Sun Pharma Advanced Research Company Ltd. இன் கணக்கு குறிப்புகள்
Mar 31, 2023
i Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares and declares and pays dividend in Indian Rupees. The equity shares of the Company, having par value of HI/- per share, rank pari passu in all respects including voting rights and entitlement to dividend. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the 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 on pro-rata basis. The distribution will be in proportion to the number of equity shares held by the shareholders.
iv On July 08, 2021, the Company had allotted 6,24,74,082 warrants, each convertible into one equity share, on preferential basis at an issue price of H178 each, upon receipt of 25% of the issue price (i.e. H44.50 per warrant) as warrant subscription money. Balance 75% of the issue price (i.e. H133.50 per warrant) was payable within 18 months from the allotment date, at the time of exercising the option to apply for fully paid-up equity share of H1 each of the Company, against each warrant held by the warrant holder.
During the previous financial year, the Company upon receipt of balance 75% of the issue price (i.e.H 133.50/- per warrant) for 98,31,460 warrants, had allotted equal no. of fully paid up equity shares against conversion of said warrants exercised by the warrant holder(s). Whereas during the current financial year, for the remaining 5,26,42,622 warrants, the respective allottees have exercised their option for conversion/exchange the warrants into/for equity shares and accordingly, the company has allotted equal no. of fully paid up equity shares against conversion of said warrants exercised by the warrant holder(s).
v No equity share has been allotted as fully paid up bonus shares and / bought back during the period of five years immediately preceding the date at which the balance sheet is prepared.
Nature and purpose of each reserve
Securities premium - The amount received in excess of face value of the equity shares is recognised in securities premium. This would be utilised in accordance with the provisions of the Companies Act, 2013.
General reserve - The reserve arises on transfer portion on the net profit pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The Company can use this reserve for payment of dividend and issue of fully paid-up and not paid-up bonus shares.
CAPITAL MANAGEMENT
The Company''s capital management objectives are:
- to ensure the Company''s ability to continue as a going concern; and
- to provide an adequate return to shareholders through optimisation of debts and equity balance.
The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company''s objective for capital management is to maintain an optimum overall financial structure.
FINANCIAL RISK MANAGEMENT
The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company''s risk management assessment, policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment, management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities.
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, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business. However, the Company does not have any credit risk from financial assets as on balance sheet date.
Investments
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.
The Company has unutilised working capital lines from banks of J 17,494.90 Lakhs as on March 31, 2023 (Previous year : H 7,500 Lakhs)
The table below provides details regarding the contractual maturities of significant financial liabilities based on the contractual undiscounted payments :
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 risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include investments. The Company has designed risk management frame work to control various risks effectively to achieve the business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.
Foreign exchange risk
The Company''s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars, Euros). As a result, if the value of the Indian Rupee fluctuates relative to these foreign currencies, the Company''s revenues and expenses measured in Indian Rupees may fluctuate. The exchange rate between the Indian Rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.
b) Sensitivity
For the years ended March 31, 2023 and March 31, 2022, every 5% strengthening in the exchange rate between the Indian Rupee and the respective currencies for the above mentioned financial assets / liabilities would decrease the Company''s loss and increase
the Company''s equity by approximately J 383.85 Lakhs and H 200.00 Lakhs respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect.
Interest rate risk
The Company has no loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company''s exposure to interest rate risk is not significant.
Commodity rate risk
The Company being in the business of Research & Development, does not face any significant Commodity Price Risk.
DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006
Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.
a) The principal amount remaining unpaid as at March 31, 2023 in respect of enterprises covered under the "Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is ? 220.54 Lakhs (Previous year : H 5716 Lakhs).
b) There are no amounts of interest paid/due/payable during the year/previous year/succeeding year. Also, there is no amount of interest accrued and remaining unpaid at the end of current accounting year/previous accounting year.
c) The list of undertakings covered under MSMED was determined by the Company on the basis of information available with the Company and has been relied upon by auditors.
|
CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) |
H In Lakhs |
|
|
Particulars |
As at March 31, 2023 |
As at March 31, 2022 |
|
i. Contingent liabilities a) Guarantees given by the bankers against custom licenses b) Disputed demands by Income tax authorities* (gross) c) Disputed demands by Service tax authorities** (gross) * Amount paid under protest is classified under income tax assets (Refer Note 7) **Amount paid under protest is classified under other current assets (Refer Note 15) Note: includes, interest till the date of demand, wherever applicable. |
0.50 8,848.45 5,190.17 5,509.63 172.65 |
0.50 8,848.45 5,190.17 5,509.63 172.65 |
|
Future cash outflows in respect of the above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities. The Company does not expect the outcome of the matters stated above to have material adverse impact on the Company''s financial condition, results of operation or cash flows. H In Lakhs |
||
|
Particulars |
As at March 31, 2023 |
As at March 31, 2022 |
|
ii. Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) * |
140.06 |
508.75 |
iii. For commitments relating to lease arrangement. (Refer Note 39)
iv. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated 28th February, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC order. The Company will update its provision, on receiving further clarity on the subject.
* The Company is committed to pay milestone payments on a contract, however obligation to pay is contingent upon fulfilment of contractual obligation by parties to the contract.
NOTE 43
EMPLOYEE BENEFIT PLANS Defined contribution plan
Contributions are made to Regional Provident Fund (RPF), Family Pension Fund, Employees State Insurance Scheme (ESIC) and other funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund and other statutory funds are made only by the Company. The contributions are normally based on a certain percentage of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to J 418.00 Lakhs (Previous year : H 38758 Lakhs).
Defined benefit plan
a) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LIC''s Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member''s length of service and salary at the time of retirement/termination age. Provision for gratuity is based on actuarial valuation done by an independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review. The Company aims to keep annual contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments in short to medium term.
b) Other long term benefit plan
Actuarial valuation for compensated absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the statement of profit and loss amounting to J 279.38 Lakhs (Previous year : H 161.63 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.
Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined as at the year end using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions relating to defined benefit
Salary escalation rate
The estimates of future salary increases take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Basis used to determine rate of return on plan assets
The rate of return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
The contribution expected to be made by the Company for gratuity in next financial year ending March 31, 2024 J 300.87 Lakhs (Previous year : H 260.25 Lakhs).
Contract assets are initially recognised for revenue from sale of goods. Contract liabilities are on account of the upfront revenue received from customer for which performance obligation has not yet been completed. The performance obligation is satisfied when control of the goods or services are transferred to the customers based on the contractual terms. Payment terms with customers vary depending upon the contractual terms of each contract.
The Company has recorded an additional amount of J 5,138.64 Lakhs (Previous year : H 2,760.25 Lakhs) as deferred revenue pursuant to the requirements of Ind AS 115.
NOTE 45
USE OF ESTIMATES AND JUDGEMENTS
The preparation of the Company''s financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
1 Provisions [Refer Note 19 and 26]
2 Contingent liabilities [Refer Note 42]
3 Financial risk management [Refer Note 36]
Note 47.1 Increase in current ratio is due to increase in investment in mutual funds, certificate of deposits and fixed deposits.
Note 472 Decrease in debt equity ratio is due to repayment of borrowings on receipt of funds on issue equity shares against
conversion of warrants.
Note 473 Debt service coverage ratio/Return on equity/Return on Capital employed is negative since the company has incurred losses in the current year and previous year.
Note 474 The Company does not have inventory and hence, this ratio is not applicable.
Note 475 Increase in trade receivable turnover ratio / net loss ratio is due to higher out-licensing revenue in the current year.
Note 476 Increase in Net capital turnover ratio is due to higher outlicensing revenue and increase in working capital during the
current year.
Note 477 Decrease Return on investment ratio is due to higher investment made towards end of the current year.
OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
(ii) The Company has not been declared as wilful defaulter.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested either from borrowed funds or share premium or any other sources or kind of funds to any other person or entity, including foreign entities (Intermediaries) with the understanding, (whether recorded in writing or otherwise) that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any funds from any person or entity, 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 persons or entities 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.
(vii) The Company does not have any such transaction which is 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.
(viii) The Company does not have any scheme of arrangements during the year.
The Company had an information security incident (the ''incident'') that impacted some of the IT assets and infrastructure which the Company uses. Necessary steps were taken to gauge, contain and mitigate the impact of the incident as well as to safeguard the integrity of the systems infrastructure which included isolating its network and initiating recovery procedures. The Company believes there is no material legal non-compliance by the Company on account of the incident and all known impacts on its financial statements for the year ended March 31, 2023 on account of this incident have been considered. The Company is strengthening its cybersecurity infrastructure and is in the process of implementing improvements to its cyber and data security systems to safeguard against such risks in the future. The Company is also implementing certain long-term measures to augment its security controls systems across the organisation.
