s. Provisions
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. Provisions (excluding retirement benefits) are determined based on the
best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.
t. 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.
A. Financial Assets:
a. Initial recognition and measurement: All financial assets are recognised initially at fair value.
Transaction costs that are attributable to the acquisition of the financial asset which are not at
Fair Value Through Profit and Loss Account are adjusted to fair value on initial recognition.
Purchases or sales of financial assets are recognised on the settlement date i.e. the date that
the Company settles to purchase or sell the asset.
b. Subsequent measurement: For purposes of subsequent measurement, financial assets are
classified in four categories:
i. Financial Assets measured at amortised cost:
A "financial asset" is measured at the amortised cost if both the following conditions are
met:
- The asset is held with an objective of collecting contractual cash flows
- Contractual terms of the asset give rise on specified dates to cash flows that are "solely
payments of principal and interest" [SPPI] on the principal amount outstanding. After
initial measurement, such financial assets are subsequently measured at amortised
cost using the effective interest rate [EIR] method. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included in finance income in
the Statement of Profit and Loss. The losses arising from impairment are recognised
in the Statement of profit and loss.
ii. Financial Assets at fair value through other comprehensive income [FVTOCI]:
A 'financial asset' is classified as at the FVTOCI if both of the following criteria are met:
- The asset is held with objective of both for collecting contractual cash flows and
selling the financial assets
- The asset's contractual cash flows represent SPPI.
Financial Assets 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 OCI.
However, the Company recognizes interest income, impairment losses & reversals and
foreign exchange gain or loss in the Statement of Profit and Loss. On derecognition of the
asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity
to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is
reported as interest income using the EIR method.
iii. Financial Assets at fair value through profit or loss [FVTPL]:
Financial assets, which are not classified in any of the above categories are measured at
FVTPL.
iv. Equity instruments:
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments
which are held for trading are classified as at FVTPL. For all other equity instruments,
the Company may make an irrevocable election to present subsequent changes in the
fair value in other comprehensive income. The Company has made such election on an
instrument by instrument basis. The classification is made on initial recognition and is
irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then
all fair value changes on the instrument, excluding dividends, are recognized in the OCI.
There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on
sale of investment.
However, the Company may transfer the cumulative gain or loss within equity. Equity
instruments included within the FVTPL category are measured at fair value with all
changes recognized in the Statement of Profit and Loss.
v. Investments in subsidiaries and joint ventures:
I nvestments in subsidiaries and joint ventures are carried at cost less accumulated
impairment losses, if any. Where an indication of impairment exists, the carrying amount
of the investment is assessed and written down immediately to its recoverable amount.
On disposal of investments in subsidiaries and joint ventures, the difference between
net disposal proceeds and the carrying amounts are recognised in the statement of profit
and loss. Upon first-time adoption of Ind AS, the Company has elected to measure its
investments in subsidiaries and joint ventures at the Previous GAAP carrying amount as
its deemed cost on the date of transition to Ind AS i.e., April 1, 2015.
c. Derecognition:
A financial asset [or, where applicable, a part of a financial asset] is primarily derecognised
[i.e. removed from the Company's balance sheet] when:
i. The rights to receive cash flows from the asset have expired, or
ii. The Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a
third party under a 'pass-through' arrangement and either
[a] the Company has transferred substantially all the risks and rewards of the asset, or
[b] the Company has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks
and rewards of ownership. When it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control of the asset, the Company continues
to recognise the transferred asset to the extent of the Company's continuing involvement.
In that case, the Company also recognises an associated liability. The transferred asset and
the associated liability are measured on a basis that reflects the rights and obligations that
the Company has retained. When the Company has transferred the risks and rewards of
ownership of the financial asset, the same is derecognised.
d. Impairment of financial assets:
In accordance with Ind AS 109, the Company applies expected credit loss [ECL] model for
measurement and recognition of impairment loss on the following financial assets and credit
risk exposure:
i. Financial assets that are debt instruments, and are measured at amortised cost
ii. Trade receivables or any contractual right to receive cash or another financial asset
iii. Financial assets that are debt instruments and are measured as at FVTOCI. The Company
follows 'simplified approach' for recognition of impairment loss allowance on Point b
above.
