3.13. Provisions, contingent liabilities, contingent assets
A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event 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. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time
is recognised as a finance cost. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably
will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likeli¬
hood of outflow of resources is remote, no provision or disclosure is made.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
3.14. Earnings per share
Basic earnings per share is computed using the net profit for the year attributable to the shareholders' and weighted average
number of shares outstanding during the year. The weighted average numbers of shares also includes fixed number of equity
shares that are issuable on conversion of compulsorily convertible preference shares, debentures or any other instrument, from
the date consideration is receivable (generally the date of their issue) of such instruments.
Diluted earnings per share is computed using the net profit for the year attributable to the shareholder' and weighted average
number of equity and potential equity shares outstanding during the year including share options, convertible preference
shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the
year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such
potential equity shares, to the date of conversion.
3.15. 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. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabili¬
ties at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
3.15.1. Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by
regulation or convention in the marketplace. All recognised financial assets are subsequently measured in their entirety at either
amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments
that are designated as at fair value through profit or loss on initial recognition):
• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including
all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying
amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Interest income is recognised in profit or loss and is included in the "Other income" line item.
Investments in equity instruments at FVTOCI
On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the
subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election
is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus
transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value rec¬
ognised in other comprehensive income and accumulated in the 'Reserve for equity instruments through other comprehensive
income'. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
A financial asset is held for trading if:
• It has been acquired principally for the purpose of selling it in the near term; or
• On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and
has a recent actual pattern of short-term profit-taking; or
• It is a derivative that is not designated and effective as a hedging instrument or a financial guarantee. Dividends on these
investments in equity instruments are recognised in profit or loss when the Company's right to receive the dividends is
established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does
not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends
recognised in profit or loss are included in the 'Other income' line item.
Financial assets at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to
present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not
held for trading.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on
re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or
interest earned on the financial asset and is included in the 'Other income' line item. Dividend on financial assets at FVTPL is
recognised when the Company's right to receive the dividends is established, it is probable that the economic benefits associated
with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the
amount of dividend can be measured reliably.
Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model based on 'simplified approach' for the fi¬
nancial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing
component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at
an amount equal to the twelve month ECL, unless there has been a significant increase in credit risk from initial recognition in
which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is required tobe recognized is recognized as an impairment gain or loss
in statement of profit and loss.
De-recognition of financial asset
The Company de-recognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Com¬
pany neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred
asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the
Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues
to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income
and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or
loss on disposal of that financial asset.
On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of
a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues
to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those
parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised
and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that
had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise
been recognised in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other
comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised
on the basis of the relative fair values of those parts.
3.15.2. Financial liability and equity instrument
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with
the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residua! interest in the assets of an entity after deducting all of its liabili¬
ties. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Repurchase of
the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or
loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the con¬
tinuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the
Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set
out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognised by the
Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at
FVTPL.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and
has a recent actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognised by the Company as
an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
arise;
• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with the Company's documented risk management or in¬
vestment strategy, and information about the grouping is provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined
contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or
loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in
the 'Other income' line item.
However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of change in the fair value
of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive
income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create
or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognised in profit
or loss. The remaining amount of change in the fair value of liability is always recognised in profit or loss. Changes in fair value
attributable to a financial liability's credit risk that are recognised in other comprehensive income are reflected immediately in
retained earnings and are not subsequently reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Com¬
pany as at fair value through profit or loss are recognised in profit or loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end
of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised
cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is
included in the 'Finance costs' line item. The effective interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the expected life of the financial liability or (where appropri¬
ate) a shorter period, to the gross carrying amount on initial recognition.
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 en¬
forceable 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.
Reclassification
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no re¬
classification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are
debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes
to the business model are expected to be infrequent. The management determines change in the business model as a result of
external or internal changes which are significant to the Company's operations. A change in the business model occurs when the
Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next re¬
porting period following the change in business model. The Company does not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.
De-recognition of financial liabilities
The Company de-recognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or
have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modifica¬
tion of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted
for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between
the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in profit or
loss.
