2.17 Provisions and contingencies
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 not discounted to their
present value and 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. Contingent liabilities are
disclosed in the Notes.
2.18 R & D Expenditure
Revenue expenditure on research and development is charged
to Statement of Profit and Loss in the year in which it is incurred.
Capital expenditure on research and development is considered
as an addition to property, plant & equipment/ intangible assets.
2.19 Dividends
Provision shall be made in the accounts for the dividends
payable by the company as and when recommended by the
Board of Directors, pending approval of the share holders at
the Annual General Meeting.
2.20.1 Contingent liabilities
The Company has received various orders and notices from
tax and other judicial authorities in respect of direct taxes,
indirect taxes and labour matters. The outcome of these matters
have a material effect on the financial position, results of
operations or cash flows. The filing of suit or formal assertion
of a claim against the Company or the disclosure of any such
suit or assertions, does not automatically indicate that a
provision for a loss may be appropriate. Management regularly
analyses current information about these matters and makes
provision for probable losses including the estimate of legal
expense to resolve the matters. In their assessment
management considers the degree of probability of an
unfavourable outcome and the ability to make a sufficiently
reliable estimate of the amount of loss.
2.20.2 Going Concern Assumption
During the year ended 31 st March, 2025 Company has incurred
loss before tax of Rs.2692.40 lakhs as against loss before tax
of Rs.1972.84 lakhs during previous year ended 31st March,
2024. Total Liabilities exceeded its total assets by Rs.14623.88
Lakhs as on 31st March, 2025 compared to Rs.11921.67 Lakhs
as on 31st March, 2024. This financial position indicate that
material uncertainty exists that may cast significant doubt on
the Company's ability to continue as a going concern and
therefore the Company may be unable to realise its assets
and discharge its liabilities in the normal course of business.
The Company's management has carried out an assessment
of financial performance and has obtained confirmation from
our promoter M/s Ipca Laboratories Ltd., providing comfort of
financial support, as and when required to meet the Company's
liabilities. During the current financial year, the Company has
prepared strategic plan for next five years. Pursuant to the
plan, the Company continues to focus on various initiatives
including cost optimisation through operational efficiency,
rationalization of existing operations and increase in sales
volume. With continued efforts the Company expects to address
the material uncertainty in future. Accordingly the above
financial results have been prepared on a going concern basis
which contemplates realisation of assets and settlement of
liabilities in the normal course of business.
Contingent Liabilities :
The following contingent liabilities are not provided for.
(i) Income Tax: Various demands raised by the Income Tax
authorities for Tax liability of Rs.723.75 lakhs (Out of that
Amount of Rs. 197.28 Lakhs adjusted against IT Refunds
of later years) & Interest Rs.334.65 Lakhs (Out of that
Amount of Rs. 177.67 Lakhs adjusted against IT Refunds
of later years) for which the company filed an appeal with
Honourable High Court of Judicature at Hyderabad for the
State of Telangana and CIT (appeals). Previous Year Tax
liability of Rs.729.87 lakhs & Interest Rs.329.29 Lakhs
Customs Duty:
(ii) Advance licence : Various demands raised by Chennai
Customs authorities against Advance license (DEEC)
amounting to Rs.144.58 lakhs (Tax Amount of Rs.37.21
Lakhs & Interest of Rs.107.37 Lakhs), Out of that Amount
of Rs. 37.21 Lakhs deposited in favour of Commissioner of
customs (Seaport), Customs House, Chennai as " Paying
under Protest"
(iii) Employee Provident Fund: Damages u/s 14B
amounting to Rs. 129.93 lakhs (Rs. 76.07 lakhs for Vizag
Unit and Rs. 53.86 lakhs for Nellore Unit respectively) were
raised by PF authorities. Pending disposal of appeals, the
company has deposited an amount of Rs 17.50 Lacs based
on interim directions.
(iv) Employee State Insurance: Damages u/s 85B
amounting to Rs.18.30 lakhs, Interest u/s 39(5) amounting
to Rs.4.16 lakhs for Vizag unit were raised by ESIC
authorities for which the company filed an appeal with higher
authority.
NOTE- 31
The amount receivable from N V R Co-Operative Sugar
Factory towards the Development of Factory and Cane
Development Expenses etc., has been treated as Advance
recoverable since the company is claiming the same from
Government of Andhra Pradesh / N V R Co-Operative Sugar
Factory.
The company has not created any Deferred Tax Asset during
the financial year since the company has brought forward
un absorbed depreciation losses and is not expecting any
taxable profits in foreseeable future.
NOTE- 35
Calculation of earnings per share :
Disclosure as required by Accounting Standard - Ind AS
33 Earning Per Share of the Companies (Indian Accounting
Standards) Rules 2015.
The earning per share is calculated by dividing the profit
after tax by weighted average number of shares outstanding
for basic and diluted EPS.
NOTE- 36
Segment Information: The company is operating in only one
segment business of Pharma and there is no geographical
segment to be reported.
NOTE- 37
The balances of trade receivables, trade payables, long term
loans & advances, short term loans & advances, other
current assets & other current liabilities are subject to
confirmation from respective parties.
NOTE- 38
During the year, the company has made provision for gratuity
on actuarial valuation and the company did not make any
contribution to a scheme administered by the insurer to
discharge the gratuity liability to its employees.
Audit Trail Disclosure:
The Ministry of Corporate Affairs ( MCA) by the Companies
( Accounts) Amendment Rules 2021 and vide notification
dated 24 March 2021 has issued the " Companies ( Audit
and Auditors) Amendments Rules, 2021 " has prescribed a
new requirement for companies under the proviso to Rule
3(1) of the Companies (Accounts) rules, 2014 inserted
requiring companies, which uses accounting software for
maintaining its books of account, shall use only such
accounting software which has a feature of recording audit
trail of each and every transaction, creating an edit log of
each change made in the books of account along with the
date when such changes were made and ensuring that the
audit trail cannot be disabled.
As required under above rules, the company uses in-house
developed software for its financial accounting and MIS
which works along with Database- Oracle as accounting
software for maintaining its books of account which has a
feature of recording audit trail (edit log) facility and the same
has been operated throughout the year for all transaction
recorded and the audit trail feature has not been tampered
with.
However, the audit trail feature was not enabled at the
database level for Database- Oracle to log any direct data
changes, used for maintenance of all accounting records
by the company.
NOTE- 40
Figures have been rounded off to nearest thousand.
Previous year's figures have been regrouped / reclassified
wherever necessary to correspond with the current year's
classification / disclosure.
For and on behalf of the Board of Directors
For BHAVANI & CO dr r t RAVI
Chartei-ed ^ounterts Chairman - DIN: 00272977
Firm's Reg No: 012139S
Jitendra Shah
CA S. Kavitha Padmini Managing Director - DIN : 09377846
Partner
M.NO.229966
RAKESH KALBATE
Company Secretary & Compliance Officer
M.No. A66666
Place : Mumbai RITESH JAIN
Date : 20.05.2025 C F O
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