The application of simplified approach does not require the Company to track changes in
credit risk. Rather, it requires the Company to recognise the impairment loss allowance based
on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of
impairment loss on other financial assets and risk exposure, the Company determines that
whether there has been a significant increase in the credit risk since initial recognition. If
credit risk has not increased significantly, 12-month ECL is used to provide for impairment
loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over
the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime
ECL which results from default events that are possible within 12 months after the reporting
date. ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive [i.e., all
cash shortfalls], discounted at the original EIR. ECL impairment loss allowance [or reversal]
is recognized as expense/ income in the Statement of profit and loss. The balance sheet
presentation for various financial instruments is described below:
Financial assets measured as at amortised cost and contractual revenue receivables: ECL
is presented as an allowance, i.e., as an integral part of the measurement of those assets
in the balance sheet, which reduces the net carrying amount. Until the asset meets write¬
off criteria, the Company does not reduce impairment allowance from the gross carrying
amount. For assessing increase in credit risk and impairment loss, the Company combines
financial instruments on the basis of shared credit risk characteristics.
B. Financial Liabilities:
a. Initial recognition and measurement:
All financial liabilities are recognised at fair value and in case of borrowings, net of directly
attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit
and Loss as finance cost.
b. Subsequent measurement:
Subsequently all financial liabilities are measured as amortised cost, using EIR method. Gains
and losses are recognised in Statement of profit and loss when the liabilities are derecognised
as well as through the EIR amortisation process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included as finance costs in the Statement of profit and loss.
c. Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of profit and loss.
d. Embedded derivatives:
An embedded derivative is a component of a hybrid [combined] instrument that also includes
a non-derivative host contract - with the effect that some of the cash flows of the combined
instrument vary in a way similar to a standalone derivative. Derivatives embedded in all
other host contracts are accounted for as separate derivatives and recorded at fair value if
their economic characteristics and risks are not closely related to those of the host contracts
and the host contracts are not held for trading or designated at fair value though profit or loss.
These embedded derivatives are measured at fair value with changes in fair value recognised
in Statement of profit and loss, unless designated as effective hedging instruments.
C. Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
u. Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place either :
a. In the principal market for the asset or liability, or
b. In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair
value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic
best interest. A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its highest and best use
or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses 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. All assets and liabilities for which fair
value is measured or disclosed in the financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
a) Level 1 — Quoted [unadjusted] market prices in active markets for identical assets or
liabilities
b) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
c) Level 3 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is unobservable for assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation [based on the lowest
level input that is significant to the fair value measurement as a whole] at the end of each
reporting period.
v. Employee Benefits
(i) Short-term obligations
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 recognised in respect of employees' services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly within
12 months are measured as the present value of expected future payments to be made in respect
of services provided by employees up to the end of the reporting period using the projected unit
credit method. The benefits are discounted using the Government Securities (G-Sec) at the end
of the reporting period that have terms approximating to the terms of the related obligation. Re¬
measurements as a result of experience adjustments and changes in actuarial assumptions are
recognised in the Statement of Profit and Loss.
(iii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) Defined benefit plans such as gratuity
(b) Defined contribution plans such as provident fund and Superannuation
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is
the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The defined benefit obligation is calculated annually by actuaries using the
projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is included in employee benefit
expense in the Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive
income. They are included in retained earnings in the statement of changes in equity and in the
balance sheet.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund, Superannuation etc., are charged to the
Statement of Profit and Loss as incurred.
w. Contributed Equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
i. Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- The profit attributable to owners of the Company
- By the weighted average number of equity shares outstanding during the financial year,
adjusted for bonus elements in equity shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding
assuming the conversion of all dilutive potential equity shares.
ii. Dividends to shareholders
Annual dividend distribution to the shareholders is recognised as a liability in the period in which
the dividends are approved by shareholders. Any interim dividend paid is recognised on approval
by the board of directors. Dividend payable and corresponding tax on dividend distribution is
recognised directly in equity.
x. Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognised because it is not probable that
an outflow of resources will be required to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognised.
y. Leases
The Company has adopted IND AS 116, "Leases", effective April 1,2019, using modified retrospective
approach.
The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of an identified asset. The cost of the right-of-use
asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement date plus any initial direct costs incurred. The
right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use
assets is depreciated using the straight-line method from the commencement date over the shorter of
lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of lease payments that are not paid
at the commencement date of the lease. The lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined,
the Company uses incremental borrowing rate. For short term and low value leases, the Company
recognises the lease payments as an operating expense on a straight line basis over the lease term.
z. Equity settled share-based payments
Equity-settled share based payments to employees are measured at the fair value (i.e. excess of fair
value over the exercise price of the option) of the Employee Stock Options Plan at the grant date.
