(i) Out of total Bank deposits of INR 99.25 Lakhs, term deposits amounting to INR 98.16 Lakhs (as at 31st March 2023 INR 16.57 Lakhs) are lodged as margin money against Bank Guarantees and other Commitments.
(ii) Loss allowance of INR 226.95 Lakhs is made for incentive receivable under Market Access Initiative Scheme(MAI scheme).
(iii) The Company had a short receipt of INR 110.17 Lakhs for claim of FY 22-23. The management has written to the respective authority for clarification. The management has considered such an amount as recoverable, given that both the criteria for being eligible for the claim of FY 22-23 were complied with and presented under non current other financial assets.
(i) Company is eligible to get various incentive namely - Capital subsidy, interest subsidy, incentive on power tariff, employment generation incentive subsidy etc. from GSBTM (Gujarat State Biotechnology Mission) under Biotechnology Policy of Gujarat for establishing new API Plant at Limbasi. Company has received claims of subsidies on timely manner from GSBTM. The Company has received Capital subsidy pertaining for the claim of previous years from the GSBTM in FY 2022-23. As at 31st March 2024, the Company has outstanding receivable on account of various subsidies as follows - Interest Subsidy INR 14.96 Lakhs for interest paid on term loan, Power Tariff Subsidy INR 68.59 Lakhs, Employment Generation Incentive INR 15.59 Lakhs (as at 31st March 2023 Interest Subsidy INR 46.12 Lakhs for interest paid on term loan, Power Tariff Subsidy INR 65.62 Lakhs , Employment Generation Incentive INR 12.63 Lakhs).
(ii) The Company is eligible for claiming benefits under the Production Linked Incentive (PLI) Scheme of the Government of India. Based on the Claims Submitted by PLI department, the Company has recognised the PLI Income.
(iii) Other receivable includes INR 336.72 Lakhs (PY INR 461.72 Lakhs) of amount recoverable from customer towards bank guarantees invoked.
(i) Export Incentives Receivables includes INR 114.05 Lakhs (PY INR 126.39 Lakhs) for Duty Drawback, INR 89.93 Lakhs (PY INR 123.78 Lakhs) for RoDTEP INR 51.29 Lakhs (PY INR Nil) for RoDTEP Scripts on Hand, INR 53.15 Lakhs (PY INR 53.15 Lakhs) for Merchandise Exports From India Scheme (MEIS) and INR 2.81 Lakhs (PY INR 2.81 Lakhs) for Rebate on Excise Duty.
The Authorised Share Capital of the Company was increased from INR 10,00,00,000 (consisting of 1,00,00,000 equity shares of face value of INR 10 each) to INR 11,00,00,000 (consisting of 11,00,00,000 equity shares of face value of INR 1 each) through an ordinary resolution passed by the Shareholders of the Company in Extra Ordinary General Meeting of Company held on 8th July 2022.
(ii) Terms/rights attached to equity shares with voting rights:
The Company has only one class of equity shares having a par value of INR 1 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
(v) Pursuant to the approval of the shareholders at the Extra Ordinary General Meeting of the Company held on 8th July 2022, each equity share of face value of INR 10/- per share was sub-divided into 10 equity shares of face value of INR 1/- per share and approved the issuance of 1 bonus shares of face value INR 1 each for every 10 existing fully paid-up equity share of face value INR 1 each and accordingly 95,10,564 bonus shares were issued and allotted on 20th July 2022 out of securities premium.
Nature and purpose of reserves:
(i) General reserve:
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the Statement of Profit & Loss.
(ii) Retained Earnings:
Retained Earnings are the profits that the Company has earned till date less any transfer to general reserve, dividends and other distributions to shareholder.
(iii) Securities Premium:
This reserve represents Security Premium received at the time of issuance of Equity Shares.
(i) The Company has availed Term Loan from State Bank of India. Term Loan of INR 10,000 Lakhs (outstanding amounting as at 31st March 2024 INR 622.98 Lakhs, 31st March 2023 INR 3,123.56 Lakhs) is secured by first charge on Factory Land & Building and Plant & Machinery of Unit-III at Limbasi, Dist. Kheda, (Survey No. 666,667,668 and 84 at Village Malavada and Survey No. 94A,94B,119,120,126,135 and 136 at Ranasar ) and charge on the same has been created. Interest rate is 3 months MCLR 0.20% p.a and loan is repayable in 16 quarterly instalments of INR 625 Lakhs each starting from October, 2020.
