r) Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. If effect of the time value of money is material, provisions are discounted using an appropriate discount 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 finance cost. Contingent Liabilities are not recognized but are disclosed in the notes.
s) 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 realize the asset and settle the liability simultaneously.
t) Earnings per share:
Basic earnings per share are computed using the weighted average number of equity shares
outstanding during the period adjusted for treasury shares held. Diluted earnings per share is computed using the weighted-average number of equity and dilutive equivalent shares outstanding during the period.
u) Operating cycle
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
v) Exceptional Items:
Exceptional items refer to items of income or expense within the statement of profit and loss from ordinary activities which are nonrecurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance of the Company.
1.2 Recent Indian Accounting Standards (Ind AS): Standards Issued.
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. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
12 Assets held for Sale Accounting Policy
Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset or disposal group and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification.
Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment's and intangible assets once classified as held for sale are not depreciated or amortised.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
(1) represents a separate major line of business or geographical area of operations,
(2) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the Statement of Profit and Loss. Additional disclosures are provided hereunder. All other notes to the Standalone financial statements mainly include amounts for continuing operations, unless otherwise mentioned.
The shareholders of the Company vide special resolution dated March 15,2022 by way of postal ballot, approved the transfer of Active Pharmaceuticals ingredidant ("API") business undtertaking to Shilpa Pharma Lifesciences Limited (formerly known as Shilpa Corporate Holdings Private Limited, a wholly owned subsidiary of the Company as a going conern on slump sale basis through Business Transfer Agreement.
On 30 June, 2022, The Company had completed the transfer of the Company's Active Pharmaceuticals Ingredient (API) business to Shilpa Pharma Lifesciences Limited, a wholly owned subsidiary of the Company for a consideration of C 48,630.00 Lakhs (Final consideration being C 47,228.00 Lakhs after making working capital and other customary adjustments.
Note: Exceptional loss for the year ended March C 31,2024 of C 1,045.10 Lakhs (PY-Loss of C 1,554.65) is on account of C 0.002 Lakhs investment write back in Zatortia Holdings Ltd, a wholly owned foreign subsidiary, C 610.61 Lakhs provision towards impairment losses on account of investment in and advance to Koanna International FZ-LLC, a wholly owned foreign subsidiary, C 119.53 Lakhs provision towards impairment lossses on account of investment in and advance to Indo Biotech, a wholly owned foreign susidiary. in Previous Year is on account of C 54.65 Lakhs investment write off in Zatortia Holdings Ltd, a wholly owned foreign subsidiary, C 1,000.00 Lakhs provision towards impairment losses on account of investment in and advance to Koanna Healthcare GmbH, Austria, a wholly owned foreign subsidiary, C 500.00 Lakhs provision towards impairment lossses on account of investment in and advance to Koanna Healthcare Limited, United Kingdom, a wholly owned foreign susidiary.
The Company activities expose it to a variety of financial risks such as Market Risk, Credit Risk and Liquidity Risk. The company's focuses on minimizing potential adverse effect on its financial performance.
A) 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. The changes in the values of financial assets/liability may result from change in the foreign currency exchange rates (Foreign Currency Risk), change in interest rates (Cash flow & interest rate risk), and change in price of investments (Price Risk).
(i) Foreign Currency Risk
The Company operates internationally and a major portion of the business is transacted in USD, EURO & GBP currencies and consequently, the Company is exposed to foreign exchange risk through operating and borrowing activities in foreign currency. The Company holds derivative instruments such as foreign exchange forward, interest rate swaps and option contracts to mitigate the risk of changes in exchange rates and foreign currency exposure.
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regards to interest expenses/ income and to manage the interest rate risk, the Company weighted average balance manage its interest rate risk by having portfolio of fixed / variable interest rate on long / short term borrowings. The analysis is prepared assuming the amount of liability outstanding at the ending of the reporting period is the average weighted balance of the respective reporting period.
(iii) Price Risk
Company does not have any exposure to price risk , as there is no market based equity investment made by the Company.
B) Credit Risk
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The credit risk arises from its operation activity primarly from trade receivable and from its financial activity. Customer credit risk is controlled by analysis of credit limit and credit worthiness of the customer on a continuous basis to whom the credit has been granted.
Long outstanding receivable from customer are regularly monitored and transaction with such customer are covered under letter of credit. The maximum exposure to credit risk at the reporting date is the carrying value of trade and other receivable. Two customer are accounted for more than 10% of the trade receivable as of 31 March, 2024 and Three customer for 31 March, 2023. Since the Company is dealing with the customer from past several years, hence there is no concordent risk in dealing with said customers.
Expected credit loss assessment
The Group reviewed customers outstanding at the end of each reporting period and determine incurred and expected credit losses . Past trend of impairment of trade receivables do not reflect any significant credit losses.The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
C) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations of its financial liability. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for making liability when they are due, under normal and stressed condition without incurring losses and risk.
