Note No. -11. CORPORATE INFORMATION
Venus Remedies Limited (the 'Company') is a public limited Company having its registered office at SCO 857, 2nd Floor, C. No. 10 NAC Manimajra Chandigarh, 160101 and is listed on the Bombay Stock Exchange Limited (BSE), National Stock Exchange of India (NSE). The Company is one of the handful player in pharmaceutical sector to launch injectables globally. It has world-class manufacturing facilities in Panchkula and Baddi (in India), and research and development centre under the name of Venus Medicine Research Centre (in India).
MATERIAL ACCOUNTING POLICIES2. BASIS OF ACCOUNTING AND STATEMENT OF COMPLIANCE
These standalone financial statements of the company have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards (hereinafter referred to as the "Ind AS") as notified under section 133 of the Companies Act 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules as amended from time to time and other relevant provisions of the Act and accounting principles generally accepted in India.
3. FUNCTIONAL AND PRESENTATION CURRENCY
These standalone financial statements are presented in Indian rupees which is the functional currency of the Company. The figures in the Standalone Balance Sheet and Standalone Statement of Profit & Loss for the year have been rounded off to the nearest lakhs unless otherwise indicated.
4. BASIS OF MEASUREMENT
These standalone financial statements are prepared under the historical cost convention, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies below and on the basis of going concern. All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle. Based on
the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months.
5. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. Management believes that estimates used in the preparation of the financial statement are prudent and reasonable. Examples of such estimates include valuation of inventories, sales return, employee's costs, assessment of recoverable amounts of deferred tax assets, provisions against litigations and contingencies:
• Inventories
The Company estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future demand or other market-driven changes that may reduce future selling prices.
• Recoverability of advances / receivables
At each balance sheet date, based on historical default rates observed over expected life, the Management assesses the expected credit losses on outstanding receivables and advances.
• Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company by their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
6. RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company:
7. SUMMARY OF MATERIAL ACCOUNTING POLICIES
The financial statements have been prepared using the material accounting policies and measurement bases summarized below.
a. Current / Non-Current Classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III of the Act. Based on the nature of products & time between the acquisition of the assets for processing and there are realisation in cash & cash equivalents, the company has ascertained its operating cycle upto 12 months for the purpose of current/non -current classification of assets & liabilities.
b. Property, Plant and Equipment & Depreciation
• All items of Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment losses, if any. The cost of an item of property, plant and equipment comprises:
> Its purchase price, including import duties and non - refundable purchase taxes after deducting trade discounts and rebates.
> Expenses incurred up to date of putting them in commercial use.
• The Company is following the useful life method of depreciation as per the useful life as specified in Schedule II to the Act. The Carrying amount of assets is being depreciated over the remaining useful life of the assets. On assets sold, discarded etc, during the year depreciation is provided up to the date of sale/discard. Depreciation is calculated on a straightline basis over the estimated useful lives of the assets.
• Useful life is reviewed at each financial year.
• Carrying value of PPE are reviewed for impairment when events or changes in circumstances indicates that the carrying value may not be recoverable.
• Capital work in progress in respect of assets which are not ready for their intended use are carried at cost comprising of direct costs related incidental expenses and attributable interest.
• The Company periodically reviews its Capital work-in-progress and in case of abandoned works, provision for unserviceable cost is provided for, as required, basis the technical assessment. Further, provisions made are reviewed at regular intervals and in case work has been subsequently taken up, then provision earlier provided for is written back to the extent the same is no longer required.
• The company has not taken any residual value of Property, Plant and Equipment.
c. Intangible Assets
• Intangible assets are stated at cost less accumulated amortisation and impairment losses, if any. The company amortizes its intangible assets over a period of 20 years.
• The amortization period and the amortization method of intangible assets with a finite useful life are reviewed at each financial year end and adjusted prospectively, wherever required.
• Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in the specific asset to which they relate.
• Research cost & related expenditures are recognised in the Standalone Statement of Profit and Loss in the period in which such expenditure is incurred.
