(iii) Terms and rights attached to equity shares
The Company has only one class of equity shares having a face value of ' 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholder.
(iv) Shares held by holding and ultimate holding Company
13,909,587 (December 31, 2023 : Nil) equity shares of ' 10 each fully paid are held by Opella Healthcare Participation BV. Nil (December 31, 2023 :2,000,000) equity shares of ' 10 each fully paid were held by Sanofi India Limited
Nature and Purpose of reserves:
1) Retained Earnings
Retained earnings are profits that the company has earned till date, less any transfers to general reserves, dividends or other distributions paid to shareholders
2) Capital Reserve
Capital Reserve is created on account of demerger transaction. (Refer Note 46 & 47)
3) Share options outstanding account
The share options outstanding account is used to recognise the fair value of restricted stock units as at grant date issued by Sanofi S.A to the Company’s eligible employees.
29(b) For the year ended December 31, 2024, the company has recognised Deferred tax assets of '5 million in other comprehensive income on account of actuarial remeasurements of defined benefit plan.
No aggregate amounts of current and deferred tax have arisen in the reporting periods which have not been recognised in net profit or loss or other comprehensive income but directly debited/ (credited) to equity.
30 Operating Segment
The operations of the Company are limited to one segment viz. Consumer Healthcare Products.
Operating segments are defined as components of a company for which discrete financial information is available that is evaluated regularly by Chief Operating Decision Maker (“CODM”), in deciding how to allocate resources and assessing performance.
Note: At the time of incorporation, SCHIL issued 2,000,000 shares to SIL, with the issuance occurring on May 12, 2023 and continuing until scheme becoming effective on June 1, 2024 after which the issuance was cancelled. Pursuant to the Scheme of Demerger, as outlined in Clause 3.3.3 of the Scheme, each shareholder of SIL is entitled to receive one share of SCHIL for each share held in SIL. The share issuance process was completed on 25 June 2024; however, the issuance was based on the share entitlement ratio report dated 10 May 2023. As a result, the shareholders who received shares as of 25 June 2024 are considered to be deemed shareholders of SCHIL for the year ended December 31, 2023.
Terms and conditions of transactions with related parties
The sales, services and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. For the year ended December 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (December 31, 2023: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
All transactions for the period May 10, 2023 to December 31, 2023 and from January 1, 2024 to May 31, 2024 were undertaken by Sanofi India Limited on behalf of the Company. (Sanofi India Limited being the trustees of the Company for the said period. Refer Note 46 & 47).
34 Share Based Payments Restricted Stock Units (RSU’s)
The Company does not provide any equity based compensation to its employees. However, the ultimate holding company, Sanofi SA, France (“the grantor”) maintains equity incentive plans that provide for award of restricted share plans to certain employees of the Company. The terms of those plans make the award contingent on the attainment of certain performance criteria which are considered to be defined grants. The vesting period of such plans is either three or four years.
35 Employee Benefits
Defined Contribution Plans (Refer Note 2.2 (xiii)
The Company makes contributions towards provident fund, superannuation fund and pension scheme to a defined contribution retirement benefit plan for qualifying employees. The superannuation fund is administered by the Life Insurance Corporation of India (LIC). Under the plan, the Company is required to contribute a specified percentage of payroll cost of eligible employees to fund the retirement benefits.
Defined Benefit Plans
I) Other long term employee benefits (Refer Note 2.2 (xiii)
Compensated absences (included as a part of salaries and wages in Note 25 - Employee benefits expense)
All eligible employees can carry forward and avail / encash leave as per Company’s rules.
Long Service Award (included as a part of salaries and wages in Note 25 - Employee benefits expense)
Under this scheme, long service benefits accrues to the employees, while in service and is payable upon completion of stipulated services with the Company.
II) Post employment employee benefits plans (Refer Note 2.2 (xiii)
Gratuity
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement according to the provisions of the Payment of Gratuity Act or as per the Company’s Scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn base salary.
Gratuity is funded through investments with an insurance service provider. Planned Assets are maintained by LIC and the Company has made application for transferring in name of “Sanofi Consumer Healthcare Gratuity Fund.
In above cases, the Company’s liability is actuarially determined (using the Projected unit credit method) at the end of each year. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.
Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company’s financial statements as at the Balance Sheet date:
viii) Risk exposur :
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below :
Investment risk: If future investment returns on assets are lower than assumed in valuation, the scheme’s assets will be lower and the funding level higher than expected.
Changes in bond yields: A decrease in yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.