NOTE 50
There have been no events after the reporting date that require disclosure in these financial statements other than disclosed below:
The date of implementation of the Code on Wages 2019 and the Code on Social Security, 2020 is yet to be notified by the Government. The Company will assess the impact of these Codes and give effect in the subsequent financial statements when the Rules/Schemes thereunder are notified.
NOTE 51
Figures for previous year has been regrouped/reclassified wherever considered necessary.
Mar 31, 2022
i Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares and declares and pays dividend in Indian Rupees. The equity shares of the Company, having par value of H 1/- per share, rank pari passu in all respects including voting rights and entitlement to dividend. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the 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 on pro-rata basis. The distribution will be in proportion to the number of equity shares held by the shareholders.
iv During the year, the Company has allotted 6,24,74,082 warrants, each convertible into one equity share, on preferential basis at an issue price of H 178/- each, upon receipt of 25% of the issue price (i.e. H 44.50 per warrant) as warrant subscription money. Balance 75% of the issue price (i.e. H 133.50 per warrant) shall be payable within 18 months from the allotment date, at the time of exercising the option to apply for fully paid-up equity share of H 1/- each of the Company, against each warrant held by the warrant holder.
During the year, the Company upon receipt of balance 75% of the issue price (i.e.H 133.50/- per warrant) for 98,31,460 warrants, has allotted equal no. of fully paid up equity shares against conversion of said warrants exercised by the warrant holder(s). For the remaining 5,26,42,622 warrants, the respective allottees have not yet exercised their option for conversion/exchange the warrants into/for equity shares and accordingly, balance 75% money towards such remaining warrants is yet to be received. The last day for exercising the option for conversion/exchange the warrants into/for equity shares of the Company is January 07, 2023, being 18 months from the date of allotment of warrants i.e. July 08, 2021.
v No equity share has been allotted as fully paid up bonus shares and / bought back during the period of five years immediately preceding the date at which the balance sheet is prepared.
Nature and purpose of each reserve
Securities premium - The amount received in excess of face value of the equity shares is recognised in securities premium. This would be utilised in accordance with the provisions of the Companies Act, 2013.
General reserve - The reserve arises on transfer portion on the net profit pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The Company can use this reserve for payment of dividend and issue of fully paid-up and not paid-up bonus shares.
# The 720% term loan tenor is repayable by way of three equal instalments of H 2,500 lakhs as at March 31, 2022. The loan is secured by Corporate Guarantee given by Shanghvi Finance Private Limited and charge on all existing and future current assets. For the current maturities of long-term loan Refer Note 21 "Borrowings (Current)" .
The Company has availed working capital facilities from Kotak bank on the basis of security of current assets. However, for the year ended March 31, 2022 Company is not required to file quarterly statement with the bank. Further, the Company in the month of January 2022, has availed working capital facilities from ICICI bank on the basis of security of book debts (i.e. trade receivables). The Company has filed the Statement of trade receivables with value of H 2,773.61 lakhs as at March 31, 2022 for the quarter ended March 31, 2022 which is as per books of accounts.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
There were no transfers between Level 1 and 2 during the years ended March 31, 2022 and March 31, 2021.
CAPITAL MANAGEMENT
The Company''s capital management objectives are:
- to ensure the Company''s ability to continue as a going concern; and
- to provide an adequate return to shareholders through optimisation of debts and equity balance.
The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company''s objective for capital management is to maintain an optimum overall financial structure.
FINANCIAL RISK MANAGEMENT
The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company''s risk management assessment, policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment, management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities.
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, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business. However, the Company does not have any credit risk from financial assets as on balance sheet date.
Investments
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.
The Company has unutilised working capital lines from banks of H 7,500 Lakhs as on March 31, 2022 (Previous year : H 6,500 Lakhs)
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 risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include investments. The Company has designed risk management frame work to control various risks effectively to achieve the business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.
Foreign exchange risk
The Company''s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars, Euros). As a result, if the value of the Indian Rupee fluctuates relative to these foreign currencies, the Company''s revenues and expenses measured in Indian Rupees may fluctuate. The exchange rate between the Indian Rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.
b) Sensitivity
For the years ended March 31, 2022 and March 31, 2021, every 5% strengthening in the exchange rate between the Indian Rupee and the respective currencies for the above mentioned financial assets / liabilities would decrease the Company''s loss and increase the Company''s equity by approximately H 206.83 Lakhs and H 376.05 Lakhs respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect.
Interest rate risk
The Company has no loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company''s exposure to interest rate risk is not significant.
DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006
Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.
a) The principal amount remaining unpaid as at March 31, 2022 in respect of enterprises covered under the "Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is H 57.16 Lakhs (Previous year : H 7.30 Lakhs).
b) There are no amounts of interest paid/due/payable during the year/previous year/succeeding year. Also, there is no amount of interest accrued and remaining unpaid at the end of current accounting year/previous accounting year.
c) The list of undertakings covered under MSMED was determined by the Company on the basis of information available with the Company and has been relied upon by auditors.
a) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LIC''s Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member''s length of service and salary at the time of retirement/termination age. Provision for gratuity is based on actuarial valuation done by an independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review. The Company aims to keep annual contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments in short to medium term.
b) Other long term benefit plan
Actuarial valuation for compensated absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the statement of profit and loss amounting to H 161.63 Lakhs (Previous year : H 204.28 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.
Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined as at the year end using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions relating to defined benefit obligation are recognised in other comprehensive income whereas gains and losses in respect of other long term employee benefit plans are recognised in the statement of profit and loss.
Contract assets are initially recognised for revenue from sale of goods. Contract liabilities are on account of the upfront revenue received from customer for which performance obligation has not yet been completed. The performance obligation is satisfied when control of the goods or services are transferred to the customers based on the contractual terms. Payment terms with customers vary depending upon the contractual terms of each contract.
The Company has recorded an additional amount of H 2,760.25 Lakhs (Previous year : H NIL ) as deferred revenue pursuant to the requirements of Ind AS 115.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of the Company''s financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
1 Provisions [Refer Note 20 and 26]
2 Contingent liabilities [Refer Note 42]
3 Financial risk management [Refer Note 36]
Note 47.1 Increase in current ratio is due to repayment of borrowings during the year.
Note 47.2 Change is on account of issue of convertible warrants and equity shares during the year.
Note 47.3 Debt service coverage ratio/Return on equity/Return on Capital employed is negative since the company has incurred losses in the current year and previous year.
Note 47.4 The Company does not have inventory and hence, this ratio is not applicable.
Note 47.5 Decrease in trade receivable turnover ratio is due to higher out-licensing revenue in the previous year. Note 47.6 Ratio is negative because net working capital is negative.
Note 47.7 Increase in net loss ratio is due to higher out-licensing revenue in the previous year.
OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
(ii) The Company has not been declared as wilful defaulter.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested either from borrowed funds or share premium or any other sources or kind of funds to any other person or entity, including foreign entities (Intermediaries) with the understanding, (whether recorded in writing or otherwise) that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any funds from any person or entity, 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 persons or entities 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,
(vii) The Company does not have any such transaction which is 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.
(viii) The Company does not have any scheme of arrangements during the year.
(ix) The Company does not have not any such transaction which is 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).
The global spread of COVID-19 has been a fluid and challenging situation facing all the industries. The Company has taken all possible effective measures to limit and keep the impact of COVID-19 under control in order to ensure business continuity with minimal disruption. The Company has considered internal and external information while finalizing various estimates in relation to its financial statement captions upto the date of approval by the Board of Directors.
The Company continues to pay close attention to the development of COVID-19, and will further evaluate and actively respond to such impact on the financial position and financial performance of the Company.
There have been no events after the reporting date that require disclosure in these financial statements other than disclosed below:
The date of implementation of the Code on Wages 2019 and the Code on Social Security, 2020 is yet to be notified by the Government. The Company will assess the impact of these Codes and give effect in the subsequent financial statements when the Rules/Schemes thereunder are notified.
Figures for previous year has been regrouped/reclassified wherever considered necessary.
Mar 31, 2021
NOTE 34FINANCIAL RISK MANAGEMENT
The Companyâs activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Companyâs risk management assessment, policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment, management policies and processes are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
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 Companyâs receivables from customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business. However, the Company does not have any credit risk from financial assets as on balance sheet date.
Investments
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Companyâs reputation.
The Company has unutilised working capital lines from banks of R 6,500 Lakhs as on March 31, 2021 (Previous year: R 1,500 Lakhs)
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 risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include investments. The Company has designed risk management frame work to control various risks effectively to achieve the business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.
