasonable certainty that the company will obtain the ownership by the end of the lease term, the
capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of
the asset or the lease term.
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 unless the payments are
structured to increase in line with expected general inflation to compensate for the lessor's expected
inflationary cost increases.
The accompanying notes are an integral part of the financial statements.
For Motilal& Associates LLP. For and on Behalf of the Board of Directors
(a member firm of M A R C K S Network) For Aarey Drugs And Pharmaceuticals Limited
Chartered Accountants CIN: L99999MH1990PLC056538
ICAI FRN : 106584W/W100751
Rishabh Jain Mihir Rajesh Ghatalia Nimit R. Ghatalia
Partner Managing Director Director
Membership. No. 179547 DIN:00581005 DIN: 07069841
Place : Mumbai
Date : 30th May 2025
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