Recent accounting pronouncements
New amendments issued but not effective
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (In¬
dian Accounting Standards) Rules as issued from time to time. On March 31, 2025, MCA has not notified any new standards or
amendments to the existing standards.
The company has also issued 19,76,000 shares by way of Initial Public Offer at a premium of Rs. 62 per share in financial
year 2017-18.
During the financial year 2019-20 the company had issued 39,54,828 bonus shares having face value of Rs. 10 per share
amounting to Rs. 3,95,48,280 by utilising the Securities Premium Reserve.
During the financial year 2024-25, the Company issued 6,52,31,065 fully paid-up bonus equity shares of face value ' 2 each,
aggregating to ' 13,04,62,130. The bonus shares were issued by capitalizing the Securities Premium Reserve, in accordance
with the applicable provisions of the Companies Act, 2013, and as approved by the shareholders.
(b) Rights and terms attached to equity shares
The Company has only one class of equity shares each having par value of Rs.2 per share. The holder of equity shares is
entitled to one vote per share. All these shares have the same rights and preferences with respect to payment of dividend,
repayment of capital and voting rights. The Company declares and pays dividends on shares 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.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
17 Financial liabilities
Borrowing
Note:-
Non-Current Borrowing
1 Working Capital Term Loan from Janata Sahakari Bank Ltd of Rs 3,00,00,000/- is secured by the collateral security by
equitable mortgage of assets owned by Directors and their family members and by lien of Fixed Deposit placed by the
company with the bank repayable in 84 monthly installments commencing from January 2019, and carries an interest rate
of 11.00%
2 Working Capital Term Loan from Janata Sahakari Bank Ltd of Rs. 3,50,00,000/-is secured by the collateral security by
equitable mortgage of assets owned by Directors and their family members and by lien of Fixed Deposit placed by the
company with the bank repayable in 60 monthly installments commencing from March 2023, and carries an interest rate of
11.00%
3 Term Loan taken from YES BANK LTD of Rs. 56,00,000/-& 3,65,68,675/- is secured by mortgage of immovable property
consisting of offices from 706 to 709 on 7th floor of AravaUi Business Centre and is repayable in 84 & 180 monthly installments
commencing from April 2025, and carries an effective interest rate of 9.75%
Current Borrowing
1 Cash Credit facility from Janata Sahakari Bank Ltd, Pune secured against primary security of hypothecation of stock
& book debts & equitable mortgage of properties owned by directors & their relatives, fixed deposits liened to the
facilities & personal guarantee of directors & owners of the properties.
30 - Risk management
30A Capital Risk
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves
attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern
so that they can maximise returns for the shareholders and benefits for other stake holders. The aim is to maintain an optimal
capital structure and minimise cost of capital.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the require¬
ments of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders,
issue new shares or adjust the dividend payment to shareholders (if permitted).
30B Financial Instruments
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which
income & expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are as
disclosed in Note no. 3 to the financial statements.
The management considers that the carrying amount of financials assets & financial liabilities recognised in the financial state¬
ment approximate their fair values.
30C Financial Risk management objectives and policies
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's
primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its
financial performance.
The Company's financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and
financial assets includes trade receivables and other receivables etc. that arise from its operation.
The Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel.
The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This
framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's
competitive advantage. The business risk framework defines the risk management approach across the enterprise at various
levels including documentation and reporting. The framework has different risk models which help in identifying risks trend,
exposure and potential impact analysis at a Company level as also separately for business segments.
The Company has instituted a self governed Risk Management framework based on identification of potential risk areas,
evaluation of risk intensity, and clearcut risk mitigation policies, plans and procedures both at the enterprise and operating
levels. The framework seeks to facilitate a common organisational understanding of the exposure to various risks and
uncertainties at an early stage, followed by timely and effective mitigation. The Audit Committee of the Board reviews the risk
management framework at periodic intervals. Our risk management procedures ensure that the management controls various
business related risks through means of a properly defined framework.