Foreign exchange risk
The Companyâs foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars, Euros). As a result, if the value of the Indian Rupee fluctuates relative to these foreign currencies, the Companyâs revenues and expenses measured in Indian Rupees may fluctuate. The exchange rate between the Indian Rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.
b) Sensitivity
For the years ended March 31, 2021 and March 31, 2020, every 5% strengthening in the exchange rate between the Indian Rupee and the respective currencies for the above mentioned financial assets / liabilities would decrease the Companyâs loss and increase the Companyâs equity by approximately R 376.05 Lakhs and R 706.08 Lakhs respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect.
Interest rate risk
The Company has no loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Companyâs exposure to interest rate risk is not significant.
Commodity rate risk
The Company being in the business of Research & Development, does not face any significant Commodity Price Risk.
a) The principal amount remaining unpaid as at March 31, 2021 in respect of enterprises covered under the âMicro, Small and Medium Enterprises Development Act, 2006â (MSMED) is R 7.30 Lakhs (Previous year: R 0.86 Lakhs).
b) There are no amounts of interest paid/due/payable during the year/previous year/succeeding year. Also, there is no amount of interest accrued and remaining unpaid at the end of current accounting year/previous accounting year.
c) The list of undertakings covered under MSMED was determinded by the Company on the basis of information available with the Company and has been relied upon by auditors.
iii. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated February 28, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC order. The Company will update its provision, on receiving further clarity on the subject.
a) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LICâs Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the memberâs length of service and salary at the time of retirement/termination age. Provision for gratuity is based on actuarial valuation done by an independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review. The Company aims to keep annual contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments in short to medium term.
b) Other long term benefit plan
Actuarial valuation for compensated absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the statement of profit and loss amounting to R 204.28 Lakhs (Previous year: R 279.72 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.
Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined as at the year end using the âProjected Unit Creditâ method. Gains and losses on changes in actuarial assumptions relating to defined benefit obligation are recognised in other comprehensive income whereas gains and losses in respect of other long term employee benefit plans are recognised in the statement of profit and loss.
NOTE 43USE OF ESTIMATES AND JUDGEMENTS
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
1 Provisions [Refer Note 19 and 24]2 Contingent liabilities [Refer Note 40]NOTE 44
The Company has a negative net worth as at March 31, 2021 and the current liabilities exceed current assets. The Board of Directors of the Company, at its meeting held on May 12, 2021 has approved preferential issue of warrants each convertible into one equity shares of the company to raise fund upto of H 1,20,096.96 Lakhs. The Company has also received a financial support letter from its parent company which is valid till time the Company is able to raise funds from external sources.
The global wide spread of COVID-19 has been a fluid and challenging situation facing all the industries. The Company has taken all possible effective measures to limit and keep the impact of COVID-19 under control in order to ensure business continuity with minimal disruption. The Company has considered internal and external information while finalizing various estimates in relation to its financial statement captions upto the date of approval of the financial statements by the Board of Directors.
The Company will continue to pay close attention to the development of COVID-19, and will further evaluate and actively respond to such impact on the financial position and financial performance of the Company.
There have been no events after the reporting date that require disclosure in these financial statements other than disclosed below:
The date of implementation of the Code on Wages 2019 and the Code on Social Security, 2020 is yet to be notified by the Government. The Company will assess the impact of these Codes and give effect in the subsequent financial statements when the Rules/Schemes thereunder are notified.
Figures for previous year has been regrouped/reclassified wherever considered necessary.
Terms and condition of transactions with related parties.
The sale of services to related parties are made on terms equivalent to those that prevail in arms length transactions. Outstanding balances at the year end are unsecured and interest free except for borrowing from Shanghvi Finance Private Limited and settlement occurs in cash. There have been no guarantees provided or received for any related parties receivables or payables.
* The Company has an outstanding corporate guarantee from Shanghvi Finance Private Limited amounting to R 20,000 Lakhs (Previous year: NIL) as at March 31, 2021. Refer Note 17.
Mar 31, 2018
1. Corporate Information
Sun Pharma Advanced Research Company Limited (âthe Companyâ) is a public limited company incorporated and domiciled in India and has its listing on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Registered office is located at Akota Road, Akota, Vadodara - 390 020. The Company is in the business of research & development of pharmaceutical products.
The financial statements were authorised for issue in accordance with the resolution of the board of directors on May 8, 2018.
Note : There are no trade receivables which are due from directors or other officers of the company either severally or jointly. Trade receivable comprises of receivable due from related parties of Rs.1,692.96. For terms and conditions relating to related party receivables, refer Annexure A of Note 40.
Trade receivables are non-interest bearing and are generally on terms of 30-60 days.
Disclosures relating to Share Capital
i Rights, Preferences and Restrictions attached to Equity Shares
The Company has only one class of share referred to as equity shares having a par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share however voting rights in respect of 1,584 shares which have been transferred by the Company to âSPARC Unclaimed Suspense Accountâ during the previous year in compliance with the requirements of SEBI (LODR) Regulations, 2015 is under suspension.
The Company declares and pays dividend in Indian Rupees. The final 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. The distribution will be in proportion to the number of equity shares held by the shareholders.
iv During the financial year 2017-2018, company has issued 151,51,515 convertible warrants, each convertible into, or exchangeable for, one equity share of face value of â1/- each at a price of Rs.330/- each aggregating to Rs.50,000 Lakhs to certain promoter/Non-promoter Group entities on preferential basis. The company has allotted 40,40,404 fully paid-up equity shares of face value of â1/- each of the company on conversion of equivalent number of warrants. The company has not received balance 75% of allotment money for the remaining 11,111,111 warrants as the allottees can exercise option against such warrants upto 18 months from the date of allotment i.e. upto 13 th January 2019 and hence, no equity shares have been issued for remaining warrants.
Nature and purpose of each reserve
Security premium reserve - The amount received in excess of face value of the equity shares in recognised in Security Premium Reserve. This reserve is utilised in accordance with the provisions of the Companies Act, 2013.
General reserve - The reserve arises on transfer portion on the net profit pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The Company can use this reserve for payment of dividend and issue of fully paid-up and not paid-up bonus shares.
Outstanding Bank overdraft carry an average interest rate of MCLR - 6M 3 % p.a. (March 31, 2017 : FDR 2 % p.a., April 1, 2016 : FDR 2 % p.a.)
Outstanding cash credit facility carry an average interest rate of Nil (March 31, 2017 :Nil, April 1, 2016 : base rate 1% p.a.) Outstanding borrowings carry an average interest rate of Nil (March 31, 2017 :Nil, April 1, 2016 : 10.2 % p.a.)
Note : There are no trade payable which are due to directors or other officers of the company either severally or jointly. Trade payable comprises of payable due to related parties of Rs.2,376.58. For terms and conditions relating to related party payable, Refer Annexure A of Note 40
Trade payable are non interest bearing and are generally on terms of 30-90 days.
The management assessed that cash and cash equivalents, trade receivables, loans, trade payables, other financial assets and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
There were no transfers between Level 1 and 2 in the periods.
2 CAPITAL MANAGEMENT
The Companyâs capital management objectives are:
- to ensure the Companyâs ability to continue as a going concern; and
- to provide an adequate return to shareholders through optimisation of debts and equity balance.
The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Companyâs objective for capital management is to maintain an optimum overall financial structure.
3 FINANCIAL RISK MANAGEMENT
The Companyâs activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Companyâs risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
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 Companyâs receivables from customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business. However, the Company does not have any credit risk from above financial assets as on balance sheet date.
Investments
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Companyâs reputation.
The Company has unutilised working capital lines from banks of Rs.2,989.60 Lakhs as on March 31, 2018, Rs.1,839.60 Lakhs as on March 31, 2017, Rs.1,533.08 Lakhs as on April 01, 2016.
The table below provides details regarding the contractual maturities of significant financial liabilities based on the contractual undiscounted payments :
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 risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include investments. The Company has designed risk management frame work to control various risks effectively to achieve the business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.
Foreign exchange risk
The Companyâs foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars, Euros). As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.
a) Significant foreign currency risk exposure relating to trade receivables, cash and cash equivalents and trade payables
b) Sensitivity
For the years ended March 31, 2018, March 31, 2017 and April 01, 2016, every 5% strengthening in the exchange rate between the Indian rupee and the respective currencies for the above mentioned financial assets/liabilities would decrease the Companyâs loss and increase the Companyâs equity by approximately Rs.199.14, Rs.133.69 and Rs.107.45 respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect.
