1.1 Company Overview
Morepen Laboratories Limited ("the Company") is
a Public limited company incorporated and
domiciled in India and has its listing on the BSE
Limited and National Stock Exchange of India
Limited. The addresses of its registered office and
principal place of business and CIN are disclosed
in the introduction to the annual report. The
Company is in the business of manufacturing,
producing, developing and marketing a wide
range of Active Pharmaceutical Ingredients (APIs),
branded and generic formulations and also the
Home Health products. The Company has its
manufacturing locations situated in the state of
Himachal Pradesh with trading and other
incidental and related activities extending to both
domestic and global markets.
1.2 Basis for preparation of financial statements
The standalone financial statements of the
Company as at and for the year ended 31st March,
2026 have been prepared and presented in
accordance with the Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 ("the Act") [Companies
(Indian Accounting Standards) Rules, 2015], and
presentation requirements of Division II of
Schedule III to the Companies Act, 2013 as
amended from time to time, and other relevant
provisions of the Act and accounting principles
generally accepted in India. These standalone
financial statements have been prepared by
the Company on a going concern basis and
guidelines issued by the Securities and Exchange
Board of India (SEBI), as applicable.
Consistency of accounting policy
Accounting policies have been consistently
applied to all the periods presented in the
financial statements except where a newly issued
accounting standard is initially adopted or a
revision to an existing accounting standard
requires a change in the accounting policy
hitherto in use.
The financial statements for the financial year
ended March 31,2026 are authorized for issue by
the Board of Directors of the Company at their
meeting held on May 26, 2026.
Functional currency and rounding of amounts
The financial statements are presented in Indian
Rupees, which is the functional currency of the
Company and the currency of the primary
economic environment in which the Company
operates and all values are rounded to the nearest
Lakhs (Rs.00,000) upto two decimals, except
when otherwise indicated.
Basis of measurement
These financial statements are prepared under the
historical cost convention unless otherwise
indicated.
Operating Cycle
Based on the nature of products/activities of the
company and normal time between acquisition of
assets and their realisation in cash or cash
equivalents, the company has determined its
operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current
and non-current
1.3 Use of Estimates and Judgements
The presentation of financial statements in
conformity with Ind AS requires the management
of the company to make estimates, judgements
and assumptions. These estimates, judgements
and assumptions affect the application of
accounting policies and the reported balances of
assets and liabilities, disclosures of contingent
assets and liabilities as at the date of financial
statements and the reported amount of revenues
and expenses during the year. Examples of such
estimates include provisions for doubtful debts,
employee benefits, provisions for income taxes,
useful life of depreciable assets and provisions for
impairments & others.
Accounting estimates could change from period to
period. Actual results could differ from those
estimates. Appropriate changes in estimates are
made as management becomes aware of
changes in circumstances surrounding the
estimates. Changes in estimates are reflected in
the financial statements in the period in which
changes are made and, if material, their effects
are disclosed in the notes to financial statements.
1.4. Property, Plant and Equipment (PPE)
The Company has elected to continue with the
carrying value of all its property, plant and
equipment as recognized in the financial
statements as at the date of transition to Ind AS,
measured as per the previous GAAP and use that
as the deemed cost as at the transition date
pursuant to the exemption under Ind AS 101.
a) Free hold land is carried at cost, it has an
unlimited useful life and therefore is not
depreciated. All other items of Property, plant
and equipment are stated at cost, less
accumulated depreciation. The initial cost of
PPE comprises its purchase price, including
import duties and non-refundable purchase
taxes, and any directly attributable costs of
bringing an asset to working condition and
location for its intended use, including
relevant borrowing costs and any expected
significant costs of decommissioning, less
accumulated depreciation and accumulated
impairment losses, if any. Expenditure
incurred after the PPE have been put into
operation, such as repairs and maintenance,
are charged to the Statement of Profit and
Loss in the period in which the costs are
incurred.
b) Advances paid towards the acquisition of
property, plant and equipment outstanding at
each balance sheet date is classified as
capital advances under other non-current
assets.
c) Capital work-in-progress included in non¬
current assets comprises of direct costs,
related incidental expenses and attributable
interest. Capital work-in-progress are not
depreciated as these assets are not yet
available for use.
d) The cost of PPE and related accumulated
depreciation are de-recognised from the
financial statements upon sale or disposal or
when no future economic benefits are
expected from its use and the resultant gains
or losses are recognized in the statement of
profit and loss. Assets to be disposed off are
reported at the lower of the carrying value or
the fair value less cost to sell. Any control
software for a machine is shown under plant
& machinery.
1.5 Intangible Assets
Internally generated Intangible Assets - Research
and Development expenditure
Expenditure pertaining to research is expensed as
incurred. Expenditure incurred on development is
capitalised if such expenditure leads to creation of
an asset and/or benefits are expected over more
than one period, otherwise such expenditure is
charged to the Statement of Profit and Loss.