(ii) The Company has Fund-based and Non-fund-based limits of Working Capital from Banks. For the said facility, the revised submissions made by the Company to its bankers based on closure of books of accounts at the respective year end, the revised quarterly returns or statements comprising stock statements, book debt statements, statements on ageing analysis of the debtors, and other stipulated financial information filed by the Company with such banks are in agreement with the unaudited books of account of the Company of the respective quarters and no material discrepancies have been observed.
(i) Provision for Sales Returns:
One of the distributor based out at America terminated exclusive distribution and supply agreement in the previous year ended 31st March 2023 and as per the Agreement, the Company was required to purchase the remaining unsold inventory based on mutual understanding between the parties. Accordingly, a provision of INR 2,163.70 Lakhs was made for inventory lying with the said distributor in the previous year ended 31st March 2023 which were primarily in nature of expired or near expiry products. During the current year ended 31st March 2024, the Company has received products from the said distributor. Consequently, the sales return provision of INR 2,163.70 Lakhs was utilised in the current year ended 31st March 2024.
(I) There are certain income-tax related legal proceedings which are pending against the Company. Potential liabilities, if any have been adequately provided for, and the Company does not currently estimate any probable material incremental tax liabilities in respect of these matters. Refer note 34 (b).
(ii) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
(iii) The Tax rate used for Financial Year 2023-24 and 2022-23, in reconciliation above is the corporate tax rate of 25.168% payable by corporate entity in India on taxable profits under the Indian Tax Law.
Company has paid fees of INR 77.25 Lakhs (Previous Year INR 144.20 Lakhs) for issuing various reports and certificates in connection with the completed initial public offering (IPO) during the current year. This expenses have been recovered from the selling shareholders and are not included in the above information.
3^ COMMITMENTS AND CONTINGENCIES
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(a) Commitments
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|
Particulars
|
As at
31st March 2024
|
As at
31st March 2023
|
|
Estimated amount of contracts remaining to be executed on capital account and not provided for in respect of the Property, Plant & Equipment (Net of Advances)
|
1,244.29
|
1,228.39
|
|
Total
|
1,244.29
|
1,228.39
|
|
(b) Contingent liabilities
|
|
(INR in Lakhs)
|
|
Particulars
|
As at
31st March 2024
|
As at
31st March 2023
|
|
Claims against the Company / disputed liabilities not acknowledged as debts:
|
|
|
|
Disputed demand of Excise duty for which an appeal has been preferred
|
376.37
|
376.37
|
|
- The Company has preferred Appeal to ITAT against order received from Assessing officer in respect of short payment of Excise duty, non reversal of input credit
|
|
|
|
Disputed demand of Income Tax in which company has preferred Appeal or filed rectification with Department :
|
1,054.56
|
1,054.56
|
|
- The Company has preferred Appeal to CIT(A) against order received from Assessing officer in respect of disallowance of additional depreciation in A.Y. 2013-14. Appeal order was received but effect order is pending
|
|
|
|
- The Company has preferred Appeal to CIT(A) against order received from Assessing officer in respect of Penalty imposed u/s 271(1)(C ) in A.Y.
2015-16 & 2016-17. Appeal order was received but effect order is pending
|
|
|
|
- The Company has preferred Appeal to CIT(A) against order received from Assessing officer in respect of disallowance of Purchase of Raw Material in A.Y. 2016-17
|
|
|
|
- The Company has preferred Appeal to CIT(A) against order received from Assessing officer in respect of disallowance of u/s 35(2)(AB) and Rule 8D r.w.s 14A in A.Y. 2018-19. Appeal order was received but effect order is pending
|
|
|
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- The Company has filed rectification with Assessing officer against intimation received from CPC regarding payment of Dividend Distribution Tax for A.Y. 2020-21. The Company has also filed Appeal to CIT(A) against order received from Assessing officer in respect of disallowance u/s Rule 8D r.w.s 14A in A.Y. 2020-21 and regarding not granting credit of payment of Dividend Distribution Tax. Appeal order was received but effect order is pending.
|
|
|
|
Total
|
1,430.93
|
1,430.93
|
(i) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above pending litigations of the respective proceedings.
(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities.
(iii) The Company believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s financial position and results of operations. These demands are with respect to income tax and service tax matters for which appeals have been filed.