• Intangible Assets with finite lives are amortized on a straight-line basis over the estimated useful
economic life. The amortization expense on intangible assets with finite lives are recognized in the Standalone Statement of Profit and Loss.
d. Investment in Subsidiary
The company has elected to recognise its investments in equity instruments in subsidiaries at cost less impairment loss, if any in accordance with option available in Ind AS 27 'Separate Financial Statements'.
e. Inventories
Inventories are valued at the lower of cost and net realisable value and Cost is determined on First in First Out (FIFO) basis.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
• Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
• Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity. Cost is determined on first-in, first-out basis.
• Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
Spares and consumables: - At cost.
f. Trade Receivables
I n respect of trade receivables, the Company applies the simplified approach of Ind AS 109 'Financial Instruments', which requires measurement of loss allowance 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.
g. Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into
known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
h. 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.
Initial recognition and measurement
• Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs through profit or loss.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue cost.
Subsequent measurement of financial assets and financial liabilities:
• All Financial liabilities and Financial Assets are subsequently measured at Fair value through profit & loss.
• Other than above, 'debt instrument' is measured as at FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the instrument give rise on specified dates to cash flows that are SPPI on the principal amount outstanding.
Debt instruments included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI) and On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to standalone profit or loss.
Derecognition
The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
The Company derecogni ses financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired.
The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, shall be recognised in the Standalone Statement of Profit and Loss.
i. Revenue Recognition
• Revenue is recognised when control of the products being sold has transferred to the customer and when there are no longer any unfulfilled obligations to the customer. This is generally on delivery to the customer but depending on individual customer terms, this can be at the time of dispatch, delivery or upon formal customer acceptance. This is considered the appropriate point where the performance obligations in our contracts are satisfied as company no longer have control over the inventory Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and Indirect Taxes. No element of financing is present in the pricing arrangement. Settlement terms for credit sales ranging up to 120 days.
• Dividend income is recognized at the time when the right to receive is established by the entity.
• Other income is accounted for on mercantile basis unless otherwise stated in other IND AS.
j. Employee Benefits
• Current employee benefits
a) Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be incurred when the liabilities are settled.
b) Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
• Post Retirement Employee Benefits
a) Post- retirement benefits plans are determined on the basis of an actuary valuation by an independent actuary. Liability recognised in the Standalone Balance Sheet in respect of defined benefit obligation is the present value of the defined benefit obligation at the end of reporting period.
b) The company has adopted a policy of compensated earned leave which are accumulating in nature and is determined by actuarial valuation at each reporting date using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date.
c) Gratuity liability accounted for on the basis of actuarial valuation as
per Ind AS 19 'Employee Benefits'. Liability recognized in the Standalone Balance Sheet in respect of gratuity is the present value of the defined benefit obligation at the end of each reporting period. The present value of defined benefit is determined by discounting the estimated future cash outflows by reference to market yield at the end of each reporting period. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation. This cost is included in employee benefit expense in the Standalone Statement of Profit and Loss. Actuarial gain / loss pertaining to gratuity are accounted for as OCI.
k. Foreign Currency Transactions
• Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
• Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Any income/expense arising from foreign currency transactions is dealt in the standalone statement of profit and loss for the year.
l. Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of costs of such assets till such time as the assets is ready for its intended use. All other borrowing costs are recognized as an expense in the period in which incurred.
m. Government Grants
• The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to revenue are recognized on a systematic basis in the Standalone Statement of Profit and Loss over the period necessary to match them with the related costs which they are intended to compensate.
Income from export incentives such as duty drawback, merchandise export import scheme are recognized on accrual basis.
Income from incentives other than above are also recognised on cash basis.
n. Provisions, Contingent Liabilities & Contingent Assets
• Provisions involving substantial degree of estimation in management are recognized when there is present obligation as a result of past events, and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes for:
a) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or
b) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed except when realization of income is virtually certain, related asset is disclosed.
o. Income Tax
Income tax expenses comprises current and deferred tax. It is recognized in the Standalone Statement of Profit and Loss.
• Current Tax: Provision is made for income tax based on the liability as computed after taking credit for allowance and exemptions. Adjustments in books are made only after the completion of the assessment.
• Deferred Tax: Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for the taxation purposes. Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
p. Earnings per Share
Basic EPS amounts are calculated by dividing the profit or loss for the year attributable to equity holders of the Company by the weighted
average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares, unless the effect of potential dilutive equity shares is anti-dilutive.
q. Operating Cycle
Based on the nature of product /activities of the company and the 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.
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