An internally-generated intangible asset arising
from development is recognised if and only if all
of the following have been demonstrated:
• Development costs can be measured reliably;
• The product or process is technically and
commercially feasible;
• Future economic benefits are probable; and
• The Company intends to and has sufficient
resources/ability to complete development and
to use or sell the asset.
Expenditure providing benefits for more than
one period is amortised proportionately over
the periods during which benefits are expected
to occur.
Intangible Assets acquired separately
Intangible assets with finite useful lives that are
acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment, if any. The Company determines the
amortisation period as the period over which the
future economic benefits will flow to the Company
after taking into account all relevant facts and
circumstances. The estimated useful life and
amortisation method are reviewed periodically,
with the effect of any changes in estimate being
accounted for on a prospective basis.
1.6 Non-current assets held for sale
Assets are classified as held for sale if their
carrying amount will be recovered principally
through a sale transaction rather than through
continuing use and a sale is considered highly
probable. They are measured at the lower of
carrying amount and fair value less costs to sell.
Non-current assets and the assets of disposal
group classified as held for sale are presented
separately from the other assets in the Standalone
balance sheet. The liabilities of a disposal group
classified as held for sale are presented
separately from the other liabilities in the
Standalone balance sheet. Once classified as
held for sale, intangible assets and property, plant
and equipment are no longer amortized or
depreciated.
1.7 Depreciation & Amortisation
Depreciation is the systematic allocation of the
depreciable amount of PPE (other than freehold
land and Capital work-in-progress) on a straight¬
line basis over the useful lives as prescribed in
Schedule II to the Act or as per technical
assessment.
a) Depreciation on fixed assets is provided on
straight-line method at the rates prescribed by
the schedule II of the Companies Act, 2013
and in the manner as prescribed by it except
assets costing less than '5000/- on which
depreciation is charged in full during the year.
Depreciation methods, useful lives and
residual values are reviewed at the end of
each reporting period, with the effect of any
changes in estimate accounted for on a
prospective basis. The estimated useful lives
are as follows:
b) Intangible assets are amortized over their
respective individual estimated useful life on
straight line basis, commencing from the date
the asset is available to the company for its
use. The estimated useful life of an identifiable
intangible asset is based on several factors
including the effects of obsolescence, etc.
The amortization method and useful lives
are reviewed periodically at end of each
financial year.
1.8 Valuation of inventories
Stocks of raw materials and other ingredients
have been valued on First in First Out (FIFO) basis,
at cost or net realizable value whichever is less,
finished goods and stock-in-trade have been
valued at lower of cost and net realizable value,
work-in-progress is valued at raw material cost up
to the stage of completion, as certified by the
management on technical basis. Goods in transit
are carried at cost.
1.9 Foreign Currency Transactions / Translations
i) Transactions denominated in foreign currency
are recorded to the functional currency of the
Company at exchange rates prevailing at the
date of transaction or at rates that closely
approximate the rate at the date of the
transaction.
ii) Monetary assets and liabilities denominated
in foreign currencies at the reporting date are
translated into the functional currency at the
exchange rate at the reporting date. Non¬
monetary assets and liabilities that are
measured based on historical cost in a foreign
currency are translated at the exchange rate at
the date of the transaction.
iii) Exchange differences on monetary items are
recognised in the Statement of Profit and Loss
in the period in which they arise except for
exchange differences on foreign currency
borrowings relating to assets under
construction for future productive use, which
are included in the cost of those assets when
they are regarded as an adjustment to interest
costs on those foreign currency borrowings.
iv) Foreign exchange differences recorded as an
adjustment to borrowing costs are presented
in the statement of profit and loss, as a part of
finance cost. All other foreign exchange gains
and losses are presented in the statement of
profit and loss on net basis.
v) In case of long term monetary items
outstanding as at the end of year, exchange
differences arising on settlement /
restatement thereof are capitalised as part of
the depreciable fixed assets to which the
monetary item relates and depreciated over
the remaining useful life of such assets. If such
monetary items do not relate to acquisition of
depreciable fixed assets, the exchange
difference is amortised over the maturity
period / up to the date of settlement of such
monetary items, whichever is earlier, and
charged to the Statement of Profit and Loss.
2.0 Dividends
Dividends are recognized as liability in the
financial statements in the period in which they
are appropriately authorized and no longer at the
discretion of the company. For interim dividends,
this is typically the date of approval by the Board
of Directors. For final dividends, liability is
recognized upon approval by the shareholders at
the Annual General Meeting.
