I. Provisions (other than for employee benefits)
A provision is recognised 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. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
J. Revenue
The Company earns revenue from sale of products in pain management, congestion management, beverages & hygiene. The Company also earns revenue from sale of services in pain management.
Disaggregation of revenue
The Company disaggregates revenue from contracts with customers by the nature of sale i.e. manufactured and traded goods and based on the reporting segments based on the information reviewed by the CODM. The Company believes that this disaggregation is the best description on how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors. Also refer note 23.
Variable consideration
If the consideration in a contract includes the variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
Stockist incentives, claims and schemes
Arrangements with customers includes a provision for stockist incentives, discount schemes and claims. In those instances, where there is a valid expectation from the customers to receive a incentive / discount / recover claims, the amount of variable consideration which is included in the transaction price may be constrained, unless included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognised under the arrangement will not occur in a future period. The Company applies the most likely amount method for determining the stockist incentives, discount schemes and claims.
Contract balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer, before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets - note 3C -financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Performance obligations and revenue recognition policies
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services.
The following details provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.
i) Sale of goods and services
Nature and timing of satisfaction of performance obligations, including significant payment terms
Revenue from sale of goods is recognized when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations, depending on individual terms. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms. Revenue towards satisfaction of performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of the goods sold and services rendered is net of variable consideration on account of stockist incentives, discount schemes and claims offered by the Company as part of the contract and any taxes or duties collected on behalf of the Government such as goods and services tax, etc. Accumulated experience is used to estimate provision for stockist incentives, discount schemes and claims. Revenue is recognized to the extent that it is probable a significant reversal will not occur. Invoice are usually payable within the mutually agreed credit period depending on individual customer terms.
Revenue from services is recognised in the accounting period in which the services are rendered.
ii) Export incentives
Export incentives are recognized when the right to receive credit as per the terms of the scheme is established in respect of the exports made and when there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Determination of transaction price and allocation to performance obligation
Revenue is measured based on the transaction price, which is the consideration, adjusted for stockist incentives, discount schemes and claims if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Refer note 23 for reconciliation of revenue recognised with contracted price.
K. Leases
The Company assesses whether a contract contains a lease, at 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, the Company assesses whether: (1) the contract involves the use of an identified asset (2) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
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. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount(i.e. The higher of the fair value less cost to sell and the value-in-use)is determined on an individual asset basis unless the asset does not generate cashflows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit(CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
Ý fixed payments, including in-substance fixed payments;
Ý variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
Ý amounts expected to be payable under a residual value guarantee; and
Ý the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
The Company presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment' and lease liabilities separately in the balance sheet within 'Financial Liabilities'.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
L. Recognition of interest income or expense
Interest income or expense is recognised using the effective interest method.
The 'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability."
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability.
However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
M. Income tax
Income tax comprises current and deferred tax. It is recognised in statement of profit and loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered. Deferred tax assets 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 realised; such reductions are reversed when the probability of future taxable profits improves.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
N. Operating segment
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company. For the disclosure on reportable segments see note 37.
O. Cash and cash equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments.
P. Earnings per share
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit (or loss) attributable to the owners of the Company by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).
Diluted Earnings Per Share
Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share) after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share adjusted for the weighted average number of equity shares that would have been issued upon conversion of all dilutive potential equity shares.
Q. Current/ Non-current classification
The Company classifies an asset as current asset when:
- it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
- it holds the asset primarily for the purpose of trading;
- it expects to realise the asset within twelve months after the reporting period; or
- the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
- it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
- it holds the liability primarily for the purpose of trading;
- the liability is due to be settled within twelve months after the reporting period; or
- it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities are classified as non-current.
R. Contingent liability
Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
S. Recent pronouncements
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. For the year ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
c) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, capital redemption reserve, dividends or other distributions paid to shareholders.
d) Share based payment reserve
The Company has established equity settled share based payment plans for certain categories of employees of the Company. Refer note 31 for further details on this plan.
e) Treasury shares
When the ESOP trust purchases the Company's ordinary shares, the consideration paid including any directly attributable incremental cost is presented as a deduction from total equity, until they are cancelled, sold or reissued. When treasury shares are sold or reissued, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from the securities premium.
16 Capital management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. It sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirements are met through equity and cash generated through operations. The Company does not have any external borrowings. The Company monitors capital using a ratio of 'adjusted net debt' to 'total equity'. For this purpose, adjusted net debt is defined as total liabilities, comprising provisions, financial liabilities, other current liabilities less cash and cash equivalents. Total equity comprises all components of equity.
31 Share based payments
See accounting policy in Note 3(H)
During the financial year 2020-21, Amrutanjan's Board of Directors had approved the Amrutanjan Health Care Limited Employee Stock Option Scheme ('Scheme 2020') for the grant of stock options to the selected employees of the company. The Compensation Committee administers the plan through a trust established specifically for this purpose, called Amrutanjan Health Care Limited ESOP trust ('ESOP trust').
The ESOP Trust shall make additional purchase of equity shares of the Company using the proceeds from the loan obtained from the Company, other cash inflows from transfer of shares to employees under the ESOP Plan and shall subscribe, when allotted to such number of shares as is necessary for transferring to the employees. The Compensation Committee shall determine the exercise price which will not be less than the face value of the shares.