Interest rate risk
The Company has no loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Companyâs exposure to interest rate risk is not significant.
Commodity rate risk
The Company being in the business of Research & Development, does not face any significant Commodity Price Risk.
4 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006
Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no outstanding dues to Micro Enterprises and Small Enterprises during the year. Hence, there is no additional disclosure required to be made in this regard. This has been relied upon by the auditors.
5 LEASES
The Company has obtained premises for its business operations (including furniture and fittings therein as applicable) under operating lease or leave and license agreements. These are generally cancellable and range between 11 months to 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms. Lease payments are recognised in the Statement of Profit and Loss under âRentâ in Note No. 30.
6 SEGMENT REPORTING
i. Primary Segment
The Company has identified âPharmaceuticals Research & Developmentâ which as per Ind AS 108 - âoperating segmentâ is considered the only reportable business segment.
The company does not have any customer (other than related parties), which whom revenue from transactions is more than 10% of companyâs total revenue.
7 RELATED PARTY DISCLOSURE
Disclosure with respect to Ind AS 24 on âRelated Party Disclosuresâ is as per Annexure - âAâ annexed.
8 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
i Contingent Liabilities
Future cash outflows in respect of the above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities. The Company does not expect the outcome of the matters stated above to have material adverse impact on the Companyâs financial condition, results of operation or cash flows.
ii Commitments
9 EMPLOYEE BENEFIT PLANS
Defined contribution plan
Contributions are made to Regional Provident Fund (RPF), Family Pension Fund, Employees State Insurance Scheme (ESIC) and other Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund and other Statutory Funds are made only by the Company. The contributions are normally based on a certain percentage of the employeeâs salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs.347.88 Lakhs (Previous year Rs.293.50 Lakhs).
Defined benefit plan
a) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LICâs Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the memberâs length of service and salary at the time of retirement/termination age. Provision for Gratuity is based on actuarial valuation done by an independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review. The Company aims to keep annual contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments in short to medium term.
Other long term benefit plan
Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the Statement of Profit and Loss amounting to Rs.640.59 Lakhs (Previous Year Rs.563.13 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.
Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined as at the year end using the âProjected Unit Creditâ method. Gains and losses on changes in actuarial assumptions relating to defined benefit obligation are recognised in other comprehensive income whereas gains and losses in respect of other long term employee benefit plans are recognised in the Statement of Profit and Loss.
Salary escalation rate
The estimates of future salary increases take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
Basis used to determine rate of return on plan assets
The rate of return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
The contribution expected to be made by the company for gratuity, during financial year ending March 31, 2019 is Rs.185.68 (Previous year Rs.61.65).
10 FIRST TIME IND AS ADOPTION RECONCILIATION
Explanation to transition to Ind AS
Ind AS 101 -âFirst-time Adoption of Indian Accounting Standardsâ requires that all Ind AS and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended March 31, 2018 for the Company, be applied retrospectively and consistently for all financial years presented, except the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as described below. The Company has recognised all assets and liabilities whose recognition is required by Ind AS and has not recognised items of assets or liabilities which are not permitted by Ind AS, reclassified items from previous GAAP to Ind AS as required under Ind AS and applied Ind AS in measurement of recognised assets and liabilities.
Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
Derecognition of financial assets and financial liabilities
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.
Classification and measurement of financial assets
The Company has assessed conditions for classification of the financial assets on the basis of the facts and circumstances that were exist on the date of transition to Ind AS.
Determining whether an arrangement contains a lease
The Company has applied Appendix C of Ind AS 17 âDetermining whether an Arrangement contains a Leaseâ to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.
Deemed cost of property, plant and equipment and intangible assets
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment and Intangible assets recognised as at April 01, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment and intangible assets.
Fair value measurement of financial assets and financial liabilities at initial recognition
The Company has applied the requirements in paragraph B10 of Ind AS 101 prospectively to transactions entered into on or after the date of transition to Ind AS. This exemption has been availed by the Company.
Notes on reconciliations between previous GAAP and Ind AS
a) Investment
Under Indian GAAP, the Company recognised current investments in mutual funds at lower of cost or fair value and noncurrent investments at cost less provision for diminution in the value of investments, if any. Under Ind AS, the Company has designated such current investments at fair value through profit or loss (FVTPL).
b) Employee benefits
Under previous GAAP, actuarial gains and losses were recognised in statement of profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of net defined benefit liability / asset which is recognised in other comprehensive income in the respective periods. Actuarial losses of Rs.45.94 as at March 31, 2017 is recognised in OCI.
c) Share issue expenses
Under previous GAAP, expenses incurred in connection with issue of shares is accumulated and amortised over a period of 5 years from the year of issue of shares, where as under Ind AS the transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. The costs of an equity transaction that is abandoned are recognised as an expense.
d) Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
11 USE OF ESTIMATES AND JUDGEMENTS
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
1 Useful lives of property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation and amortisation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.
2 Assets and obligations relating to employee benefits
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ (income) include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
3 Tax expense [Refer Note 6]
The Companyâs tax jurisdiction is India. Significant judgements are involved in determining the provision for income taxes, if any, including amount expected to be paid/recovered for uncertain tax positions. Further, significant judgement is exercised to ascertain amount of deferred tax asset (DTA) that could be recognised based on the probability that future taxable profits will be available against which DTA can be utilized and amount of temporary difference in which DTA can not be recognised on want of probable taxable profits.
4 Provisions [Refer Note 2l]
5 Contingencies (Refer Note 41)
12 STANDARDS ISSUED BUT NOT YET EFFECTIVE
Ind AS 115 Revenue from Contracts with Customers
On 28 March 2018, the Ministry of Corporate Affairs (MCA) notified the new revenue recognition standard, viz., Ind AS 115 Revenue from Contracts with Customers. Ind AS 115 is applicable for the financial years beginning on or after 1 April 2018 for all Ind AS companies. The new standard establishes a five step model related to revenue recognition from contracts with customers. It permits either âfull retrospectiveâ adoption in which the standard is applied to all of the periods presented or a âmodified retrospectiveâ adoption.
The Company is evaluating its various contractual arrangements and the available transition methods. The Company has established an implementation team to implement Ind-AS related to recognition of revenue from customers and is also evaluating the changes that may be necessary to itâs accounting systems and processes. Reliable estimates of the quantitative impact of Ind-AS 115 on the financial statements will only be possible once implementation project has been completed.
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from April 1, 2018. The Company expects the impact of this on the financial statements to be insignificant.
Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are expected to have insignificant impact on the Company.
Mar 31, 2017
1. The timing differences mainly relating to unabsorbed capital expenditure and carried forward losses under the Income Tax Act, 1961, results in a deferred tax asset as per Accounting Standard 22 on "Accounting for Taxes on Income". Deferred tax asset has been recognized in respect of unabsorbed business losses / capital expenditure, to the extent that future taxable income will be available from future reversal of any deferred tax liability recognized at the balance sheet date and is restricted to the extent of such liabilities, which management expects to be available after tax holiday period u/s 80-IB of the Income Tax Act, 1961. As a prudent measure, the excess deferred tax asset (net) of Rs, 7,895.51 Lakhs (Previous Year Rs, 5,524.85 Lakhs) in relation to the above has not been recognized in the financial statements as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.
2. The net exchange gain / (loss) included under Revenue from Operations, Other Income, Cost of Materials Consumed and Other Expenses in the Statement of Profit and Loss aggregates Rs, 179.02 Lakhs (Previous Year (Rs, 17.49 Lakhs)).
3 Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no outstanding dues to Micro Enterprises and Small Enterprises during the year. Hence, there is no additional disclosure required to be made in this regard.
4 As per the best estimate of the management, no provision is required to be made as per Accounting Standard - 29 on "Provisions, Contingent Liabilities and Contingent Assets" in respect of any present obligation as a result of a past event that could lead to probable outflow of resources, which would be required to settle the obligation.
5 Disclosure with respect to Accounting Standards-18 on "Related Party Disclosures" is as per Annexure - "A" annexed.
6 Accounting Standard (AS-19) on Leases
i The Company has obtained premises for its business operations (including furniture and fittings therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and license, or longer for the lease and are renewable by mutual consent on mutually agreeable terms.
ii Lease payments are recognized in the Statement of Profit and Loss under "Rent" in Note No. 22
7 Accounting Standard (AS-15) on Employee Benefits
Contributions are made to Government Provident Fund, Family Pension Fund, Employees'' State Insurance Corporation (ESIC) and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as an expense in respect of these defined contribution plans, aggregate Rs, 293.50 Lakhs (Previous Year Rs, 224.46 Lakhs) is included in Contribution to Provident and Other funds in Note 20.