The fair value of option at the grant date is calculated by Black-Scholes model. In case the options
are granted to employees of the Company, the fair value determined at the grant date is expensed
on a straight-line basis over the vesting period, based on the Company's estimate of options that will
eventually vest, with a corresponding increase in equity.
The dilutive effect of outstanding options is reflected in determining the diluted earnings per share.
NOTE 2: Use of Estimates and Judgments
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the
Company and are based on historical experience and various other assumptions and factors (including expectations
of future events) that the Company believes to be reasonable under the existing circumstances. Differences between
actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that
date but provide additional evidence about conditions existing as at the reporting date.
1. Going Concern Assumption for Subsidiaries:
Warren Remedies Private Limited and FPP Holding Company, LLC had incurred a net loss of '3,809.05 lakhs and '2,741.25 lakhs respectively for
the year ended March 31, 2025 and its net worth has been fully eroded as at that date. However, the financial statements have been prepared on a
going concern basis, as the management is confident of the Company's ability to continue its operations and meet its obligations in the foreseeable
future, based on the following considerations:
- Management expects that the Company will achieve improved operating performance and positive cash flows in the near future through increased
sales and improved gross margins.
In view of the above factors, management believes that the Company will be able to realize its assets and discharge its liabilities in the normal course
of business. Accordingly, the financial statements have been prepared on a going concern basis and do not include any adjustments relating to the
recoverability and classification of recorded assets or to the amounts and classification of liabilities that may be necessary should the Company be
unable to continue as a going concern.
2. The Company holds a 26% equity interest in Jalansar Wind Energy Private Limited and Kanakal Wind Energy Private Limited, both of which are
private companies. Despite holding more than 20% of the equity share capital, the Company does not have any representation on the board of
directors, nor does it participate in financial or operating policy decisions of these investees. Further, the Company does not possess any contractual
or other rights that would confer significant influence, as defined under Ind AS 28 - Investments in Associates and Joint Ventures.
Accordingly, these investments have not been classified as associates. In line with the requirements of Ind AS 109 - Financial Instruments,
the investments are classified as equity instruments measured at cost, given that these are unquoted shares for which fair value cannot be
measured reliably.
Note 19 : Equity Share Capital : Contd.
C) Terms/rights attached to equity shares
The company has only one class of equity shares having a par value of ' 2/- per share. Each holder of equity
shares is entitled to one vote per share. All equity shares of the Company rank pari passu in all respects including
the right to dividend. The company declares and pays dividends in Indian rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2025, the amount of ' 0.20 per share on the face value of ' 2/- is proposed
to the equity shareholders of the Company (Previous year - ' 1.50 per share on face value of ' 2/- declared and
paid to the equity shareholders of the Company).
In the event of winding-up, subject to the rights of holders of shares issued upon special terms and conditions,
the holders of equity shares shall be entitled to receive remaining assets, if any, in proportion to the number of
shares held at the time of commencement of winding-up.
The description of the nature and purpose of each reserve within equity as follows :
Capital Reserve :
The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company's own equity
instruments to capital reserve.
Securities Premium :
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with
the provision of the Companies Act, 2013.
Employee Stock Options Outstanding Account :
The fair value of the equity-settled share based payment transactions with employees is recognised in standalone
statement of profit and loss with corresponding credit to Employee Stock Options Outstanding Account.
General Reserve :
The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
As the general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of
profit and loss.
Retained Earnings :
Retained Earnings are the profits that the Company has earned till date less any transfer to general reserve, dividends
or other distributions paid to shareholders.
Critical judgements in calculating amounts
When a customer has a right to return the product within a given period, the company recognises a provision for sales
return ' 1,682.36 lakhs as at March 31,2025 (March 31, 2024 - ' 1,900.60 lakhs). This is measured on the previous
history of sales return. Revenue is adjusted for the expected value of the returns and cost of sales & Inventory are
adjusted for the value of the corresponding goods to be returned.
Additional disclosures as required by Ind AS 115
Disaggregate revenue information
The table below presents disaggregated revenue information from contracts with customers for the year ended March
31, 2025. The company believes that this disaggregation reasonably depicts how the nature, amount, timing and
uncertainty of revenue and cash flows are affected by economic factors.
