2.14. Provisions and Contingencies

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 can be reliably estimated. Provisions are not recognized for future
operating losses.

Provisions are measured at the present value of management's best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used
to determine the present value is a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognized as interest expense.

A disclosure for contingent liabilities is made 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 or a present
obligation that arises from past events where it is either not probable that an outflow of resources
embodying economic benefits will be required to settle or a reliable estimate of the amount cannot
be made.

2.15. Dividend Distributions

The Company recognizes a liability to make the payment of dividend to owners of equity, when the
distribution is authorised, and the distribution is no longer at the discretion of the Company. As per
the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.

2.16. Cash Flows

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 payment and items 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.

2.17. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk
of changes in value.

2.18. Earnings Per Share
Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company
by the weighted average number of equity shares outstanding during the financial year.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit after tax as adjusted for dividend,
interest and other charges to expense or income (net of any attributable taxes) relating to the
dilutive potential equity shares 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.

2.19. Segment Reporting

The management has assessed the identification of reportable segments in accordance with the
requirements of Ind AS 108 'Operating Segment' and believes that the Company has only one
reportable segment namely "Contract, Research, Development and Manufacturing Services".

2.20. Estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make
judgements, estimates and assumptions, that affect the application of accounting policies and the
reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and
liabilities at the date of these financial statements and the reported amounts of revenues and
expenses for the years presented. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed at each Balance Sheet date. Revisions to accounting estimates
are recognized in the period in which the estimate is revised, and future periods affected. This note
provides an overview of the areas that involved a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted due to estimates and assumptions turning out
to be different than those originally assessed. Detailed information about each of these estimates
and judgements is included in relevant notes together with information about the basis of
calculation for each affected line item in the financial statements.

The areas involving critical estimates or judgements are:

• Leases

The Company determines the lease term as the non-cancellable term of the lease, together with
any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the lease, if it is reasonably certain not to be
exercised. The Company applies judgement in evaluating whether it is reasonably certain whether
or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors
that create an economic incentive for it to exercise either the renewal or termination. After the
commencement date, the Company reassesses the lease term if there is a significant event or
change in circumstances that is within its control and affects its ability to exercise or not to exercise
the option to renew or to terminate (e.g., construction of significant leasehold improvements or
significant customisation to the leased asset).

• Employee benefits (estimation of defined benefit obligation)

Post-employment benefits represent obligations that will be settled in the future and require
assumptions to project benefit obligations. Post-employment benefit accounting is intended to
reflect the recognition of future benefit costs over the employee's approximate service period,
based on the terms of the plans and the investment and funding decisions made. The accounting
requires the Company to make assumptions regarding variables such as discount rate and salary
growth rate. Changes in these key assumptions can have a significant impact on the defined benefit
obligations.

• Impairment of trade receivables

The risk of collectability of trade receivables is primarily estimated based on prior experience with,
and the past due status of, doubtful debtors, based on factors that include ability to pay, bankruptcy
and payment history. The assumptions and estimates applied for determining the provision for
impairment are reviewed periodically.

• Estimation of expected useful lives of property, plant and equipment

Management reviews its estimate of the useful lives of property, plant and equipment at each
reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate
to technical and economic obsolescence that may change the utility of property, plant and
equipment.

• Contingencies

Legal proceedings covering a range of matters are pending against the Company. Due to the
uncertainty inherent in such matters, it is often difficult to predict the final outcome. The cases and
claims against the Company often raise difficult and complex factual and legal issues that are subject
to many uncertainties and complexities, including but not limited to the facts and circumstances of
each case/claim, the jurisdiction and the differences in applicable law. In the normal course of
business, the Company consults with legal counsel and other experts on matters related to

litigations. The Company accrues a liability when it is determined that an adverse outcome is
probable, and the amount of the loss can be reasonably estimated. In the event an adverse outcome
is possible, or an estimate is not determinable, the matter is disclosed.

• Valuation of deferred tax assets

Deferred income tax expense is calculated based on the differences between the carrying value of
assets and liabilities for financial reporting purposes and their respective tax bases that are
considered temporary in nature. Valuation of deferred tax assets is dependent on management's
assessment of future recoverability of the deferred benefit. Expected recoverability may result from
expected taxable income in the future, planned transactions or planned optimizing measures.
Economic conditions may change and lead to a different conclusion regarding recoverability.

• Fair value measurements

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 values are measured using
valuation techniques, including the discounted cash flow model, which involve various judgements
and assumptions.

financial assets include loans, trade and other receivables, cash and cash equivalents and other bank
balances that derive directly from its operations. The Company also holds investment in its subsidiaries.

The carrying amounts of trade receivables, trade payables and cash and bank balances are considered
to be the same as their fair values, due to their short-term nature. The difference between carrying
amounts and fair values of bank deposits, other financial assets, other financial liabilities and
borrowings subsequently measured at amortised cost is not significant in each of the years presented.