30D Market Risk
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently
the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales
and services and purchases from overseas suppliers in various foreign currencies. Market Risk is the risk that changes in market
prices such as foreign exchange rates will effect groups income or value of its holding financial assets/ instruments.
The Company also holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of
changes in exchange rates on foreign currency exposures. The exchange rate between the Rupee and foreign currencies has
changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company's
operations are favourably affected as the Rupee appreciates/ depreciates against US dollar (USD)
The carrying amounts of the Company's foreign currency denominated monetary assets and liabilities at the end of the reporting
period which are hedged are as follows.
30E Credit risk
Credit risk refers to the risk of default on its obligation by the customer / counter party resulting in a financial loss. The
maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets.
Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers. Credit
risk has always been managed by each business segment through credit approvals, establishing credit limits and continuously
monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On
account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The
group uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The
provision matrix takes into account available external and internal credit risk factors such as default risk of industry, credit
default swap quotes, credit ratings from international credit rating agencies and historical experience for customers.
Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with
high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in
shares of co-operative banks.
30F Liquidity Risk
The Company's principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is
generated from operations. The Company believes that the working capital is sufficient to meet its current requirements.
Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source
of funding.
1 The lease agreement provides for an option to Company to renew the lease period at the end of the non-cancellable period.
There are no exceptional/restrictive covenants in the lease agreements.
2 Further the company has entered into cancellable operating lease for office premises and godown. Tenures of leases generally
vary from one year to five years. Terms of the lease include operating terms for renewal, terms of cancellation, etc.
3 Lease payments in respect of the above leases are recognised in the Statement of Profit and Loss under the head Rent
Expenses.
34B - Contingent Liabilities and Commitments
a) Contingent Liabilities:
As per the management of the company there are no contingent liabilities which are required to be disclosed in the notes
to the financial statements.
b) Commitments:
iii) Other Commitments:
The Company has entered into an agreement to acquire 35,89,201 equity shares of Kesar Pharma Limited at '56.89 per
share, aggregating to '20.42 crores. The consideration is payable by way of:
- '8.17 crores in cash, and
- '12.25 crores by issue of 61,23,000 equity shares of the Company at '20 per share.
As on March 31, 2025, the transaction remains pending execution. Accordingly, the Company has disclosed this obligation
as a commitment.
36 Other Additional Notes
A. Relationship with struck off company
The Company has no transaction with the companies struck off under Companies Act, 2013 or Companies Act, 1956
B. Undisclosed income
The Company do not have any such transactions which are not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).
C. Registration of Charges or Satisfaction with ROC
The company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
D. Utilisation of borrowings availed from banks
The borrowings obtained by the Company from banks have been applied for the purposes for which such loans were
taken.
E. Borrowing secured against current assets
The Company has taken working capital borrowings from banks and financial institutions on the basis of security of current
assets. The quarterly statement filed to the banks and financial institutions are in agreement with the books of accounts.
F. Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
G. Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.
H. Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
I. Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial
year.
J. 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.
K. Title deeds of immovable properties held
The company holds all the title deeds of immovable properties in its name.
L. Utilisation of borrowed funds and share premium
a) No funds have been advanced or loaned or invested funds (either 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).
b) 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 to or on behalf of the Ultimate Beneficiaries.
M. 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
37 The Previous year's figures have been regrouped / reclassified / rearranged / restated wherever necessary to match with the
current year's classification / disclosures.
As per our report of even date attached For and on behalf of the Board
For Raman S. Shah & Associates Vaishali Pharma Limited
Chartered Accountants CIN : L52310MH2008PLC181632
Firm Registration No. 119891W
Sd/- Sd/- Sd/-
Santosh A. Sankhe Atul Arvind Vasani Jagruti Atul Vasani
Partner Chairman & Managing Whole-time
Membership No. 100976 Director Director
(DIN: 02107085) (DIN: 02107094)
Sd/- Sd/-
Dewansh Ajay Vasani Vishwa Mekhia
Place : Mumbai Director and CFO Company Secretary &
Date : 28th May 2025 (DIN: 08111804) Compliance Officer
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