Note 40 : Employee benefit obligations
As required by IND AS 19 'Employee benefits' the disclosures are as under :
(i) Defined benefit plans
a. Leave obligations
The leave obligations cover the company's liability for sick and earned leave.
The amount of the provision of ' 288.49 lakhs (March 31, 2024 - ' 250.68 lakhs) is presented as current,
since the company does not have an unconditional right to defer settlement for any of these obligations.
However, based on past experience, the company does not expect all employees to take the full amount of
accrued leave or require payment within the next 12 months and therefore provision is made on the basis of
actuarial valuation obtained.
b. Post-employment obligations
i. Gratuity
The company provides gratuity for employees in India as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount
of gratuity payable on retirement/termination is the employees last drawn basic salary per month
computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity
plan is a funded plan and the company makes contributions to recognized funds in India. The company
maintains a target level of funding to be maintained over a period of time based on estimations of
expected gratuity payments.
(ii) Defined contribution plans
a. Provident Fund
The company also has certain defined contribution plans. Contributions are made to provident fund in India
for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered
provident fund administered by the government. The obligation of the company is limited to the amount
contributed and it has no further contractual nor any constructive obligation. The expense recognized during
the period towards defined contribution plan is ' 2,488.66 lakhs (March 31,2024 - ' 2,535.77 lakhs).
b. Superannuation
The company contributed ' 138.78 lakhs (March 31, 2024 - ' 131.06 lakhs) to the superannuation plan.
The same has been recognized in the Statement of profit and loss account under the head employee benefit
expenses.
Level 1 : Hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments
and mutual funds that have quoted price. The mutual funds are valued using the closing NAV.
Level 2 : The fair value of financial instruments that are not traded in an active market (like forward contract) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible
on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3. This is the case for unlisted equity securities etc. included in level 3.
__)
This section explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining
fair value, the company has classified its financial instruments into the three levels prescribed under the accounting
standard. An explanation of each level follows underneath the table.
Note 43 : Capital Management
(a) Risk management
The company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern
and to optimise returns to our shareholders.
The capital structure of the company is based on management's judgement of the appropriate balance of key
elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to
risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of
dividends paid to shareholders, return capital to shareholders or issue new shares.
The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to
maintain investor, creditors and market confidence and to sustain future development and growth of its business.
The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
The company monitors capital on the basis of the following gearing ratio : Net debt (total borrowings net of cash
and cash equivalents) divided by Total Equity.
Note 44 : Segment Information
(a) Description of segments and principal activities
The company has only one reporting segment of its business i.e. Pharmaceutical, wherein the company's strategic
steering committee, consisting of the chief executive officer, the chief financial officer and the manager for
corporate planning, examines the group's performance both from a product and geographic perspective.
The steering committee primarily uses a measure of adjusted earnings before other income, finance cost, tax,
depreciation and amortisation (EBITDA, see below) to assess the performance of the operating segments. However,
the steering committee also receives information about the segment's revenue and assets on a monthly basis
(b) Adjusted EBITDA
Adjusted EBITDA excludes discontinued operations and the effects of significant items of income and expenditure
which may have an impact on the quality of earnings such as restructuring costs, impairments when the impairment
is the result of an isolated, non-recurring event. It also excludes the effects of share-based payments and gains or
losses on financial instruments.
Interest income and finance cost are not allocated to segments, as this type of activity is driven by the central
treasury function, which manages the cash position of the company.
Note 51 : FINANCIAL RISK MANAGEMENT
Financial risk management objectives and policies
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company's financial risk management policy is set by the Audit Committee of the Board of Director.
Market risk is the risk of loss of future earnings, 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 currency exchange rates, equity prices and other market changes that affect market risk sensitive
instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and
deposits, foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through a Finance department, which evaluates and exercises independent
control over the entire process of market risk management. The Finance department recommend the risk management
objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this
department include management of cash resources, implementing hedging strategies for foreign currency exposures
like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and
policies.
Market Risk- 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 income
and interest expenses and to manage the interest rate risk, finance department performs a comprehensive corporate
interest rate risk management policy by balancing the proportion of fixed rate and floating rate financial instruments
in its total portfolio.
According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities,
the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was
outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally
to key management personnel and represents management's assessment of the reasonably possible change in interest
rates.