Longevity risk: If improvements in life expectancy are greater than assumed, the cost of benefits will increase because pensions are paid for longer period than expected. This will mean the funding level will be higher than expected.
Inflation risk: If inflation is greater than assumed, the cost of benefits will increase as pension increases and deferred revaluations are linked to inflation.
40 a) Exceptional items for the year ended December 31, 2024, is ' 284 million which includes product recall related cost towards Sales return and inventory write off ' 108 million, expenses towards listing formalities amounting to ' 77 million, demerger expenses amounting to ' 70 million and Intangible asset under development written off amounting to '29 million, which was acquired under demerger transaction (Refer Note 46 & 47) based on the internal assessment done by the company of its recoverability.
b) Exceptional item for previous year ended December 31, 2023 includes expense towards demerger amounting to ' 18 million.
Fair value of financial assets/liabilities measured at amortised cost
The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, trade payables, other financial liabilities are considered to be the same as their fair values, as they are current in nature.
The categories used are as follows :
Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. Considering that all significant inputs required to fair value such instruments are observable, these are 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.
42 Financial risk management
The Company’s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to their business operations. The Company’s principal financial liabilities comprise of trade and other payables. The Company’s senior management’s focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s financial performance. The Company’s overall risk management procedures to minimise the potential adverse effects of financial market on the Company’s performance are as follows :
The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management is carried out by the management in consultation with the Board of Directors. The Board provides principles for overall risk management, as well as policies covering specific risk areas.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
(A) Management of 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 the Company’s receivables from customers and from its financing activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on expected credit loss model that represents its estimate of incurred losses in respect of trade and other receivables.
(i) Trade and other receivables
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ' 137 million as at December 31, 2024 (December 31, 2023 - '316 million). Trade receivables are typically unsecured and are derived from revenue earned from customers located in India as well as outside India.
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, the country and the state in which the customer operates, also has an influence on credit risk assessment. Credit quality of a customer is assessed based on credit rating scorecard and individual credit limits are defined in accordance with this assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Further, significant sales of the Company are against advance payment/collection on delivery terms.
The management continuously monitors the credit exposure towards the customers outstanding at the end of each reporting period to determine incurred and expected credit losses.
The management believes that no further provision is necessary in respect of trade receivables based on historical trends of these customers.
Concentration of credit risk arises when counter parties are engaged in similar business activities or have similar economic features that would cause the ability to meet contractual obligations to be similarly affected by changes in economical, political or other conditions. Concentration of credit risk indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry. The Company’s exposure to customers is diversified and no single customer has significant contribution to trade receivable balances.
(ii) Cash and cash equivalents
The Company held cash and cash equivalents of ' 3,269 million as at December 31, 2024 (December 31, 2023 : '16 million). Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.
The Company’s maximum exposure to the credit risk as at December 31,2024 and December 31, 2023 is the carrying value of each class of assets.
(B) Liquidity Risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in 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.
The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended December 31, 2024 and December 31, 2023. Cash Flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.
The following table shows the maturity analysis of the Company’s all non- derivative, contractual financial liabilities based on agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.
(C) Management of Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks namely interest rate risk, currency risk and other price risk, such as commodity risk. The Company is not exposed to interest rate risk and other price risk whereas the exposure to currency risk is given below :
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies. The Company does not enter into financial instrument transactions for trading or speculative purposes. The Company’s exposure to foreign currency risk at the end of reporting periods in ' as follows :
43 Capital management (a) Risk management
For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity share holders of the Company. The primary objective of the Company’s capital management is to safeguard the Company’s ability to remain as a going concern and maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. 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 current capital structure of the Company is equity based with no financing through borrowings. The Company is not subject to any externally imposed capital requirement.
No changes were made in the objectives, policies or processes for managing capital during the year ended December 31, 2024 and December 31, 2023.
44 Additional Regulatory Information required by Schedule III
(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Borrowing secured against current assets
The Company has no borrowings from banks and financial institutions secured against current assets.
(iii) Willful defaulter
The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
There are no balances outstanding in respect of transactions undertaken with a company struck-off under section 248 of the Companies Act, 2013.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companies (Restriction on number of layers) Rules, 2017.
(vi) Compliance with approved scheme(s) of arrangements
The Company has entered into scheme of arrangement which has an accounting impact in the current and previous financial year. (Refer note 46 & 47)
(vii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other person(s) or entity(ies) identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other person(s) or entity(ies) identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of PP&E, intangible asset and investment property
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
Other Regulatory Information
(i) Title deeds of immovable properties not held in name of the Company
There are no immovable property owned by the company.