29. Financial risk management objectives and policies

The possible risk to the Company is financial risk such as Market Risk (Interest Rate Risk, fluctuation in
foreign exchange rates and price risk), credit risk and liquidity risk. The general risk management
program of the Company focuses on the unpredictability of the financial markets and attempts to
minimize their potential negative influence on the financial performance of the Company. The
Company continuously reviews its risk exposures and takes measures to limit it to acceptable levels.
The Board of Directors have the overall responsibility for the establishment and oversight of the
Company's risk management framework.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises three types of risk i.e. interest rate risk,
foreign currency risk and other price risk. Financial instruments of the Company affected by market risk
include borrowings and deposits. The company does not hold any financial instruments which have
market risk.

Price risk

The Company does not have any investments which are classified in the balance sheet either as fair
value through OCI or at fair value through profit or loss. Hence, the Company is not exposed to any
price risk.

Credit risk

Credit risk is the risk arising from credit exposure to customers and the counterparty will default on its
contractual obligations.

The Company has adopted a policy of only dealing with creditworthy customers/ corporates to
minimise collection losses. Credit Control team assesses the credit quality of the customers, their
financial position, past experience in payments and other relevant factors. Advance payments are
obtained from customers in banquets, as a means of mitigating the risk of financial loss from defaults.

The carrying amount of trade and other receivables, advances to suppliers, cash and short-term
deposits and interest receivable on deposits represents company's maximum exposure to the credit
risk. No other financial asset carries a significant exposure with respect to the credit risk. Deposits and
cash balances are placed with Schedule Commercial banks.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In
addition, a large number of minor receivables are assessed for impairment collectively. The maximum
exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company's treasury
department in accordance with the Company's policy.

Liquidity risk

Liquidity risk is the risk that the Company will have difficulty in raising the financial resources required
to fulfil its commitments.

Liquidity risk is held at low levels through effective cash flow management. Cash flow forecasting is
performed internally by rolling forecasts of the Company's liquidity requirements to ensure that it has
sufficient cash to meet operational requirements, to fund scheduled capex and debt repayments and
to comply with the terms of financing documents.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following
reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will
result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate
assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of
vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain
depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate
assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend
on whether the benefits are vested as at the resignation date.

Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the
insurer may not be the fair value of instruments backing the liability. In such cases, the present value
of the assets is independent of the future discount rate. This can result in wide fluctuations in the net
liability or the funded status if there are significant changes in the discount rate during the inter¬
valuation period.

Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant
level of benefits. If some of such employees resign/retire from the company, there can be strain on the
cashflows.

Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial
markets. One actuarial assumption that has a material effect is the discount rate. The discount rate
reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit
Obligation of the plan benefits & vice versa. This assumption depends on the yields on the
corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields
as at the valuation date.

Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change
in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring
the companies to pay higher benefits to the employees. This will directly affect the present value of
the Defined Benefit Obligation and the same will have to be recognized immediately in the year when
any such amendment is effective

32. Segment Reporting

The management has assessed the identification of reportable segments in accordance with the
requirements of Ind AS 108 'Operating Segment' and believes that the Company has only one
reportable segment namely "Contract Research and Manufacturing Services".

33. Capital management

The Company's policy is to maintain strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of business.

The Company manages its Capital structure through a balanced mix of debt and equity. The Company's
capital structure is influenced by the changes in the regulatory frameworks, government policies,
available options of financing and impact of the same on liquidity position.

The Company includes within net debt, interest bearing loans and borrowings, less cash and cash
equivalents. The Company monitors capital using a gearing ratio, which is net debt divided by total
capital plus net debt.

34. Non-Adjusting Event - Proposed Disposal of Subsidiary

The Board of Directors of the Company, at its meeting held on July 04, 2025, approved the
disinvestment of the Company's entire 66.50% partnership stake in Anugraha Chemicals. In accordance
with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, shareholders'
approval is also being sought through a Postal Ballot Notice dated July 04, 2025. The e-voting process
through postal ballot concluded on August 14, 2025, with a majority of shareholders voting in favour
of the proposal, thereby granting approval.

As this decision was made after the reporting date of 31 March 2025, no adjustments have been made
to the carrying amounts of assets, liabilities, or equity as at that date.

The estimated financial effect of the disposal is a net gain of Rs. 28.30 lakhs, which is subject to
finalization upon completion of the closing procedures.

The Company will enter into the exit agreement on a specified cut-off date and sell the said stake to
Mr. Sourabh Hadimani (an existing partner) or his nominee, and the net gain as of that date will be
subject to change.

Management will recognize the impact of the disposal in the next financial year when transaction is
finalized.

For PPKG & Co For Pharmaids Pharmaceuticals imited

Chartered Accountants

Firm Registration No: 009655S Sd/- Sd/-

Dr. S N Vinaya Babu Venu Madhava Kaparthy

Sd/- Chairman and Non-Executive Whole Time Director DIN:

& Non-Independent Director 00021699
CA Girdhari Lal Toshniwal DIN: 01373832

Partner

Membership No: 205140 Sd/- Sd/-

Balagangadhara B C Prasanna Subramanya Bhat

Place: Bengaluru Chief Financial Officer Company Secretary

Date: 21-08-2025 Mem No: A48828