In respect of Gratuity, contributions are made to Life Insurance Corporation of India (LIC) Recognized Group Gratuity Fund Scheme based on amount demanded by LIC. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules amounting to Rs, 563.13 Lakhs (Previous Year Rs, 449.44 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Commitments are actuarially determined using the âProjected Unit Credit'' method. Gains and Losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.
The actuarial calculations used to estimate commitments and expenses in respect of gratuity and compensated absences are based on the following assumptions which if changed, would affect the commitment''s size, funding requirements and expense.
Category of Plan Assets
The Company''s Plan Assets in respect of Gratuity are funded through the Group Schemes of the Life Insurance Corporation of India.
The estimate of future salary increases, considered in the actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.
8 Previous year''s figure have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
Accounting Standard (AS-18) â Related Party Disclosures â
Names of related parties and description of relationship
9. Key Management Personnel
Mr. Dilip S. Shanghvi, Chairman & Managing Director
Mr. Sudhir V. Valia, Director (Director and Chief Financial Officer up to 31st January, 2017)
10. Enterprise under significant Influence of Key Management Personnel (with whom transactions are entered) Sun Pharmaceutical Industries Ltd. Taro Pharmaceuticals Industries Limited
Sun Pharma Laboratories Ltd. Alkaloida Chemical Company ZRT
Sun Pharma Global FZE Ranbaxy (S.A.) (PTY) Ltd.
Sun Pharmaceutical Industries Inc. Insite Vision Inc.
Sun Pharmaceutical Industries Europe Ranbaxy (Thailand) Co. Ltd.
Taro Pharmaceuticals Inc. Sun Farmaceutica Do Brasil Ltda
Mar 31, 2014
1 Contingent Liabilities and Commitments (to the extent not provided
for)
Rs. in Thousand
As at As at
31st March, 2014 31st March, 2013
i Contingent Liabilities
Guarantees given by the
bankers against Advance
License Scheme 43,020 52,651
ii Commitments
Estimated amount of contracts
remaining to be executed
on capital 10,455 1,023
account and not provided for
2 Status of Utilisation of rights issue proceeds:
Given the highly unpredictable nature of the Company''s business of
Pharmaceutical Research and Development, the actual utilisation of the
funds varies from the projections.
** temporarily invested in Liquid Mutual Funds/Current Account with a
Bank/ Inter Corporate Deposits
3 Disclosures relating to Share Capital
i Rights, Preferences and Restrictions attached to Equity Shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs. 1 per share. Each holder of equity shares is
entitled to one vote per share however no shareholder who has not paid
call money on his/her shares shall be entitled to vote either
personally or by proxy in respect of any of such partly paid shares.
ii During the previous year, the Company had allotted 29,588,056 equity
shares of Rs. 1 each, to its equity shareholders on rights basis in the
ratio of 1 equity share of Rs. 1 each for every 7 equity shares of Rs. 1
each held, at a premium of Rs. 66 per equity share. On 60,071 (Previous
Year 261,504) equity shares, calls has remained unpaid towards equity
shares capital @ Rs.0.40 per equity share aggregating to Rs. 24 Thousand
(Previous Year Rs. 105 Thousand) reduced from Share Capital in Note 1
above and towards securities premium @ Rs. 26.60 per equity share
aggregating to Rs. 1,598 Thousand (Previous Year Rs. 6,956 Thousand).
4 The timing differences mainly relating to unabsorbed capital
expenditure and carried forward losses under the Income Tax Act, 1961,
results in a deferred tax asset as per Accounting Standard 22 on
"Accountingfor Taxes on Income". Deferred tax asset has been recognised
in respect of unabsorbed business losses/ capital expenditure, to the
extent that future taxable income will be available from future
reversal of any deferred tax liability recognised at the balance sheet
date and is restricted to the extent of such liabilities, which
management expects to be available aftertax holiday period u/s 80-IB of
the Income Tax Act, 1961. As a prudent measure, the excess deferred tax
asset (net) of Rs. 412,992 Thousand (Previous Year Rs. 495,642 Thousand) in
relation to the above has not been recognised in the accounts as there
is no virtual certainty supported by convincing evidence that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
5 The net exchange gain / (loss) included under Revenue from
Operations, Other Income, Cost of Materials Consumed and Other Expenses
in the Statement of Profit and Loss aggregates Rs. 52,364 Thousand
(Previous Year (Rs. 99,494 Thousand)).
6 Micro and Small Enterprises has been determined to the extent such
parties have been identified on the basis of information available with
the Company. This has been relied upon by the auditors.
There is no additional disclosure required to be made in this regard.
7 Accounting Standard (AS-17) on Segment Reporting
i Primary Segment
The Company has identified "Pharmaceuticals Research & Development" as
the only primary reportable business segment.
8 As per the best estimate of the management, no provision is required
to be made as per Accounting Standard - 29 on "Provisions, Contingent
Liabilities and Contingent Assets" in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources, which would be required to settle the obligation.
9 Disclosure with respect to Accounting Standards-18 on "Related Party
Disclosures" is as perAnnexure- "A" annexed.
10 Accounting Standard (AS-19) on Leases
i The Company has obtained premises for its business operations
(including furniture and fittings, therein as applicable) under
operating lease or leave and license agreements. These are generally
not non-cancellable and range between 11 months to 5 years under leave
and license, or longer for the lease and are renewable by mutual
consent on mutually agreeable terms.
ii Lease payments are recognised in the Statement of Profit and Loss
under "Rent" in Note No. 24
11 Accounting Standard (AS-15) on Employee Benefits
Contributions are made to Government Provident Fund, Family Pension
Fund, ESIC and other Statutory Funds which covers all regular
employees. While both the employees and the Company make predetermined
contributions to the Provident Fund and ESIC, contribution to the
Family Pension Fund are made only by the Company. The contributions are
normally based on a certain proportion of the employee''s salary. Amount
recognised as an expense in respect of these defined contribution
plans, aggregate Rs. 16,571 Thousand (Previous Year Rs. 14,286 Thousand).
In respect of Gratuity, Contributions are made to LIC''s Recognised
Group Gratuity Fund Scheme based on amount demanded by LIC of India.
Provision for Gratuity is based on actuarial valuation done by
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting toRs. 21,203 Thousand (Previous Year
Rs. 22,075 Thousand) and it covers all regular employees. Major drivers
in actuarial assumptions, typically, are years of service and employee
compensation. Commitments are actuarially determined using the
''Projected Unit Credit'' method. Gains and Losses on changes in
actuarial assumptions are accounted for in the Statement of Profit and
Loss.
Category of Plan Assets
The Company''s Plan Assets in respect of Gratuity are funded through the
Group Schemes of the Life Insurance Corporation of India.
The estimate of future salary increases, considered in the actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment
market.
Contribution expected to be made by the Company duringfinancial year
end ing31st March, 2015 isRs. 6,897 Thousand (Previous Year Rs. 22,613
Thousand) as per premium intimation received from LIC of India.
12 The managerial remuneration to the extent of Rs. 19,966 Thousand is in
excess of the limits approved by the Central Government. In this
regard, the Company has made further representations to the Central
Government providing the rationale for increase in the remuneration,
the response in respect of which is awaited. In case the requisite
approval is not received from the Central Government, the excess
remuneration paid would be recovered from the Whole-time Director.
13 Previous year''s figure have been regrouped/ reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Accounting Standard (AS-18) " Related Party Disclosures "
Names of related parties and description of relationship
1. Key Management Personnel
Mr. Dilip S. Shanghvi, Chairman & Managing Director
Dr. T. Rajamannar, Wholetime Director (up to 24th April, 2014)
2. Enterprise under significant Influence of Key Management Personnel
(with whom transactions are entered)
Sun Pharmaceutical Industries Ltd.
Sun Pharma Laboratories Ltd.
Sun Pharma Global FZE
Sun Pharmaceutical Industries Inc. (Upto 28th February, 2013)
Caraco Pharmaceutical Industries Ltd.
Sun Pharmaceutical Industries (Converted into Part IX Company as Sun
Pharma Medication Pvt. Ltd. w.e.f. 31st August, 2012
which amalgamated in Sun Pharma Laboratories Limited w.e.f. 1st
September 2012)
Sun Pharma Sikkim (Converted into Part IX Company as Sun Pharma Drugs
Pvt. Ltd. w.e.f. 31st August, 2012 which amalgamated in Sun Pharma
Laboratories Limited w.e.f. 1st September 2012)
Taro Pharmaceuticals Inc.
