2.8 Provisions, contingent liabilities and contingent
assets
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event and it is probable that an
outflow of resources, that can be reliably
estimated, will be required to settle such an
obligation.
If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows to net present value
using an appropriate pre-tax discount rate that
reflects current market assessments of the time
value of money and, where appropriate, the risks
specific to the liability. Unwinding of the discount is
recognised in the Statement of Profit and Loss as a
finance cost. Provisions are reviewed at each
reporting date and are adjusted to reflect the
current best estimate.
A present obligation that arises from past events
where it is either not probable that an outflow of
resources will be required to settle or a reliable
estimate of the amount cannot be made, is
disclosed as a contingent liability. Contingent
liabilities are also disclosed when there is a
possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non -occurrence of one or more
uncertain future events not wholly within the
control of the Company.
Claims against the Company where the possibility
of any outflow of resources in settlement is remote,
are not disclosed as contingent liabilities.
Contingent assets are not recognised in financial
statements since this may result in the recognition
of income that may never be realised. However,
when the realisation of income is virtually certain,
then the related asset is not a contingent asset and
is recognised.
2.9 Commitments
Commitments represent contractual obligations
that are not recognised as liabilities as at the
reporting date but are disclosed in the notes to
accounts.
Capital commitments include the amount of
contracts remaining to be executed on capital
account and not provided for.
Other commitments, including commitments
towards investments, are disclosed in the notes to
accounts and are recognised when the underlying
obligation is crystallised or called upon, in
accordance with the terms of the respective
agreements.
3.0 Earning per share
Basic earning per share is calculated by dividing
the net profit or loss for the year attributable to the
equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity shares outstanding
during the year.
For the purpose of calculating the diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares. The dilutive
potential equity shares are deemed converted as
at beginning of the period, unless they have been
issued at a later date.
3.1 Employee Retirement benefits
i) Short term employee benefits
All employee benefits payable/available
within twelve months of rendering the service
are classified as short term employee benefits.
Benefits such as salaries, wages and bonus
etc., are recognised in the statement of profit
and loss in the period in which the employee
renders the related service.
ii) Post - employment benefits
Defined contribution plans -
Retirement benefits in the form of provident
fund is a defined contribution scheme. The
company has no obligation, other than the
contribution payable to the provident fund.
Payments to defined contribution plans are
recognised as an expense when employees
have rendered service entitling them to the
contributions.
Defined benefit plans -
Gratuity
The company has an obligation towards
gratuity, a defined benefit retirement plan
covering eligible employees. The Gratuity
payment plan provides for a lump sum
payment to the vested employees at
retirement, death, incapacitation while in
employment or on termination of
employment of an amount based on the
respective employee's salary and tenure of
employment. Vesting occurs upon completion
of five years of service.
Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation, performed
by an independent actuary, at each balance
sheet date using the projected unit credit
method. Re-measurements comprising of
actuarial gains and losses, are recognised in
other comprehensive income which are not
reclassified to profit or loss in the subsequent
periods.
iii) Long - term employee benefits
Leave Encashment
The liability of accumulating compensated
absences is determined by actuarial valuation
performed by an independent actuary at each
balance sheet date using projected unit credit
method.
3.2 Segment Reporting
The company operates in one reportable business
segment i.e. "Pharmaceuticals".
3.3 Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet
comprise cash at bank and in hand and short¬
term deposits with banks that are readily
convertible into cash which are subject to
insignificant risk of changes in value and are held
for the purpose of meeting short-term cash
commitments.
* During the year, consequent to issuance of fresh shares by Dr. Morepen Limited ("the investee company") and partial
divestment of the company's holding in the investee company, the company's ownership in the investee company has
come down to 19.94%, against 80.00% held in previous financial year.
Dr. Morepen Limited ceased to be a subsidiary of the company with effect from July 31, 2025 and there is no policy
participation and no material transactions. The retained investment has been classified as a financial asset and is
measured at fair value in accordance with Ind AS 109 - Financial Instruments measured at FVOCI irrevocably at initial
recognition being strategic, long-term, not held for trading.
The Company has recognised a gain on dilution of stake amounting to '109.59 Lakhs in the Statement of Profit and Loss,
which has been presented as an exceptional item.