Market Risk- Foreign currency risk.
The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions,
primarily with respect to USD, EURO, GBP and AUD. Foreign exchange risk arises from future commercial transactions
and recognised assets and liabilities denominated in a currency that is not the company's functional currency (INR).
Note 51 : FINANCIAL RISK MANAGEMENT : Contd.
The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is
to minimise the volatility of the INR cash flows of highly probable forecast transactions.
The company risk management policy is to hedge forecasted foreign currency sales for the subsequent 24 to 60
months. As per the risk management policy, foreign exchange forward contracts are taken to hedge forecasted sales.
The company also imports certain materials and Capital Goods which are denominated in USD, EURO, GBP, CHF,
JPY, CNY which exposes the company to foreign currency risk to minimise the risk of imports, the company naturally
hedges its imports.
The spot component of forward contracts is determined with reference to relevant spot market exchange rates. The
differential between the contracted forward rate and the spot market exchange rate is defined as the forward points.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To
manage this, the Company periodically assesses financial reliability of customer and other counter parties, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial
assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company consider the probability of default upon initial recognition of asset and whether there has been a
significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a
significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date
with the risk of default as at the date of initial recognition. It considers reasonable and supportive forward looking
information such as:
• Actual or expected significant adverse changes in business,
• Actual or expected significant changes in the operating results of the counterparty,
• Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to
meet its obligations,
• Significant increase in credit risk on other financial instruments of the same counterparty,
• Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party
guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage
in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues
to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are
recognized as income in the statement of Profit and Loss.
The Company measures the expected credit loss of trade receivables and loan from individual customer based on
historical trend, industry practices and the business environment in which the entity operates. Loss rates are based
on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not
material hence no additional provision considered.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility
in funding by maintaining availability under committed credit lines. Management monitor rolling forecasts of the
Company's liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on
the basis of expected cash flows.
(i) Financing arrangements
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
Legal Case -
a) MR's / Petitioners have filed a defamation suit against the company under Section 38 / Section 40 of the Specific
Relief Act 1963 and the matter is pending before civil court of Jalandhar jurisdiction for ' 5 Lakhs each. Total
Contingent liability against the suit is ' 20 Lakhs (Previous Year - ' 20 Lakhs)
b) Chartered of Demand (COD) case filed by Union FMRAI (Federation of Medical and Sales Representatives of
India) for revision of field employee's salary which is pending since 2012 in Industrial Tribunal Mumbai in case
bearing no. ITR No. 2 of 2012 FMRAI V/s Indoco Remedies Limited, Mumbai. Total Contingent liability against
the suit is ' 30 Lakhs (Previous Year - ' 30 Lakhs)
* Income Tax demand comprises of
a) ' 5.98 lakhs (Previous year - ' 5.98 lakhs) appearing as TDS defaults on account of short Deduction / Short
Payment & Interest thereon etc. of various assessment years.
b) ' 82.15 lakhs (Previous year - ' 82.15 lakhs) demand issued by AO on account of Regular Assessment u/s 143(3)
for AY 2018-19. The Company has preferred the appeal against the aggrieved demand order before CIT(A) which
is yet to be heard. The said demand is as per rectification order u/s 154 passed in favour of the company due to
correct calculation of book profit u/s 115JB and allowing MAT credit u/s 115JAA.
c) ' 38.12 lakhs (Previous year - ' 38.12 lakhs) demand issued by AO on account of proceedings u/s 201(1) /
201(1A) of the Income tax Act for AY 2019-20. The Company has preferred the appeal against the aggrieved
demand order before CIT(A) which is yet to be heard.
d) ' 260.22 lakhs (Previous year - ' 260.22 lakhs) demand issued by AO on account of Regular Assessment u/s
143(3) for AY 2022-23. The Company has preferred the appeal against the aggrieved demand order before CIT(A)
which is yet to be heard.
e) ' 89.24 lakhs (Previous year - ' NIL) demand issued by AO on account of Regular Assessment u/s 143(3) for AY
2023-24. The Company has preferred the appeal against the aggrieved demand order before CIT(A) which is yet
to be heard.