Mar 31, 2013
1 Contingent Liabilities and Commitments (to the extent not provided
for)
Rs. in Thousand
As at As at
31st March,
2013 31st March,
2012
i Contingent Liabilities
Guarantees given by the bankers against
Advance License Scheme 52,651 49,900
ii Commitments
Estimated amount of contracts remaining
to be executed on capital account 1,023 7,797
and not provided for
2 Disclosures relating to Share Capital
i Rights, Preferences and Restrictions attached to Equity Shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs. 1 per share. Each holder of equity shares is
entitled to one vote per share however, shareholder who has not paid
call money on his/her shares shall not be entitled to vote either
personally or by proxy in respect of any of such partly paid shares.
ii Equity Shares held by each shareholder holding more than 5 percent
Equity Shares in the Company are as follows :
iv During the year, the Company has allotted 29,588,056 equity shares
of Rs. 1 each, to its equity shareholders on rights basis in the ratio
of 1 equity share of Rs. 1 each for every 7 equity shares of Rs. 1 each
held, at a premium of Rs. 66 per equity share. On 261,504 equity
shares, calls has remained unpaid towards equity shares capital @ Rs.
0.40 per equity share aggregating to Rs. 105 Thousand reduced from
Share Capital in Note 1 above and towards security premium @ Rs. 26.60
per equity share aggregating to Rs. 6,956 Thousand.
3 The timing differences mainly relating to unabsorbed depreciation
and carried forward losses under the Income Tax Act, 1961, results in a
deferred tax asset as per AS 22 on "Accounting for Taxes on Income".
Deferred tax asset has been recognised in respect of unabsorbed
business losses / capital expenditure, to the extent that future
taxable income will be available from future reversal of any deferred
tax liability recognised at the balance sheet date and is restricted to
the extent of such liabilities, which management expects to be
available after tax holiday period u/s 80-IB of the Income Tax Act,
1961. As a prudent measure, the excess deferred tax asset (net) of Rs.
4,95,642 Thousand (Previous Year Rs. 4,36,838 Thousand) in relation to
the above has not been recognised in the accounts as there is no
virtual certainty supported by convincing evidence that sufficient
future taxable income will be available against which such deferred tax
assets can be realised.
4 The net exchange loss / (gain) included under Revenue from
Operations, Other Income, Cost of Materials Consumed and Other Expenses
in the Statement of Profit and Loss aggregates Rs. 99,494 Thousand
(Previous Year (Rs. 9,199 Thousand)).
5 Micro and Small Enterprises has been determined to the extent such
parties have been identified on the basis of information available with
the Company. This has been relied upon by the auditors.
There is no additional disclosure required to be made in this regard
except for principal amount remaining unpaid of Rs. Nil as on 31st
March, 2013 (Previous Year Rs. 57 Thousand).
6 Accounting Standard (AS-17) on Segment Reporting
i Primary Segment
The Company has identified "Pharmaceuticals Research & Development" as
the only primary reportable business segment.
ii Secondary Segment (by Geographical Segment)
Consequent to the issue of equity shares, during the year, to its
shareholders on rights basis, the Earnings Per Share for the previous
year has been restated in accordance with Accounting Standard (AS - 20)
on "Earnings Per Share" as notified under the Companies (Accounting
Standards) Rules, 2006.
7 As per the best estimate of the management, no provision is required
to be made as per Accounting Standard (AS-29) as notified by Companies
(Accounting Standard) Rules, 2006 in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources, which would be required to settle the obligation.
8 Disclosure with respect to Accounting Standards (AS-18) on related
party disclosure, as notified by Companies (Accounting Standard) Rules,
2006, is as per Annexure - "A" annexed.
9 Accounting Standard (AS-19) On Leases
i The Company has obtained premises for its business operations
(including furniture and fittings, therein as applicable) under
operating lease or leave and license agreements. These are generally
not non-cancellable and range between 11 months to 5 years under leave
and license, or longer for the lease and are renewable by mutual
consent on mutually agreeable terms.
ii Lease payments are recognised in the Statement of Profit and Loss
under "Rent" in Note No. 24
10 Accounting Standard (AS-15) on Employee Benefits
Contributions are made to Government Provident Fund, Family Pension
Fund, ESIC and other Statutory Funds which covers all regular
employees. While both the employees and the Company make predetermined
contributions to the Provident Fund and ESIC, contribution to the
Family Pension Fund are made only by the Company. The contributions are
normally based on a certain proportion of the employee''s salary. Amount
recognised as an expense in respect of these defined contribution
plans, aggregate Rs. 14,286 Thousand (Previous Year Rs. 12,357
Thousand).
In respect of Gratuity, Contributions are made to LIC''s Recognised
Group Gratuity Fund Scheme based on amount demanded by LIC of India.
Provision for Gratuity is based on actuarial valuation done by
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting to Rs. 22,075 Thousand (Previous
Year Rs. 15,621 Thousand) and it covers all regular employees. Major
drivers in actuarial assumptions, typically, are years of service and
employee compensation. Commitments are actuarially determined using the
''Projected Unit Credit'' method. Gains and Losses on changes in
actuarial assumptions are accounted for in the Statement of Profit and
Loss.
Category of Plan Assets
The Company''s Plan Assets in respect of Gratuity are funded through the
Group Schemes of the Life Insurance Corporation of India.
The estimate of future salary increases, considered in the actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment
market.
Contribution expected to be made by the Company during financial year
ending 31st March, 2014 is Rs. 22,613 Thousand as per premium
intimation received from LIC of India.
11 Previous year''s figure have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
1 Contingent Liabilities and Commitments (to the extent not provided
for)
Rs in Thousand
As at As at
31st March,
2012 31st March,
2011
i Contingent Liabilities
Guarantees given by the bankers against
Advance License Scheme 49,900 43,686
ii Commitments
Estimated amount of contracts remaining
to be executed on 7,797 3,727
capital account and not provided for
2 The accumulated deficit of Rs 12,12,968 Thousand in the Statement of
Profit and Loss has exceeded the aggregate of general reserve and paid
up equity share capital, resulting in the net worth being negative at Rs
6,66,086 Thousand, as represented by shareholders' funds and also that
the Company's current liabilities at Rs 14,50,042 Thousand have exceeded
its current assets at Rs 1,82,174 Thousand. However, having regard to:
(i) the nature of the Company's business; (ii) status of various
projects of the Company some of which are at advanced stage of
activity, which if successful could generate adequate cash flows; (iii)
the Company having obtained shareholders' approval at their meeting
held on 8th August, 2011 for issuing additional equity shares on a
rights basis to its existing shareholders for an amount aggregating not
in excess of Rs 20,00,000 Thousand, in respect of which the Draft Letter
of Offer had been filed with the Securities and Exchange Board of India
(SEBI) and SEBI has issued its observation letter to the Company on
25th April, 2012; the Company is in the process offinalising the Letter
of Offer and initiating the opening of the Rights Issue; and (iv) in
the interim, having procured loans and also received advances against
share application money from the promoter group companies, to meet the
fund requirements of the Company vis-a-vis the availability of funds
with the Company, these financial statements have been prepared on the
basis that the Company is a going concern and that no adjustments are
required to the carrying value of assets and liabilities.
3 Disclosures relating to Share Capital
i Rights, Preferences and Restrictions attached to Equity Shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs 1 per share. Each holder of equity shares is
entitled to one vote per share. The dividend, if any, 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.
iii Nil (Previous Year 19,22,60,055) Equity Share have been allotted as
fully paid up without payment being received in cash duringthe period
of five years immediately precedingthe date as at which the Balance
Sheet is prepared, to the shareholders of Sun Pharmaceutical Industries
Limited pursuant to scheme of demerger.
4 The timing differences mainly relating to unabsorbed depreciation
and carried forward losses under the Income Tax Act, 1961, results in a
deferred tax asset as per AS 22 on "Accounting for Taxes on Income".
Deferred tax asset has been recognised in respect of unabsorbed
business losses / capital expenditure, to the extent that future
taxable income will be available from future reversal of any deferred
tax liability recognised at the balance sheet date and is restricted to
the extent of such liabilities, which management expects to be
available after tax holiday period u/s 80-IB of the Income Tax Act,
1961. As a prudent measure, the excess deferred tax asset (net) of Rs
4,36,838 Thousand (Previous YearRs 2,09,806 Thousand) in relation to the
above has not been recognised in the accounts as there is no virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
5 The net exchange gain included under Revenue from Operations, Other
Income and Cost of Materials Consumed in the Statement of Profit and
Loss aggregates Rs 9,199 Thousand (Previous YearRs 10,413 Thousand).