^ During the year, the Company incorporated MOREPEN LABS FZCO, Dubai, UAE, as a wholly-owned subsidiary, with an
authorised and issued share capital of 5,000 shares of AED 10 each, aggregating AED 50,000. The shares have been fully
subscribed by the Company; however, the share capital remained unpaid as at 31 March 2026. Accordingly, an
investment of '13.18 Lakhs has been recognised at cost in accordance with Ind AS 27 'Separate Financial Statements',
with a corresponding liability of an equivalent amount disclosed under 'Other Financial Liabilities — Payable towards
unpaid share capital subscription'. The share capital amount remaining unpaid as at March 31,2026, has been duly paid
up by the company before balance sheet signing date.
# The Company has made a capital commitment to the above Alternative Investment Fund, against which a portion has
been drawn down as at the reporting date. The uncalled commitment, representing the balance amount to be contributed
by the Company, is disclosed under "Commitments".
C. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -
i) The equity shares of the company are having a par value of '2/- each. Every member of the Company holding
equity shares shall be entitled to vote on every resolution placed before the Company and his voting rights on
any poll shall be in proportion to his share in the paid-up equity share capital of the company.
ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining
assets of the company as per preference prescribed under the Act. The distribution will be in the proportion of
the number of equity shares held by each shareholder.
D. During last 5 years immediately preceding the balance sheet date, no Equity Share has been issued pursuant to any
contract without payment being received in cash.
G. In terms of Hon'ble National Company Law Tribunal ('NCLT') order dated 12.03.2018, the company sent notices
to all the eligible FD holders seeking, their bank account details and identification particulars, for transfer of Fixed
Deposit (FD) dues in their respective bank accounts. In all 4953 no. of fixed deposit holders submitted their
identification and bank account particulars and surrendered a total of 50,62,872 Equity Shares for cancellation,
with the company. All these FD holders who provided their bank account details, identification particulars and
other relevant details, were paid their entire FD dues as per Hon'ble NCLT order dated 12.03.2018. The necessary
information in this regard to payment of FD dues were duly submitted to the jurisdictional Registrar of Companies.
Post reconciliation of equity shares surrendered by eligible Fixed Deposit (FD) holders, the number of equity shares
identified for cancellation has increased to 50,62,872 instead of earlier 50,38,983 equity shares.The company
has approached BSE Limited (BSE) and National Stock Exchange of India (NSE) for cancellation of aforesaid
shares, for which pay-out has been made by the company, in compliance with Hon'ble NCLT's order dated
12.03.2018. As soon as the Stock Exchanges give their go ahead for cancellation of said shares from total listed
capital, the resultant reduction of share capital will be updated with the jurisdictional Registrar of Companies.
Necessary accounting entries for the cancellation of equity capital and reversal of reserves and surplus for
'100.78 Lakhs and '469.63 Lakhs respectively, will be given effect on the receipt of guidance from stock
exchanges and depositories. The total sum of '570.41 Lakhs, comprising of debit balance of share capital and
reserves & surplus, is appearing under head - other current assets. Aforesaid entries has insignificant impact on
EPS and current assets.
H. During the financial year ending March 31, 2025, the company raised funds aggregating to '20000.00 lakhs
through a Qualified Institutions Placement (QIP). The net proceeds from the issue, after adjusting share issue
expenses of '1092.45 lakhs, amounted to '18907.55 lakhs. During the current year ended March 31,2026, the
Company has utilised the proceeds in accordance with the objects set out in the Placement Document. The
utilisation thereof is monitored by the Management and reviewed by the Audit Committee, including reporting to
the Monitoring Agency, in compliance with applicable regulatory requirements. There has been no deviation or
variation in the utilisation of the proceeds from the stated objects, except for timing differences in deployment.
The amount originally allocated towards working capital in the Placement Document was '6435.98 lakh. Pursuant
to lower actual issue-related expenses of '1092.45 lakh as against the estimated expenses of '1284.64 lakh, the
resultant savings of '192.19 lakh have been utilised towards working capital requirements, thereby revising the
allocation to '6628.17 lakh.
In addition to the above, the Company has earned income of '671.58 lakh on deployment of unutilised funds,
comprising interest income and capital gains. Out of such income, an amount of '155.47 lakh has been utilised
towards capital expenditure in API-Baddi and API-Masulkhana facilities over and above the amounts originally
allocated in the Placement Document. The balance income of '516.11 lakh remains available for utilisation.
Accordingly, the total unutilised amount, including income earned amouting to '516.11 Lakhs, aggregates to
'1872.35 lakh as at March 31,2026 (March 31,2025: '7794.57 lakh). Pending utilisation, such funds have been
temporarily invested in debt mutual funds. Further, at the end of the year, no amounts are lying in the Monitoring
Account and Current Account, respectively (March 31,2025: '3.41 lakh and '10.48 lakh, respectively).