** Sales Tax demand comprises of
(I) Vijayawada A.P.Sales Tax :-
a) ' 12.83 lakhs (Previous year - ' 12.83 lakhs) in respect of order from Asst. Commissioner (CT) Audit, Vijayawada
for classification dispute for the period June 14 to March 2016. The Company has preferred an appeal before
Appellate Deputy Commissioner (CT), Vijayawada which was dismissed. The Company preferred appeal to AP
VAT Appellate Tribunal Vishakhapatnam which is yet to be heard.
b) ' 3.21 lakhs (Previous year - ' 3.21 lakhs) is penalty imposed on demand pertaining to order from Asst.
Commissioner (CT) Audit, Vijayawada for classification dispute for the period June 14 to March 2016. The
Company has preferred an appeal before Appellate Deputy Commissioner (CT), Vijayawada which was dismissed.
The Company preferred appeal to AP VAT Appellate Tribunal Vishakhapatnam which is yet to be heard.
(II) Goa Sales Tax :-
c) ' 46.32 lakhs (Previous year - ' 46.32 lakhs) as the amount of demand (including penalty) raised by sales tax
officer for Financial Year 2007-08, 2009-10 and 2013-14 on account of input credit of entry tax. The Company
has filed appeal before Asst. Commissioner of Commercial Taxes, who has set aside the previous order and
directed Assessing Officer for Re-assessment.
*** Excise tax demand comprises of
a) Company appeal is pending before CESTAT for wrong availment of notification on exempted goods ' 0.66 lakhs
(Previous year - ' 0.66 lakhs).
b) Appeal pending before Divisional Dy. Commissioner, Boisar for classification dispute ' 5.04 lakhs (Previous year
- ' 5.04 lakhs).
c) CENVAT credit on input service ' NIL (Previous year - ' NIL), appeal pending before CESTAT, Mumbai.
d) Company appeal is pending before Divisional Dy. Commissioner, Mumbai for wrong availment of CENVAT
credit ' 0.79 lakhs (Previous year - ' 0.79 lakhs).
e) Central excise department is in appeal before Supreme Court for Differential duty on intermixture of vitamins /
minerals amounting to ' 2.91 lakhs (Previous year - ' 2.91 lakhs).
f) CENVAT credit on input service ' 494.42 lakhs (Previous year - ' 494.42 lakhs), appeal pending before CESTAT,
Mumbai.
g) Company appeal is pending before CESTAT for CENVAT credit availment on physician sample amounting to
' 0.20 lakhs (Previous year - ' 0.20 lakhs).
h) Central excise department is in appeal at Supreme Court for valuation of physician sample ' 11.20 lakhs (Previous
year - ' 11.20 lakhs).
i) ' 139.78 lakhs (Previous year - ' 139.78 lakhs) pending before CESTAT, Mumbai for Exempted product-
Allopurinol Value Based Duty Reversal.
**** GST demand comprises of
a) The Company received Order under section 73 from Office of the Dy. Comm, of State Tax for tax period
2017-18 of '. 4.67 lakhs (Previous year - ' 4.99 lakhs). The Company has preferred the appeal against the
aggrieved demand order before Appellate Authority which is yet to be heard.
b) To regularised the Transitional ITC availed through GSTR-3B, The Company has file Revised Tran-1 Return as
per the directions issued by Hon'ble Supreme Court vide Order Dated 22.07.2022 in the matter of Union Bank
of India Vs. Filco Trade Centre Pvt. Ltd. SLP (C) No. 32709-32710 / 2018. The Company has received State wise
orders in this case for rejection of revise Tran-1 credit. Details are as under:-
The Company has filed appeal in the above mentioned orders at respective state Appellate Authorities against
rejection of revised Tran-1 Credit.
c) The Company received Order Dt. October 31, 2023 from the Office of the Jt. Commissioner CGST and Central
Excise Mumbai East Commissionerate under section 73(1) of CGST Act, 2017 for wrong availment of Tran-
1 Credit. The Company has distributed this Tran-1 Credit to its various units registered under different states.
The Company has also received adverse order in those states also and demand order was issued by State GST
authorities for availment of Tran-1 credit (as mentioned in para c above). Hence this is duplicate addition by
Central as well as by State GST authorities for the same issue of availment of Tran-1 credit. The Company has
preferred appeal against the aggrieved demand order before Appellate Authority which is passed in favour of the
Company hence demand reduced to ' NIL during the year (Previous year - ' 631.75 lakhs)
d) The Company received Order Dt. 29th November, 2023 from the Office of the Joint Commissioner, GST & CX,
Mumbai East under section 73(1) of CGST Act, 2017 of ' 75.37 lakhs (Interest ' 32.39 lakhs Penalty ' 42.97
lakhs) (Previous year - ' 75.37 lakhs) for the period from July 2018 to January 2019 during which the Company
has availed excess ITC as per Order. The Company has preferred appeal against the aggrieved demand order
before Appellate Authority which is pending.