Proposed dividends that are declared after the
reporting date are not recognized as a liability at
the end of the reporting period but are disclosed
in the notes to the financial statements in
accordance with Ind AS-10 'Events occurring after
reporting period'
Dividends are distributed from retained earnings
and are subject to the availability of sufficient
distributable profits and liquidity. All dividend
payments are made in compliance with
applicable legal and regulatory requirements.
2.1 Right-of-use (RoU) of Asset and Lease liabilities
The Company assesses whether a contract is or
contains a lease, at the inception of a contract. A
contract is, or contains, a lease if the contract
conveys the right to control the use of an identified
asset for a period of time in exchange
for consideration. To assess whether a contract
conveys the right to control the use of an
identified asset.
At the date of commencement of the lease, the
Company recognises a right-of-use asset ('ROU')
and a corresponding lease liability. Right-of-use
of assets are initially measured at cost, which
comprises the amount of initial lease liability, any
lease payments made at or before the
commencement date, less any lease incentive
received, any initial direct costs incurred and an
estimate of the costs to dismantle or restore the
asset. They are subsequently measured at cost less
accumulated depreciation and impairment
losses, if any. Right-of-use assets are depreciated
from the commencement date on a straight-line
basis over the shorter of the lease term and useful
life of the underlying asset. However, if the lease
transfers ownership of the underlying asset to the
Company by the end of the lease term or if the cost
of the right-of-use asset reflects that the Company
will exercise a purchase option, the right-of-use
asset is depreciated over the useful life of the
underlying asset.
Lease liabilities are initially measured at the
present value of future lease payments over the
lease term, discounted using the interest rate
implicit in the lease, or if it cannot be readily
determined, the Company's incremental
borrowing rate. Lease liabilities are subsequently
measured at amortized cost using effective
interest rate and are remeasured when there is a
change in future lease payments arising from
change in index or rate, a reassessment of
options, or a modification of the lease.
The Company has elected not to recognize RoU
assets and lease liabilities for leases with a lease
term of 12 months or less (short-term leases) and
for leases of low-value assets. Lease payment for
such leases is recognized as an expense on a
straight-line basis over the lease term.
2.2 Financial Instruments
A financial instrument is any contract that gives rise
to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets and financial liabilities are
recognised when a Company becomes a party
to the contractual provisions of the instruments.
i) Initial Recognition and measurement
On initial recognition, all the financial assets
(excluding trade receivables) and liabilities
are recognized initially at its fair value plus or
minus transaction costs that are directly
attributable to the acquisition or issue of the
financial asset or financial liability except
financial asset or financial liability measured
at fair value through profit or loss ("FVTPL").
Transaction costs of financial assets and
liabilities carried at fair value through the
Profit and Loss are immediately recognized in
the Statement of Profit and Loss.
However, trade receivables that do not
contain a significant financing component
are measured at transaction price
ii) Subsequent measurement
a) Financial assets carried at amortised cost
A financial asset is subsequently
measured at amortised cost if it is held
within a business model whose objective
is to hold the asset in order 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.
b) Financial assets at fair value through
other comprehensive income (FVTOCI)
A financial asset is subsequently
measured at fair value through other
comprehensive income if it is held within
a business model whose objective is
achieved by both collecting contractual
cash flows and selling financial assets
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.
c) Financial assets at fair value through
profit or loss (FVTPL)
A financial asset is measured at fair value
through profit and loss unless it is
measured at amortized cost or at fair value
through other comprehensive income.
d) Investments in subsidiaries, joint
ventures and associates
The Company has adopted to measure
investments in subsidiaries, joint ventures
and associates at cost in accordance with
Ind AS 27 and carrying amount as per
previous GAAP at the date of transition
has been considered as deemed cost in
accordance with Ind AS 101.
e) Financial liabilities
Financial liabilities are classified as either
financial liabilities at FVTPL or 'other
financial liabilities'.
Financial liabilities at FVTPL
Financial liabilities are classified as at
FVTPL when the financial liability is held
for trading or are designated upon initial
recognition as FVTPL. Gains or Losses on
liabilities held for trading are recognised
in the Statement of Profit and Loss.
Other Financial liabilities
Other financial liabilities (including
borrowings and trade and other
payables) are subsequently measured at
amortised cost using the effective interest
method.
For trade and other payables maturing
within one year from the balance sheet
date, the carrying amounts approximate
fair value due to the short maturity of
these instruments.
iii) Derecognition of financial instruments
A financial asset is derecognized when the
contractual rights to the cash flows from the
financial asset expire or it transfers the
financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial
liability is derecognized when the obligation
specified in the contract is discharged or
cancelled or expired.
iv) Fair value measurement of financial
instruments
The fair value of financial instruments is
determined using the valuation techniques
that are appropriate in the circumstances and
for which sufficient data are available to
measure fair value, maximising the use of
relevant observable inputs and minimising the
use of unobservable inputs.