6 Micro, Small and Medium Enterprises has been determined to the
extent such parties have been identified on the basis of information
available with the Company. This has been relied upon by the auditors.
There is no additional disclosure required to be made in this regard
except for principal amount remaining unpaid of Rs 57 Thousand as on
31st March, 2012 (Previous YearRs 34 Thousand).
7 Accounting Standard (AS-17) on Segment Reporting
i Primary Segment
The Company has identified "Pharmaceuticals Research & Development"
as the only primary reportable business segment.
8 As per the best estimate of the management, no provision is required
to be made as per Accounting Standard (AS-29) as notified by Companies
(Accounting Standard) Rules, 2006 in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources, which would be required to settle the obligation.
9 Disclosure with respect to Accounting Standards (AS-18) on related
party disclosure, as notified by Companies (AccountingStandard) Rules,
2006, is as per Annexure - "A" annexed.
10 Accounting Standard (AS-19) On Operating Leases
i The Company has obtained premises for its business operations
(including furniture and fittings, therein as applicable) under
operating lease or leave and license agreements. These are generally
not non-cancelable and range between 11 months to 5 years under leave
and license, or longer for the lease and are renewable by mutual
consent on mutually agreeable terms.
ii Lease payments are recognised in the Statement of Profit and Loss
under "Rent" in Note No. 24
11 Details of Derivatives Instruments and Unhedged Foreign Currency
Exposures
i The Company enters into Forward Exchange Contracts being derivative
instruments, which are not intended for trading or speculative
purposes, but for hedge purposes, to establish the amount of reporting
currency required or available at the settlement date.
12 Accounting Standard (AS-15) on Employee Benefits
Contributions are made to Government Provident Fund, Family Pension
Fund, ESIC and other Statutory Funds which covers all regular
employees. While both the employees and the Company make predetermined
contributions to the Provident Fund and ESIC, contribution to the
Family Pension Fund are made only by the Company. The contributions are
normally based on a certain proportion ofthe employee's salary.
Amount recognised as an expense in respect of these defined
contribution plans, aggregate Rs 12,357 Thousand (Previous YearRs 10,475
Thousand).
In respect of Gratuity, Contributions are made to LIC's Recognised
Group Gratuity Fund Scheme based on amount demanded by LIC of India.
Provision for Gratuity is based on actuarial valuation done by
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting to Rs 15,621 Thousand (Previous
YearRs 13,984 Thousand) and it covers all regular employees. Major
drivers in actuarial assumptions, typically, are years of service and
employee compensation. Commitments are actuarially determined using the
'Projected Unit Credit' method. Gains and Losses on changes in
actuarial assumptions are accounted for in the Statement of Profit and
Loss.
Category of Plan Assets
The Company's Plan Assets in respect of Gratuity are funded through the
Group Schemes ofthe Life Insurance Corporation of India.
The estimate of future salary increases, considered in the actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment
market.
Contribution expected to be made by the Company during financial year
ending 31st March, 2013 is Rs 16,188 Thousand as per premium intimation
received from LIC of India.
13 The Revised Schedule VI has been effective from 1st April,
2011forthe presentation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figure have been regrouped/ reclassified
wherever necessary to correspond with the current year's classification
/ disclosure.
Mar 31, 2011
1 CONTINGENT LIABILITIES NOT PROVIDED FOR
As at 31st
March, 2011 As at 31st March,
2010
Rs. in Thousand Rs. in Thousand
Guarantees given by the bankers
(against Margin Money Deposit) 43,686 37,866
on behalf of the Company
The above remuneration is within the overall limits as approved by the
shareholders of the Company and by the Central Government. Directors
sitting fees of Rs. 1,460 Thousand (Previous Year Rs. 1,720 Thousand) paid
to Non-Executive Directors is not included herein above.
No Commission was paid to Directors during the year accordingly,
computation of net profits in accordance with Section 309(5) read with
Section 349 of the Companies Act, 1956 has not been given.
The remuneration reported above excludes Gratuity and Compensated
Absences, since the same is ascertained on an aggregated basis for the
Company as a whole by way of actuarial valuation and separate values
attributable to Director is not available.
3 The Company is engaged in Pharmaceutical Research & Development in
the field of New Chemical Entity ( NCE) and New Drug Delivery System
(NDDS). These activities involve uncertainties, high risk & reward,
long gestation period and are capital intensive in nature. The Company
is registered with the Department of Scientific and Industrial Research
(DSIR), Government of India and is an approved commercial Research &
Development Company under section 80-IB of the Income Tax Act, 1961.
During the previous year, the DSIR had sanctioned a 15 year unsecured
soft loan under its Drug and Pharmaceutical Research Programme for a
project of the Company. The Company is of the view that barring
unforeseen circumstances and based on its existing revenue streams
consisting of fees for technology and royalty and considering the fact
that some of the projects being undertaken by the Company are at
advanced stages of activity, which if successful, could generate
adequate cash flows for the Company so as to meet its obligations as
they fall due and reduce / wipe off the accumulated losses. No
development cost has been capitalised during year.
7 The timing differences mainly relating to unabsorbed depreciation and
carried forward losses under the Income Tax Act, 1961, results in a
deferred tax asset as per AS-22 - on "Accounting for Taxes on Income".
Deferred tax asset has been recognised in respect of unabsorbed
business losses / capital expenditure, to the extent that future
taxable income will be available from future reversal of any deferred
tax liability recognised at the balance sheet date and is restricted to
the extent of such liabilities, which management expects to be
avaialble after tax holiday period u/s 80-IB of the Income Tax Act,
1961. As a prudent measure, the excess of deferred tax asset (net) of Rs.
210,848 Thousand (Previous Year Rs. 209,572 Thousand) in relation to the
above has not been recognised in the accounts as there is no virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
8 The net exchange gain of Rs. 10,413 Thousand (Previous Year Rs. 24,690
Thousand) is included under respective heads of Profit and Loss
Account.
9 Micro, Small and Medium Enterprises has been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
There is no additional disclosure required to be made in this regard
except for principal amount remaining unpaid of Rs. 34 Thousand (Previous
Year Rs. Nil) as on 31st March, 2011.
10 During the year, the Company has received the 2nd Installment of Rs.
41,700 Thousand against the loan of Rs. 96,600 Thousand sanctioned by the
Department of Science and Technology, Government of India under the
"Drug and Pharmaceutical Research Program" (DPRP). The loan is
repayable (along with interest) in 10 equal annual installments
commencing 1st August, 2012.
13 Other information required under Para 3 and information with regard
to matters specified in paragraph 4 of Part II to Schedule VI of the
Companies Act, 1956 is stated to the extent applicable to the Company.
14 As per the best estimate of the management, no provision is required
to be made as per Accounting Standard (AS-29) as notified by Companies
(Accounting Standard) Rules, 2006 in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources, which would be required to settle the obligation.
15 Disclosure with respect to Accounting Standard (AS-18) on related
party disclosure, as notified by Companies (Accounting Standard) Rules,
2006, is as per Annexure - "A" annexed.
16 ACCOUNTING STANDARD (AS-19) ON OPERATING LEASES
(a) The Company has obtained premises for its business operations
(including furniture and fittings, therein as applicable) under
operating lease or leave and license agreements. These are generally
not non-cancelable and range between 11 months to 5 years under leave
and license, or longer for the lease and are renewable by mutual
consent on mutually agreeable terms.
(b) Lease payments are recognised in the Profit and Loss Account under
"Rent" in Schedule 15.
17 The company enters into Forward Exchange Contracts being derivative
instruments, which are not intended for trading or speculative
purposes, but for hedge purposes, to establish the amount of reporting
currency required or available at the settlement date.
18 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS
Contributions are made to Recognised Provident Fund/ Government
Provident Fund, Family Pension Fund, ESIC and other Statutory Funds
which covers all regular employees. While both the employees and the
Company make predetermined contributions to the Provident Fund and
ESIC, contribution to the Family Pension Fund are made only by the
Company. The contributions are normally based on a certain proportion
of the employees salary. Amount recognised as an expense in respect of
these defined contribution plans, aggregate Rs. 10,475 Thousand (Previous
Year Rs. 8,721 Thousand).
In respect of Gratuity, Contributions are made to LICs Recognised
Group Gratuity Fund Scheme based on amount demanded by LIC of India.
Provision for Gratuity is based on actuarial valuation done by
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting to Rs. 13,984 Thousand (Previous Year
Rs. 12,227 Thousand) and it covers all regular employees. Major drivers
in actuarial assumptions, typically, are years of service and employee
compensation. Commitments are actuarially determined using the
ÃProjected Unit Credit method. Gains and Losses on changes in
actuarial assumptions are accounted for in the Profit and Loss Account.