e) The Company received SCN from Office of the Dy. Commissioner of State Tax, Patna, Bihar of ' 2.93 lakhs
(Previous year - ' 2.93 lakhs). The assessment is under progress.
f) The Company received Order from Office of the Assistant Commissioner LGSTO 062- Bengaluru, Karnataka of
' 0.75 lakhs (Previous year - ' 0.75 lakhs). The Company has preferred appeal against the aggrieved demand
order before Appellate Authority which is pending.
g) The Company received Order from Office of the Deputy Commissioner of State Tax Mumbai Maharashtra of
' 263.21 lakhs (Previous year - ' 263.21 lakhs) including interest for the year 2018-19. The Company has
received adverse order for the same issue of Tran-1 credit which is mentioned in Para c and Para d above. Hence
this is duplicate addition by Central as well as by State GST authorities for the same issue of availment of Tran-1
credit. The Company has preferred appeal against the aggrieved demand order before Appellate Authority which
is pending.
h) The Company received Order from Office of the Dy. Commissioner Dehradun Uttarakhand of ' 1.50 lakhs
(Previous year - ' 1.50 lakhs) for the year 2017-18. The Company has preferred appeal against the aggrieved
demand order before Appellate Authority which is pending.
i) The Company received Order from Office of the Commissioner, Goa of ' 1584,31 lakhs (Previous year -
' 1584,31 lakhs) for the year 2017-18. The Company has preferred appeal against the aggrieved demand order
before Appellate Authority which is pending,
j) The Company received Order from Office of the Dy. Commissioner, Jaipur, Rajasthan of ' 13,46 lakhs (Previous
year - ' NIL) for the year 2019-20, The Company has preferred appeal against the aggrieved demand order before
Appellate Authority which is pending,
k) The Company received Intimation from the office of the Joint Commissioner of State Tax, Special Circle, Ranchi,
Jharkhand of ' 2,82 lakhs (Previous year - ' NIL) for the year 2020-21, The Company will be taking all necessary
actions to present and defend its case before the relevant authorities and address the demand and penalties, if
any,
l) The Company received Notice from Office of the Asst Commissioner of State Tax, Raipur, Chhattisgarh of ' 9,99
lakhs (Previous year - ' NIL) for the year 2023-24, The Company will be taking all necessary actions to present
and defend its case before the relevant authorities and address the demand and penalties, if any,
m) The Company received Order from Office of the Deputy Commissioner, West Bengal of ' 15,85 lakhs (Previous
year - ' NIL) for the year 2020-21, The Company will be taking all necessary actions to present and defend its
case before the relevant authorities and address the demand and penalties, if any,
n) The Company received Order from Office of the Asst, Commissioner, Dehradun of ' 0,39 lakhs (Previous year -
' NIL) for the year 2020-21, The Company will be taking all necessary actions to present and defend its case
before the relevant authorities and address the demand and penalties, if any,
o) The Company received Order from Office of the Asst, Commissioner of State Tax, Guwahati Assam of ' 12,49
lakhs (Previous year - ' NIL) for the year 2018-19, The Company has preferred appeal against the aggrieved
demand order before Appellate Authority which is pending,
The above information regarding Micro Enterprises and small Enterprises has been determined on the basis of
information available with the Company, No interest has been accrued on delayed payments, if any.
Note 57
Previous year's figures have been regrouped and reclassified wherever necessary.
As per our Report of even date attached For and on behalf of the Board of Directors
Sd/- Sd/-
For Gokhale & Sathe Aditi Panandikar Sundeep V Bambolkar
Chartered Accountants Managing Director Jt. Managing Director
Firm Registration no.: 103264W DIN : 00179113 DIN : 00176613
Sd/- Sd/- Sd/-
Atul Kale Pramod Ghorpade Ramanathan Hariharan
Partner Chief Financial Officer Company Secretary & Head-Legal
M. No. 109947 M. No. A20593
Mumbai : May 22, 2025
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