33. SEGMENT REPORTING
In accordance with Indian Accounting Standard, Ind AS-108 "Operating Segment ", segment information has been
given in consolidated financial statements of the company, and therefore, no separate disclosure on segment
information is given in these financial statements.
34. RELATED PARTY DISCLOSURES
Disclosure as required by Indian Accounting Standard "Related Party Disclosures" (Ind AS 24) as notified u/s 133 of
Companies Act, 2013 are as under:
Notes -
1. Represents sum of '276.70 Lakhs (previous year '280.59 Lakhs) benefits paid as salaries in respect
of compensated absences and '70.47 Lakhs (previous year '74.29 Lakhs) regular benefit payments
upon exit from service is included in the amount of '347.88 Lakhs (previous year '354.87 Lakhs)
of benefits paid.
2. The Government of India has enacted four Labour Codes, namely the Code on Wages, 2019, the Industrial
Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and
Working Conditions Code, 2020, to consolidate and rationalise existing labour laws. However, the
detailed rules and effective dates for implementation of key provisions are yet to be notified. In accordance
with Ind AS 19, employee benefit obligations are measured based on laws that are enforceable as at the
reporting date. As the relevant provisions of the Labour Codes are not yet operational, the company has
continued with the existing accounting treatment at this stage. Accordingly, gratuity and leave encashment
continue to be accounted for under the applicable laws. The impact, if any, will be evaluated when the
relevant provisions become effective.
The Company has opted to pay the tax under section 115BAA of the Income Tax Act, 1961. Accordingly the provision for
current and deferred tax has been determined at the rate of 25.17%.
39. Dividend
The Board of Directors at their meeting held on 26th May, 2026 recommended a final dividend of Rs. 0.20/- per share,
for the financial year ending March 31,2026. Final dividend proposed by the Board of Directors is recognized upon
approval by the members shareholders, at the forthcoming Annual General Meeting, who have the right to decrease
but not increase the amount of dividend recommended by the Board of Directors.
No dividend shall be payable in respect of 50,62,872 equity shares that had been surrendered by members (erstwhile
fixed deposit holders) to the Company for cancellation and had claimed refund of their fixed deposit dues in lieu thereof,
in accordance with the order passed by the Hon'ble National Company Law Tribunal (NCLT), Chandigarh, dated March
12, 2018. These shares have been cancelled by the Board of Directors of the Company and are pending for
cancellation by the Stock Exchanges.
40. Corporate Social Responsibility (CSR)
a) During the financial year ended March 31,2026, CSR amount required to be spent by the Company as per Section
135 of the Companies Act, 2013 read with Schedule VII thereof was '244.03 Lakh (Previous year '225.11 Lakh).
b) During the year the Company has made an expenditure of '245.25 Lakh (Previous year '225.51 lakh) related
to CSR.
c) Details of CSR expenditure incurred during the year ended March 31,2026 is as below :-
During the year, the company has received revised repayment schedule of its Term loan availed from Shinhan
Bank. As per the schedule, the loan is now repayable in 11 instalments as against 10 instalments stipulated at the
time of initial sanction. Accordingly, the maturity profile of the said borrowing has been revised based on the
updated repayment schedule.
C) Short Term Borrowings - Unsecured loans
During the year, the company has availed fresh unsecured loans for funding its working capital requirements which
are at interest rates ranging from 7.30% to 9.25%.
During the previous year ended March 31,2025, the Company had availed a demand loan facility of '276.50
lakhs from Punjab National Bank, secured against term deposits. During the current year ended March 31,2026,
the said facility has been converted into an overdraft facility, which continues to be secured against the underlying
term deposits and carries the same terms and conditions as the erstwhile demand loan, including an annual
interest rate of up to 8.50%, being 0.5% over and above the deposit rate offered by the bank.
D) Short Term Borrowings - Working Capital Demand Loan
During the year, the Company has obtained fungible working capital facilities from Qatar National Bank
aggregating to '5000.00 lakhs, comprising a Working Capital Demand Loan (WCDL) facility and an Export Credit
Facility. The facilities are repayable on demand or at maturity of individual drawdowns, whichever is earlier, with
drawdowns having tenors of up to 90 days (WCDL) and 180 days (export credit facility).
The borrowings carry interest linked to benchmark rates, being MCLR plus applicable margin for WCDL and Term
SOFR plus applicable margin for export credit facility, as agreed with the bank from time to time (approximately
8.00% per annum). The facilities are secured by a first ranking pari passu charge by way of hypothecation over the
Company's entire current assets, including stocks, raw materials, work-in-progress, consumables and receivables,
both present and future and are further supported by a personal guarantee of the Chairman & Managing Director.