~| EMPLOYEE BENEFITS PLANS:(a) Defined contribution plans:
The Company makes contributions towards provident fund, a defined contribution retirement benefit plan for qualifying employees. The provident fund is operated by the Regional Provident Fund Commissioner. The Company recognised INR 500.34 Lakhs (Previous Year INR 425.67 Lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the scheme.
(b) Defined benefit plans:
The Company makes annual contributions to the Employee's Group Gratuity cash accumulation scheme of the LIC, a funded defined benefit plan for qualifying employees. The Scheme provides for payment to vested employees at retirement/death while in employment or on termination of employment as per the provisions of the Gratuity Act, 1972. Vesting occurs on completion of 5 years of service. The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method as per actuarial valuation carried out at the balance sheet date.
Characteristics of Defined Benefit Plans and risk associated with them:
Valuation of defined benefit plan are performed on certain basic set of pre-determined assumptions and other regulatory framework, which may vary over time. Thus, Company is exposed to various risks in providing the above benefit plans which are as follows:
(i) Interest rate risk:
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (i.e. value of defined benefit obligation).
(ii) Salary escalation risk:
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan particulars in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
(iii) Demographic risk:
The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions.
vii. Sensitivity Analysis for each significant actuarial assumption:
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
(c ) Compensated absences:
Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made based on leave balances derived as per Company’s Rules with corresponding charge to the Statement of Profit and Loss amounting to INR 55.25 Lakhs (Previous Year INR 72.76 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.
The Company has taken various derivatives to hedge its risk associated with foreign exchange fluctuations. These transactions have been undertaken to act as economic hedges for the Company’s exposures to various risks in foreign exchange markets. Forward exchange contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes are entered, which are available at the settlement date of certain payables and receivables.
(ii) Fair value hierarchy :The fair values of the financial assets and liabilities are determined based on the price that would be received to sell an asset or paid to transfer a liability at the reporting date considering the fair value hierarchy as under:
Level 1: It includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Determination of fair values:
Basis of assumptions used to estimated the fair value of financial assets and liabilities that are measured at fair value on recurring basis :
Investment in Mutual Funds: The fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.
Derivative instruments: For forward contracts, future cash flows are estimated based on forward exchange rates and forward interest rates (from observable forward exchange rates / yield curves at the end of the reporting period) and contract forward exchange rates and forward interest rates, discounted at a rate that reflects the credit risk of various counterparties.
(iii) Financial Risk Management
The Company’s activities are exposed to variety of financial risks. These risks include market risk (including foreign currency risk, interest rate risks and price risk), credit risks and liquidity risk. The Company’s overall risk management program seeks to minimise potential adverse effects on the financial performance of the Company through established policies and processes which are laid down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.
A Market Risk :
Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign currency rates, interest rates and underlying equity prices.
A1 Foreign currency risk :
The Company’s foreign currency risk arises from its foreign currency transactions and foreign currency borrowings. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
The overall objective of the foreign currency risk management is to minimise the short term currency impact on its revenue and cash-flow in order to improve the predictability of the financial performance.
The major foreign currency exposures for the Company are denominated in USD. Additionally, there are transactions which are entered into in other currencies and are not significant in relation to the total volume of the foreign currency exposures. The Company hedges some trade receivables and future cash flows upto a maximum of 6 months forward based on historical trends, budgets and monthly sales estimates.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD rates to the functional currency of entity, with all other variables held constant. The Company’s exposure to foreign currency changes for all other currencies is not material. The impact on the Company’s profit after tax is due to changes in the fair value of monetary assets and liabilities.
A2 Interest rate risk :
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company is exposed to fluctuations in interest rates in respect of term loan carrying a floating rate of interest. In respect of term loan, the Company has outstanding borrowing of INR 622.98 Lakhs as at 31st March 2024 (As at 31st March 2023: INR 3,123.56 Lakhs) The following table demonstrates the sensitivity to a reasonable possible change on interest rates on that position of borrowing affected. with all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate of borrowing as follows:
B Credit Risk :
Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.
The Company establishes a loss allowance that represents its estimate of expected losses in respect of trade receivables. The maximum exposure to credit risk as at reporting date is from trade receivables amounting to INR 139.07 Lakhs (31st March 2023: INR 87.30 Lakhs). The movement in loss allowance in respect of trade receivables during the year was as follows:
C Liquidity Risk :
Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity.