The trust had purchased Nil shares (2022-23 - Nil shares) from the market at an average rate of ' Nil (2022-23 -' Nil) per share amounting to ' Nil (2022-23 - ' Nil) and has sold / transferred 33,114 shares (2022-23 - 779 shares) amounting to '283.96 (2022-23 '2.75) at an average rate of '353 per share (2022-23 - '353 per share) respectively. The options vested during the current year has been transferred to the employees' account. The value of the shares in the Company held by the ESOP Trust has been disclosed as Treasury Shares in the statement of changes in equity. The assets and liabilities of the trust is accounted for as assets and liabilities of the entity on the basis that the trust is exclusively set up for the purpose of administering the ESOP plan of the Company.
Accordingly, the financial statements includes the ESOP trust's total assets (before accounting adjustments) of '168.57 as at March 31, 2024 ('448.22 as at March 31, 2023), total revenue (before accounting adjustments) of '2.09 ( for the year ended March 31, 2023 '2.18) and total net loss after tax (before accounting adjustments) of '161.29 (for the year ended March 31, 2023 '1.80) for the year ended on that date.
The options under this grant would have a term of vesting to the employees ranging from 1-3 years. The exercise window is for a 1 year period from the date of vesting. The vesting conditions include service terms of employees and performance of the Company, based on turnover criteria. These options are issued at a discount of '70 per share from the fair value on the date of grant, the exercise price is '353 per share.
C. Financial risk management
The Company's business activities are exposed to a variety of financial risks, namely credit risk, liquidity risk and market risk. The Company's management has the overall responsibility for establishing and governing the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the audit committee of the Company.
i. Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from Company's trade receivables and other financial assets.
Investments
The Company limits its exposure to credit risk by investing in debt securities and minimum investment being made in equity instruments. The credit worthiness of the counterparties of the investments made are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.
Trade receivables
The Company has developed guidelines for the management of credit risk from trade receivables. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.
Credit risk is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts that represents its estimate of incurred losses in respect of the Company's trade receivables.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses.
Other financial assets
Other financial assets comprises of deposits with bank and financial institutions and interest accrued on such deposits These deposits are held with credit worthy banks and financial institutions. The credit worthiness of such banks and financial institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.
Other financial assets also comprise of export benefits receivable and rental deposits given to lessors and Electricity deposit given to Electricity Board. The Company is confident of collection the amounts and is considered to good with low credit risk. The Company does not expect any losses from non-performance by these counter parties.
ii. Liquidity risks
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities. The Company approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.
Cash flow from operating activities provides the funds to service and finance the financial liabilities on a day-to-day basis.
The Company regularly monitors the rolling forecasts to ensure that it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.
iii. Market risks
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk).
Sensitivity analysis
Equity price risk All of the Company's listed equity investments are listed on the National Stock Exchange (NSE). For such investments classified as at FVTPL, the impact of a 2% increase in the market price of the shares at the reporting date on profit or loss would have been an increase of '0.09 after tax (31 March 2023: '0.04 after tax). An equal change in the opposite direction would have decreased profit or loss by '0.09 after tax (31 March 2023: '0.04 after tax).
Currency risk
The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which sales, purchase are denominated and the respective functional currencies of Company.
Foreign currency risk arise in transactions mainly from export of OTC products and import of raw materials and packing materials that gives rise to exchange rate fluctuation risk.
39 During the month of December 2022, the Company had received an anonymous whistle blower complaint alleging lapses by certain senior management employees including undue enrichment through marketing, advertising and procurement activities, ethical concerns, and conflict of interest etc. In this regard, the Company had initiated an independent forensic audit by external agencies on these alleged lapses. The draft investigation report of forensic audit dated 22 May 2023 has reported potential collusions with respect to marketing and advertising activities of the Company by certain employees, resulting into payments of potential kickbacks / commission aggregating to '8.65 to such employees from vendors onboarded during the previous financial year. The Company has terminated the services of those employees and vendors. There were no adverse findings with respect to activities related to procurement of raw materials, packing materials and logistics. The investigation in respect of contract / casual labour expenses were pending as at 31 March 2023. During the current year, the Company has completed the investigations and the final investigation reports dated 28 July 2023 and 01 August 2023 has reported potential irregularities of '7.66 with respect to contract / casual labour payments. The management believes that the impact of aforesaid matters are not material to the financial statements.
40 Other Statutory Information
a) The Company has not revalued its property, plant and equipment (including the right of use assets) and intangible assets.
b) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
c) The Company does not have any borrowings from banks or financial institutions that are secured against current assets.
d) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lenders.
e) Compliance with clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 with respect to layer of companies are not applicable to the Company.
f) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
g) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of companies beyond the statutory period.
h) The Company has not entered into any scheme of arrangement as per sections 230 to 237 of the Companies Act, 2013.
i) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
j) The Company has not received, from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
k) The Company does not have 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.
l) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
m) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and there are no long term contracts for which there are any material foreseeable losses.
42 Subsequent events
Subsequent to the balance sheet date, on 01 May 2024, the Board of Directors has approved the project to set up a new plant for manufacturing sanitary napkins.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Amrutanjan Health Care Limited
Firm's Registration Number : 101248W/W-100022 CIN : L24231TN1936PLC000017
R Kalyana Sundara Rajan S Sambhu Prasad Raja Venkataraman
Partner Chairman and Managing Director Director
Membership no: 221822 DIN: 00015729 DIN: 00669376
N Swaminathan M Srinivasan
Chief Financial Officer Company Secretary
PAN: BMVPS9607P Membership no. A10980
Place: Chennai Place: Chennai
Date: 23 May 2024 Date: 23 May 2024
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