(ii) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(iii) Utilisation of borrowings availed from banks and financials institutions
The Company has no borrowings from banks and financial institutions. Hence this disclosure clause is not applicable.
46 The Board of Sanofi India Limited (SIL) on May 10, 2023, had approved a Scheme of arrangement under Sections 230 to 232 of the Companies Act, 2013 (“"Scheme””), to demerge the Consumer Healthcare business of the Company into its wholly owned subsidiary Sanofi Consumer Healthcare India Limited (“”SCHIL””). In accordance with the Scheme of Arrangement between Sanofi India Limited and its shareholders and creditors and SCHIL as (“”the Scheme””) approved by the Hon’ble National Company Law Tribunal, Mumbai Bench by an order dated May 7, 2024, and filed with Registrar of Companies (ROC) on June 1, 2024. The Consumer Healthcare business, along with its related assets and liabilities at the values appearing in the books of accounts of SIL on the close of business hours as on May 10, 2023, was demerged, transferred and vested into the Company with effect from May 10, 2023 (Incorporation Date) as set out in Appendix C of Ind AS 103 'Business Combinations’. The appointed date and effective date of the Scheme was June 1, 2023 and June 1, 2024 respectively. All the transactions from May 10, 2023 (Date of Incorporation) till May 31, 2024, considered in the financial statement were undertaken by SIL in capacity as trustees for Consumer Health Care and risk associated with the business remains with SCHIL from date of business transfer.
Pursuant to the demerger, the Company has recognized in its books of account, the carrying amount of assets and liabilities as on May 31, 2024, pertaining to the Consumer Healthcare business transferred from SIL. The excess of the carrying amount of assets transferred over the carrying amount of liabilities transferred and profit earned from May 10, 2023 to May 31, 2024 aggregating to ' 1,902 million (including capital reserve of '407 million) and net of dividend paid by SIL in trust on behalf of the Company amounting to ' 1,152 million has been credited to reserves in accordance with the Scheme as on May 31, 2024.
The record date, for determining the eligibility of the shareholders of SIL for allotting shares of the SCHIL in the ratio of 1 (One) fully paid-up new equity share of ' 10 each of the Company for every 1 (One) equity share of '10 each of SIL (pursuant to the Scheme of Arrangement) was fixed as June 13, 2024. Accordingly, the Company has allotted 23,030,622 shares amounting to 230 million (adjusted against Capital Reserve) to the eligible shareholders of SIL on June 25, 2024.
In accordance with the Scheme, the Company has recognized in its books of account, the carrying amount of assets aggregating to ' 1,298 million and liabilities aggregating to ' 891 million as on May 10, 2023, pertaining to the Consumer Healthcare Business transferred from Sanofi India Limited. The excess of the carrying amount of assets transferred over the carrying amount of liabilities aggregating to ' 407 million is recorded as Capital Reserve.
48 Contingent Liability : Bank Guarantee issued to Custom Department ' 6 MINR (December 2023: Nil)
49 Backup of books of account on servers in India
As per the MCA notification dated August 5, 2022, and the Companies (Accounts) Fourth Amendment Rules, 2022, the Company is required to maintain backup of books of accounts on servers physically located in India on a daily basis. The Company maintains its books of accounts on an ERP system and also uses surround systems for recording certain transactions relevant as “books of account”. These surround systems include Software-as-a-Service (SaaS) applications. The Company maintains daily backup of books of accounts on the ERP system and surround systems. The backup of SaaS are hosted on servers outside India. The management is in process of evaluating options in order to effectively comply with the regulatory requirements.
50 Maintenance of Audit Trail
As required under the second proviso to Section 128(1) of the Companies Act 2013, read with proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, the Company has identified applications which meet the definition of books of account. The Company uses a financial accounting ERP for maintaining its books of account, together with certain surround applications which either initiate, store or process information which is subsequently recorded in the ERP. The said surround applications include certain third-party Software-as-a-Service (SaaS) applications. The ERP and the surround applications have a feature of recording audit trail (edit log) facility which has operated throughout the year for all transactions recorded in said applications as required under the Companies Act, 2013. The company is in the process of implementating robust compliance process for some applications.
51 The previous period Financial Statements are from May 10, 2023 to December 31, 2023 and are not comparable with current year Financial Statements.
52 Information as per Schedule III (Division II) has been given in the Financial Statements to the extent applicable
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