(iv) Capital Management
The capital structure of the Company consists of equity and debt. The Company’s objective for capital management is to maintain the capital structure which will support the Company’s strategy to maximise shareholder’s value, safeguarding the business continuity and help in supporting the growth of the Company.
The Company monitors capital using gearing ratio, which is net debt (total debt less Cash and cash equivalents) divided by Total Equity.
40| SEGMENT REPORTING
The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.
The Company is engaged in the business of manufacturing and trading in pharmaceutical products. The entire business is considered as a single operating segment for the purpose of making decision on allocation of resources and assessing its performance.
Information about major customers:
There are no customers accounting for more than 10% of the Revenue in the year ended 31st March 2024 and Previous year 31st March 2023.
4l| RESEARCH & DEVELOPMENT
The Company’s facility is approved for Research & Development by Department of Science & Industrial Research (DSIR). The Company has incurred expenditure of revenue nature on Research & Development, details of which are as under:
~| DISCLOSURE REQUIREMENT AS PER SCHEDULE III
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(v) The Company has not received any fund from any person(s) or entity (ies) including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vi) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(vii) The Company is not declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
(viii) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.
(ix) The Company doesn’t have any co-owned properties or the properties (including properties for which the lease agreement executed and disclosed as 'Right-of-Use Assets’ in restated consolidated financial information) title deed of which are held by the others.
(x) The Company has not granted any Loans or Advances in the nature of loans to promoters, Directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.
(xi) The Company has used the borrowings from the banks for its intended purpose during the financial year.
(xii) The Company did not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the current and previous financial year.
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on 13th November 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
During the year ended 31st March 2024, the Company’s equity shares have been listed on National Stock Exchange ("NSE") and on BSE Limited ("BSE") on 18th August 2023, by completing Initial Public Offering ("IPO") through offer for sale ("OFS") of 2,09,25,652 equity shares of face value of INR 1 each at an issue price of INR 741 per equity share by Helix Investment Holdings Pte Limited, Singapore ("selling shareholder").
The Company has received proceeds in the share escrow account amounting to INR 1,55,052.08 Lakhs out of which INR 1,48,814.66 Lakhs paid to selling shareholders and INR 5,669.89 Lakhs to various parties for initial public offer expenses. The remaining funds amounting to INR 567.53 Lakhs which are yet to be paid to the selling shareholders after payments of initial public offer expenses is held in share escrow account and disclosed under Note 13 Cash and Bank balances as "share escrow account".
The Company has receivable balance of share issue expenses in connection with the public offer of equity shares amounting to INR NIL (31st March 2023: INR 1,268.16 Lakhs). As per the Offer Agreement entered between the Company and the selling shareholders, the selling shareholders shall reimburse the share issue expenses except for the listing fees which has been solely borne by the Company. Accordingly, the Company has recovered the expenses incurred in connection with the Issue on completion of IPO during the current year. The entire amount was disclosed under the Note 14 Other Financial Assets as "IPO expense reimbursement receivable".
The Company has payable balance to selling shareholders and various parties for initial public offer expenses was disclosed under the Note 22 Other financial liabilities as "Payable to selling shareholders and others".
Being 100% offer for sale, the Company has not presented the utilisation of the proceeds of IPO. The unutilised amount as on 31st March 2024, is held in bank account with schedule commercial bank.
45| DISCLOSURE FOR MAINTENANCE OF BOOKS OF ACCOUNTS WITH AUDIT TRAIL
The Ministry of Corporate Affairs (MCA) has issued a notification dated 24th March 2021 (Companies(Accounts) Amendments Rules, 2021) which is effective from 1st April 2023, states that every Company which uses accounting software for maintaining its books of account shall use only such accounting software which has a feature of recording audit trail of each and every transaction, and further creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
In respect of Primary accounting software used from 1st April 2023 to 12th June 2023, there was no feature of recording the audit trail (edit log). Thereafter, the Company has upgraded to advanced version of the accounting software having feature of recording audit trail of each and every transaction, and creating an edit log of each change made along with the date when such changes were made and also audit trail cannot be disabled.
46| EVENTS AFTER THE REPORTING PERIOD:
The Board of Directors in their meeting held on 23rd May 2024, proposed a final equity dividend of INR 8.75 per equity share of INR 1 each fully paid up for the financial year 2023-24
|