2.17 Provisions (other than for employee benefits)

A provision is recognized if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle
the obligation. If the effect of the time value of money
is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and the risks specific to the liability. Where
discounting is used, the increase in the provision due to
the passage of time is recognized as a finance cost.

2.18 Contingent liabilities & contingent assets

A disclosure for a contingent liability is 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 not recognised in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow
of economic benefits will arise, the asset and related
income are recognised in the period in which the
change occurs.

2.19 Financial instruments

a. Recognition and Initial recognition

The Company recognizes financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets
and liabilities are recognized at fair value on initial
recognition, except for trade receivables which are
initially measured at transaction price. Transaction
costs that are directly attributable to the acquisition or
issues of financial assets and financial liabilities that are
not at fair value through profit or loss, are added to the
fair value on initial recognition.

A financial asset or financial liability is initially measured
at fair value plus, for an item not at fair value through
Profit and Loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue.

b. Classification and Subsequent measurement
Financial assets:

On initial recognition, a financial asset is classified as
measured at

- amortised cost;

- FVTPL

Financial assets are not reclassified subsequent to
their initial recognition, except if and in the period the
Company changes its business model for managing
financial assets.

A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL:

- the asset is held within a business model whose
objective is to hold assets 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.

All financial assets not classified as measured at
amortised cost as described above are measured
at FVTPL. On initial recognition, the Company may
irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised
cost at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise
arise.

Financial assets: Business model assessment

The Company makes an assessment of the objective
of the business model in which a financial asset is held
at a portfolio level because this best reflects the way
the business is managed and information is provided to
management. The information considered includes:

- the stated policies and objectives for the portfolio
and the operation of those policies in practice.
These include whether management’s strategy
focuses on earning contractual interest income,
maintaining a particular interest rate profile,
matching the duration of the financial assets to
the duration of any related liabilities or expected
cash outflows or realising cash flows through the
sale of the assets;

- how the performance of the portfolio is evaluated
and reported to the Company’s management;

- the risks that affect the performance of the
business model (and the financial assets held
within that business model) and how those risks
are managed;

- how managers of the business are compensated
- e.g. whether compensation is based on the fair
value of the assets managed or the contractual
cash flows collected; and

- the frequency, volume and timing of sales of
financial assets in prior periods, the reasons for
such sales and expectations about future sales
activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition are
not considered sales for this purpose, consistent with
the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed
and whose performance is evaluated on a fair value
basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash
flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is
defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the
time value of money and for the credit risk associated
with the principal amount outstanding during a
particular period of time and for other basic lending
risks and costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.

In assessing whether the contractual cash flows are
solely payments of principal and interest, the Company
considers the contractual terms of the instrument. This
includes assessing whether the financial asset contains
a contractual term that could change the timing or
amount of contractual cash flows such that it would
not meet this condition. In making this assessment, the
Company considers:

- contingent events that would change the amount
or timing of cash flows;

- terms that may adjust the contractual coupon
rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company’s claim to cash
flows from specified assets (e.g. non- recourse
features).

A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents unpaid
amounts of principal and interest on the principal
amount outstanding, which may include reasonable
additional compensation for early termination of the
contract. Additionally, for a financial asset acquired
at a significant discount or premium to its contractual
par amount, a feature that permits or requires
prepayment at an amount that substantially represents

the contractual par amount plus accrued (but unpaid)
contractual interest (which may also include reasonable
additional compensation for early termination) is treated
as consistent with this criterion if the fair value of the
prepayment feature is insignificant at initial recognition.

Financial assets: Subsequent measurement and gains
and losses

Financial assets at FVTPL: These assets are subsequently
measured at fair value. Net gains and losses, including
any interest or dividend income, are recognised in
profit or loss.

Financial assets at amortised cost: These assets are
subsequently measured at amortised cost using
the effective interest method. The amortised cost
is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment
are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.

Financial liabilities: Classification, Subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held- for- trading, or
it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured
at fair value and net gains and losses, including any
interest expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured
at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses
are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.

Derecognition

Financial assets

The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the
Company neither transfers nor retains substantially all
of the risks and rewards of ownership and does not
retain control of the financial asset.

If the Company enters into transactions whereby it
transfers assets recognised on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred
assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled, or
expire.

The Company also derecognises a financial liability when
its terms are modified and the cash flows under the
modified terms are substantially different. In this case,
a new financial liability based on the modified terms is
recognised at fair value. The difference between the
carrying amount of the financial liability extinguished
and the new financial liability with modified terms is
recognised in profit.

d. Offsetting

Financial assets and financial liabilities are offset and
the net amount presented in the balance sheet when
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.

e. Impairment

The Company recognises loss allowances for expected
credit losses on financial assets measured at amortised
cost;

At each reporting date, the Company assesses whether
financial assets carried at amortised cost and debt
securities at fair value through other comprehensive
income (FVOCI) are credit impaired. A financial asset is
‘credit- impaired’ when one or more events that have a
detrimental impact on the estimated future cash flows
of the financial asset have occurred.