Based on the three level fair value hierarchy,
the methods used to determine the fair value
of financial assets and liabilities include
quoted market price, discounted cash flow
analysis and valuation certified by the external
valuer.
In case of financial instruments where the
carrying amount approximates fair value due
to the short maturity of those instruments,
carrying amount is considered as fair value.
2.3 Impairment ofAssets
i) Financial Assets
In accordance with Ind AS 109, the company
recognizes loss allowances using the expected
credit loss (ECL) model for the financial assets
which are not fair valued through profit or loss.
Loss allowance for trade receivables with no
significant financing component is measured
at an amount equal to lifetime ECL. For all
other financial assets, expected credit losses
are measured at an amount equal to the 12-
month ECL, unless there has been a significant
increase in credit risk from initial recognition in
which case those are measured at lifetime
ECL. The amount of expected credit losses (or
reversal) that is required to adjust the loss
allowance at the reporting date to the amount
that is required to be recognised, is recognized
as an impairment gain or loss in statement of
profit or loss.
ii) Non-Financial Assets
The carrying amounts of the Company's
tangible and intangible assets are reviewed at
each reporting date to determine whether there
is any indication of impairment. If any such
indication exists, then the asset's recoverable
amount is estimated in order to determine the
extent of the impairment loss, if any.
The impairment loss is recognised as an
expense in the Statement of Profit and Loss,
unless the asset is carried at revalued amount,
in which case any impairment loss of the
revalued asset is treated as a revaluation
decrease to the extent a revaluation reserve is
available for that asset.
The recoverable amount is the greater of the
net selling price and their value in use. Value in
use is arrived at by discounting the future cash
flows to their present value based on an
appropriate discount factor.
When there is indication that an impairment
loss recognised for an asset (other than a
revalued asset) in earlier accounting periods no
longer exists or may have decreased, such
reversal of impairment loss is recognised in the
Statement of Profit and Loss, to the extent the
amount was previously charged to the
Statement of Profit and Loss. In case of revalued
assets, such reversal is not recognised.
2.4 Revenue Recognition
Revenue is recognized to the extent that it is
probable that the economic benefits will flow to
the Company and the amount can be reliably
measured
a) Revenue is recognised at the value of
consideration received or receivable. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of various discounts and schemes
offered by the company as part of the
contract. The amount disclosed as revenue is
net of returns, trade discounts, Goods and
Services Tax (GST).
Provisions for rebates, discount and return are
estimated and provided for in the year of sales
and recorded as reduction of revenue.
b) Dividend income is accounted for when the
right to receive the income is established.
2.5 Interest
Interest income from a financial asset is
recognized when it is probable that the economic
benefits will flow to the company and the amount
of income can be measured reliably.
Income from interest is recognized using the
effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash
payments or receipts over the expected life of the
financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the
financial asset. When calculating the effective
interest rate, the Company estimates the expected
cash flows by considering all the contractual terms
of the financial instrument but does not consider
the expected credit losses.
2.6 Income Taxes
Income tax expense comprises current tax and
deferred tax. Income tax expense is recognized in
the statement of profit and loss except to the extent
that it relates to items recognized directly in equity
or other comprehensive income, in which case it is
also recognized in equity or other comprehensive
income respectively.
Current income tax for current and prior periods is
recognized at the amount expected to be paid to
or recovered from the tax authorities, using the tax
rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
The Company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognized
amounts and where it intends either to settle on a
net basis, or to realize the asset and settle the
liability simultaneously.
Deferred income tax assets and liabilities are
recognized for all temporary differences arising
between the tax base of assets and liabilities and
their carrying amounts in the financial statements
except when the deferred income tax arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and
affects neither accounting nor taxable profit or
loss at the time of the transaction. Deferred tax
assets and liabilities are reviewed at each
reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit
will be realized.
Deferred income tax assets and liabilities are
measured using tax rates and tax laws that have
been enacted or substantively enacted by the
balance sheet date and are expected to apply to
taxable income in the years in which those
temporary differences are expected to be
recovered or settled. The effect of changes in tax
rates on deferred income tax assets and liabilities
is recognized as income or expense in the period
that includes the enactment or the substantive
enactment date. A deferred income tax asset is
recognized to the extent that it is probable that
future taxable profit will be available against
which the deductible temporary differences and
tax losses can be utilized.
Pursuant to Taxation Laws (Amendment)
Ordinance 2019, the company has opted to pay
Income Tax as provided under Section 115BAA of
the Income Tax Act, 1961.
2.7 Borrowing Costs
Borrowing costs that are directly attributable to the
acquisition, construction or production of a
qualifying asset are capitalized as part of the cost
of the asset. Other borrowing costs are recognized
as an expense in the period in which they are
incurred. Borrowing costs consist of interest and
other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also
includes exchange differences to the extent
regarded as an adjustment to the borrowing costs.
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