The company has repaid the working capital facilities of '9900.00 lakhs availed from Kotak Mahindra Bank. The
No Dues for these facilities have been received and all kinds of charge on securities have been discharged.
t2. RIGHT OF USE OF ASSETS AND LEASE LIABILITIES
a) The Company has recognised right-of-use assets in respect of leases of office premises and solar installations,
which are presented under "Right-of-use assets". The movement in right-of-use assets is disclosed under Note No.
2 - Property, Plant and Equipment. The lease terms relating to office premises generally range from 1 to 10 years,
while the lease term relating to solar installations is 5 years.
f) During the year, the company recognized a sum of '837.14 lakhs towards, annual depreciation and
amortization expense on Right-of-Use (RoU) assets . In view of above, annual "Rent"/"Other expenses are lower
by '940.80 Lakhs. Further, during the year the company recognized annual interest expense of '130.86 lakhs ,
representing the interest component of lease liabilities calculated using the effective interest rate method.
Notional interest income for the current year for '28.11 lakhs has been recognised during the year in
accordance with Ind AS 109 - Financial Instruments.
On account of the above, profit after tax for the year has increased by '347.12 lakhs, due to the net
impact of amortisation charges, interest expenses and deferred tax assets being offset by rent expenses and
interest income.
43. BUSINESS RESTRUCTURING
Pursuant to the recommendation of the Board of Directors at its meeting held on January 14, 2025 and the
approval of the shareholders at the Extraordinary General Meeting held on February 10, 2025, the company
approved the transfer of its Medical Devices business, being an undertaking of the company, to its subsidiary,
Morepen Medipath Limited (formerly known as Morepen Medtech Limited), as a going concern on a slump sale
basis. Accordingly, the company entered into a Business Transfer Agreement ("BTA") with the said subsidiary on
March 18, 2025, for a consideration of '18111.79 lakhs, subject to customary working capital adjustments and
receipt of requisite statutory and regulatory approvals.
Pursuant to the Business Transfer Agreement dated March 18, 2025, as amended on May 12, 2025 (the "BTA"),
the Appointed Date for the transfer of the Company's Medical Devices business undertaking to its subsidiary,
Morepen Medipath Limited, on a slump sale basis, was revised from February 1, 2025 to April 1, 2025.
However, due to the time required for obtaining requisite statutory licences, regulatory approvals, and
completion of procedural formalities, the transfer is being effected from April 1, 2026.In view of the revised
Appointed Date of April 1,2026, the lump-sum consideration for the slump sale of the Medical Devices business
aggregates to '19710.12 lakhs, subject to customary closing adjustments, including adjustments relating to
working capital as at such date. The consideration so determined is not lower than the fair market value
computed in accordance with Rule 11UAE of the Income-tax Rules, 1962, read with Section 50B of the Income-
tax Act, 1961, as certified by an independent registered valuer. The BTA dated March 18, 2025, as amended on
May 12, 2025, has been further amended pursuant to an amendment agreement dated May 26, 2026 to give
effect to the revised consideration consequent to the change in the Appointed Date.As the transaction represents
an internal reorganisation of the company's businesses, the Medical Devices business has not been classified as
a discontinued operation. However, as the criteria for classification as "held for sale" under Ind AS 105 have
been met, the related assets and liabilities have been presented as a disposal group held for sale. Accordingly,
the figures reported in the Statement of Assets and Liabilities as at March 31,2026 are not strictly comparable
with those as at March 31,2025. The results of operations and cash flows of the said business continue to be
included within the respective line items of the Statement of Profit and Loss and the Statement of Cash Flows for
the year ended March 31, 2026.Pending receipt of certain statutory licenses and regulatory approvals in the
name of the transferee company, the company continues to undertake certain administrative and operational
activities on behalf of the transferee, until such approvals are obtained and the operations are fully transitioned.
44. OTHER SIGNIFICANT DISCLOSURES
a) In the opinion of directors, all assets except stated otherwise have a value on realisation in the ordinary course of
business at least equal to the amount at which they are stated in the books of accounts and the provision for
depreciation and for all known liabilities is adequate and considered reasonable.
b) Balances of Non-current liabilities, Current liabilities, Long terms loans and advances, Trade receivables, Short
term loans and advances and banks are subject to confirmation.
c) Assessments under indirect tax laws for earlier years are in progress. Demand, if any, shall be known &
accounted for, on the completion of assessments.
d) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.
e) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company 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
lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not
received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether,
directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
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