Evidence that a financial asset is credit- impaired
includes the following observable data:

- significant financial difficulty of the borrower or
issuer;

- the restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;

- it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a
security because of financial difficulties.

The Company measures loss allowances at an amount
equal to lifetime expected credit losses, except for the
following, which are measured as 12 month expected
credit losses:

- debt securities that are determined to have low
credit risk at the reporting date; and

- other debt securities and bank balances for which
credit risk (i.e. the risk of default occurring over
the expected life of the financial instrument) has
not increased significantly since initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses.

Lifetime expected credit losses are the expected credit
losses that result from all possible default events over
the expected life of a financial instrument.

12-month expected credit losses are the portion of
expected credit losses that result from default events
that are possible within 12 months after the reporting
date (or a shorter period if the expected life of the
instrument is less than 12 months).

In all cases, the maximum period considered when
estimating expected credit losses is the maximum
contractual period over which the Company is exposed
to credit risk.

When determining whether the credit risk of a financial
asset has increased significantly since initial recognition
and when estimating expected credit losses, the
Company considers reasonable and supportable
information that is relevant and available without
undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the
Company’s historical experience and informed credit
assessment and including forward- looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the Company
in accordance with the contract and the cash flows that
the Company expects to receive).

Presentation of allowance for expected credit losses in
the balance sheet

Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.

Write-off

The gross carrying amount of a financial asset is written
off (either partially or in full) to the extent that there
is no realistic prospect of recovery. This is generally
the case when the Company determines that the trade
receivable does not have assets or sources of income
that could generate sufficient cash flows to repay the
amounts subject to the write- off. However, financial
assets that are written off could still be subject to
enforcement activities in order to comply with the
Company’s procedures for recovery of amounts due.

30 Capital Management

For the purpose of Company’s capital management,
Capital includes issued equity capital and other equity
reserves attributable to the equity holders of the
Company. The primary objective of the Company’s
capital management is to maximise the shareholder
value.

To maintain or adjust the capital structure, the Company
may adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. The
Company monitors capital using a gearing ratio, which
is net debt divided by total capital plus net debt. The
Company includes within net debt, interest bearing
loans and borrowings, trade and other payables, less
cash and cash equivalents.

31 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise
of trade and other payables. The main purpose of
these financial liabilities is to finance the Company’s
operations. The Company’s principal financial assets
include cash and cash equivalents that derive directly
from its operations and FVTPL investments.

The Company is exposed to market risk and liquidity
risk. The Company’s senior management oversees
management of these risks. The Company’s financial
risk activities are governed by appropriate policies
and procedures so that financial risks are identified,
measured and managed in accordance with the
Company’s policies and risk objectives. The Board of
Directors reviews and agrees policies for managing
each of these risks, which are summarised below.

Market Risk

Market risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because

of changes in market prices. Market risk comprises of
currency rate risk, interest rate risk and other price risk.
Financial instruments affected by market risk include
FVTPL financial instruments.

The sensitivity analyses in the following sections relate
to the position as at 31 March 2021and 31 March
2020.

Equity price risk

The Company’s listed equity instruments are susceptible
to market price risk arising from uncertainties about
future values of the investment securities. The
Company manages the equity price risk through
diversification. The Company’s Board of Directors
reviews and approves all equity investment decisions.

Liquidity Risk

The Company’s objective is to maintain a balance
between continuity of funding and flexibility. The
Company has sufficient working capitall funds available
to honour the debt maturing within 12 months.

32 MSME

The Company has entered into business transactions
with suppliers registered under the Micro, Small and
Medium Enterprises Development act,2006 the
payment for which have been made lessthan 45 days.

33 Subsequent Events

There are no significant events that occurred after the
balance sheet date.

34 Prior year comparatives

The figures of the previous year have been regrouped/
reclassified, where necessary, to confirm with the
current year’s classification.

35 Additional Regulatory Information

i) Title deeds of Immovable Properties not held in
name of the Company

The Company is not in possession of any
immovable property.

ii) The Company has not revalued any of its
Property, Plant and Equipment during the year.

iii) No loans and advances were granted to
promoters, directors, KMPs and the related
parties

38 Details of Crypto Currency or Virtual Currency

The Company has not traded nor has invested in Crypto Currency or Virtual Currency during the financial year.

For P Murali & Co., For and on behalf of the Board

Chartered Accountants Balaxi Pharmaceuticals Limited

Firm Registration No. 007257S

A Krishna rao Ashish Maheshwari Minoshi Maheshwari

Partner Managing Director Director

Membership No. 020085 DIN: 01575984 DIN: 01575975

UDIN: 25020085BMILFF8590

Place : Hyderabad Amol Mantri Mohith Kumar Khandelwal

Date : 30-05-2025 Chief Financial Officer Company Secretary