The present available working capital facility is sufficient to meet its current requirment. Accordingly no liquidity risk is perceived. In addition, the Company maintains the following line of credit facility
The table below provides details regarding the undiscounted contractual maturities of significant financial liabilities as of 31 March, 2024:
The key objective of the Company's capital management is to ensure that it maintains a stable capital structure with the focus of safeguard their ability to continue as a going concern, benefits for stakeholders, creditors and market confidence. Continue to maintain excess liquidity to shareholders by distributing dividends in future.
Company's vision is to keep the ratio below 1.00 and its adjusted net debt to equity ratio was as follows
47 A sum of Rs.53.13 lakhs is payable to Micro and Small Enterprises as at 31 March, 2024 (Rs. 459.71 lakhs as at 31 March, 2023). There are Rs.46.86 Lakhs dues outstanding more than 45 days to MIcro and Small Enterprises during the year 31 March, 2024. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act has been determined to the extent such parties has been identified on the basis of information available with the Company and relied upon by the Auditors.
48 Your Company has filed a Second Stage petition with National Company Law Tribunal for effecting the amalgamation with INM Technologies Private Limited being the wholly owned subsidiary, The Company is awaiting for the final order of the Hon'ble tribunal in this regard Your Company has filed a Second Stage petition with National Company Law Tribunal for effecting the amalgamation with INM Technologies Private Limited being the wholly owned subsidiary, The Company is awaiting for the final order of the Hon'ble tribunal in this regard Your Company has filed a Second Stage petition with National Company Law Tribunal for effecting the amalgamation with INM Technologies Private Limited being the wholly owned subsidiary. The matter was placed before special bench on 22nd July 2024. It is now placed before the Regular Bench on 13th September 2024.The Company is awaiting for the final order of the Hon'ble tribunal in this regard.
49 Investments are tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of each investment. When the recoverable amount of the investment is less than its carrying amount, an impairment loss is recognised.
The recoverable amounts of the above investments have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the business. Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows. Key assumptions upon which the Company has based its determinations of value-in-use include :
a) Estimated cash flows based on internal budgets and industry outlook for a period of five years and a terminal growth rate thereafter.
b) A terminal value arrived at by extrapolating the last forecasted year cash flows to perpetuity, using a constant long-term growth rate ranging from 1-3%. This long term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector.
c) The after tax discount rates used reflect the current market assessment of the risks specific to the investment, the discount rate is estimated based on the weighted average cost of capital for respective investment. After tax discount rate used range from 12%-16%
The Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cashgenerating unit.
50 Balance of trade receivables/ trade payables/advances and security deposits are subject to confirmation
51 Additional disclosures required by Schedule III (amendments dated 24 March 2021) to the Companies Act, 2013;
1) The Company do not have any Benami property and neither any proceedings have been initiated or is pending against the Company for holding any Benami property.
2) The Company do not have any transactions with companies struck off.
3) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
4) The Company has not been declared a wilful defaulter by any bank or financial institution or any other lender during the current period.
5) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds, other the in the ordinary course of business by the Company to or in any other person(s) or entiry(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
6) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
7) The Company has not made any such 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).
8) The Company has complied with number of layers prescribed under clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
9) The quarterly returns of current assets filed by the Company with banks are in agreement with books of account.
52 The ICC International court of Arbitration, London in terms of its order dated January 22, 2024 has pronounced an arbitration award to Celltrion Inc of $ 3.05 MN for breach of contract and interest till the date of payment and legal cost of $0.7 MN which aggregating to Rs.3,659.10 Lakhs as on 31 March 2024. The Company is legally advised that it has sufficient grounds to challenge the order at appropriate forum and is proposing to act accordingly to the legal advice and hence the ultimate outcome of the order cannot be determined presently. Therefore, the management is of the view that no provision deemed necessary as of now in respect of this matter in the financial statements and the same is disclosed as a contingent liability.
53 Events after the reporting period:
Capital infusion through "Qualified Institutions Placement (QIP)
The Company has raised Rs 50,000.00 Lakhs on 13th April 2024 thorough Qualified Institutional placement of equity shares & alloted 1,09,89,010 Equity Shares of face value T1 each to eligible qualified institutional buyers at the issue price of T455 per Equity Share, i.e., at a premium of T454 per Equity Share (which includes a discount of T22.33 per Equity Share (4.68% of the floor price) to the floor price of T477.33 per Equity Share, aggregating to T4,99,99,99,550 (Rupees Four Hundred and Ninety Nine Crores Ninety Nine Lakhs Ninety Nine Thousand Five Hundred Fifty only).
54 Figures of the previous year have been regrouped/rearranged wherever necessary.
As per our report of even date attached For and on behalf of the Board of Directors of
for Bohara Bhandari Bung And Associates LLP Shilpa Medicare Limited
Chartered Accountants
Firm's Registration No.008127S/S200013
Yogesh. R. Bung Omprakash Inani Vishnukant Bhutada
Partner Chairman Managing Director
M.No.143932 DIN : 01301385 DIN : 01243391
Place : Mumbai Ritu Tiwary Alpesh Maheshkumar Dalal
Date :23.05.2024 Company Secretary Chief Financial Officer
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