Category of Plan Assets
The Companys Plan Assets in respect of Gratuity are funded through the
Group Schemes of the Life Insurance Corporation of India.
The estimate of future salary increases, considered in the actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors such as supply and demand factors in the employment
market.
Contribution expected to be made by the Company during financial year
ending 31st March, 2012 is Rs.14,244 Thousand as per premium intimation
received from LIC of India.
As, this is the fourth year in which the AS-15 has been applied, the
amounts of the present value of the obligation, fair value of plan
assets, surplus or deficit in the plan and experience adjustment
arising on plan liabilities and plan assets for the previous three
years only has been furnished.
19 Previous years figures are restated / regrouped / rearranged
wherever necessary in order to confirm to current years groupings and
classifications.
Accounting Standard (AS-18) "Related Party Disclosure" Annexure : A
Names of related parties and description of relationship
1. Key Management Personnel
Mr. Dilip S. Shanghvi, Chairman & Managing Director
Dr. T. Rajamannar, Whole time Director
2. Enterprise under significant Influence of Key Management Personnel
(with whom transactions are entered)
Sun Pharmaceutical Industries Ltd.
Sun Pharma Global FZE
Sun Pharmaceutical Industries Inc.
Sun Pharmaceutical Industries
Sun Pharma Sikkim
Sun Petrochemicals Pvt Ltd.
Mar 31, 2010
1 CONTINGENT LIABILITIES NOT PROVIDED FOR
As at 31st March 2010 As at 31st March 2009
Rs in Thousand Rs in Thousand
Guarantees given by the
bankers (against Margin
Money Deposit)
on behalf of the Company 37,866 31,189
2 The company is engaged in Pharmaceutical Research & Development in
the field of New Chemical Entity ( NCE) and New Drug Delivery System
(NDDS). These activities involve uncertainties, high risk & reward,
long gestation period and are capital intensive in nature. The Company
is registered with the Department of Scientific and Industrial Research
(DSIR), Government of India and is an approved commercial Research &
Development Company under section 80-IB of the Income Tax Act, 1961.
During the year, the DSIR has also sanctioned a 15 year unsecured soft
loan under its Drug and Pharmaceutical Research Programme for a project
of the Company. The Company is of the view that barring unforeseen
circumstances and based on its existing revenue streams consisting of
fees for technology and royalty and considering the fact that some of
the projects being undertaken by the Company are at advanced stages of
activity, which if successful, could generate adequate cash flows for
the Company so as meet its obligations as they fall due and reduce /
wipe off the accumulated losses. No development cost has been
capitalised during year.
3 The timing differences mainly relating to unabsorbed depreciation and
carried forward losses under the Income Tax Act, 1961, results in a
deferred tax asset as per AS-22 Ã on ÃAccounting for Taxes on IncomeÃ.
Deferred tax asset has been recognised in respect of business losses to
the extent that future taxable income will be available from future
reversal of any deferred tax liability recognised at the balance sheet
date and is restricted to the extent of such liabilities. As a prudent
measure, the excess of deferred tax asset (net) of Rs. 209,572 Thousand
(Previous Year Rs. 135,384 Thousand) in relation to the above has not
been recognised in the accounts as there is no virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realised.
4 The net exchange gain of Rs.24,690 Thousand (Previous Year Rs. 6,963
Thousand) is included under respective heads of Profit and Loss
Account.
5 There are no Micro, Small and Medium Enterprises, as defined in the
Micro, Small and Medium Enterprises Development Act, 2006 to whom the
Company owes dues on account of principal amount together with interest
and accordingly no additional disclosures have been made.
The above information regarding Micro, Small and Medium Enterprises has
been determined to the extent such parties have been identified on the
basis of information available with the Company. This has been relied
upon by the auditors.
6 During the current year, the Department of Science and Technology
has sanctioned a loan of Rs. 96,600 Thousand of which the Company has
received the first installment of Rs. 21,300 Thousand as at March 31,
2010. The balance 2 installments amounting to Rs. 75,300 Thousand will
be received over next two years. The said loan is given to the Company
under the ÃDrug and Pharmaceutical Research Programà (DPRP). The loan
is repayable (along with interest ) annually in 10 equal installments
commencing August 1, 2012.
7 Other information required under Para 3 and information with regard
to matters specified in paragraph 4 of Part II to Schedule VI of the
Companies Act, 1956 is stated to the extent applicable to the Company.
8 As per the best estimate of the management, no provision is required
to be made as per Accounting Standards (AS- 29) as notified by
Companies (Accounting Standard) Rules, 2006 in respect of any present
obligation as a result of a past event that could lead to probable
outflow of resources, which would be required to settle the obligation.
9 Disclosure with respect to Accounting Standards (AS-18) on related
party disclosure, as notified by Companies (Accounting Standard) Rules,
2006, is as per Annexure - ÃAÃ annexed.
10 ACCOUNTING STANDARD (AS-19) ON OPERATING LEASES
(a) The company has obtained premises for its business operations
(including furniture and fittings, therein as applicable) under
operating lease or leave and license agreements. These are generally
not non-cancelable and range between 11 months to 5 years under leave
and license, or longer for the lease and are renewal by mutual consent
on mutually agreeable terms.
(b) Lease payments are recognised in the Profit and Loss Account under
ÃRentà in Schedule 14.
11 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS
Contributions are made to Recognised Provident Fund/ Government
Provident Fund, Family Pension Fund, ESIC and other Statutory Funds
which covers all regular employees. While both the employees and the
Company make predetermined contributions to the Provident Fund and
ESIC, contribution to the Family Pension Fund are made only by the
Company. The contributions are normally based on a certain proportion
of the employeeÃs salary. Amount recognised as an expense in respect of
these defined contribution plans, aggregate to Rs. 8,721 Thousand
(Previous Year Rs 7,066 Thousand).
Contributions made to LIC of IndiaÃs Recognised Group Gratuity Fund
scheme in respect of gratuity is in excess by Rs. Nil (Previous Year
Rs. 675 Thousand) as compared to the actuarial valuation obtained from
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting to Rs. 12,227 Thousand (Previous
Year Rs. 10,417 Thousand) and it covers all regular employees. Major
drivers in actuarial assumptions, typically, are years of service and
employee compensation. Commitments are actuarially determined using
the ÃProjected Unit Credità method. Gains and Losses on changes in
actuarial determination are accounted for in the Profit and Loss
Account.
12 Previous yearsà figures are restated / regrouped / rearranged
wherever necessary in order to confirm to current yearsà groupings and
classifications.
Accounting Standard (AS-18) à Related Party Disclosure à Annexure : ÃAÃ
Names of related parties and description of relationship
1. Key Management Personnel
Mr. Dilip S Shanghvi, Chairman & Managing Director
Dr. T. Rajamannar, Whole time Director
Mr. Sudhir V. Valia, Director
2. Enterprise under significant Influence of Key Management Personnel
Sun Pharma Global Inc. BVI. Sun Pharmaceutical Industries Ltd.
Sun Pharma Global FZE Universal Enterprises Pvt. Ltd.
Sun Pharmaceutical (Bangladesh) Ltd. Sun Petrochemicals Pvt Ltd.
Sun Pharma De Mexico SA DE C.V. Shantilal Shanghvi Foundation
SPIL De Mexico SA DE C.V. Sun Speciality Chemicals Pvt Ltd.
Sun Farmaceutica Ltda à Brazil Navjivan Rasayan (Gujarat) Pvt Ltd.
Sun Pharmaceutical Industries Inc. Sun Pharma Exports
Sun Pharmaceuticals UK Ltd Sun Pharmaceutical Industries
ALKALOIDA Chemical Company ZRT Sun Pharma Sikkim
(Formerly known as ALKALOIDA Chemical Company Exclusive Group Limited)
Aditya Acquisition Company Ltd.
Caraco Pharmaceutical Laboratories Ltd. Aditya Thermal Energy Pvt.
Ltd.
Caraco Pharma Inc. Sun Fastfin Services Pvt. Ltd.
Zao ÃSun Pharma Industries Limitedà Alfa Infraprop Pvt. Ltd.
Sun Pharmaceutical Peru S.A.C. SPARC Bio-Research Pvt. Ltd.
OOO ÃSun Pharmaceutical Industriesà Ltd.
Sun Pharmaceutical Industries (Australia) PTY. Ltds.
Sun Pharmaceuticals France
Sun Pharmaceuticals Germany GmbH
Sun Pharmaceuticals Italia S.R.L.
Sun Pharmaceutical Industries (Europe) B.V.
Sun Pharmaceutical Spain, SL.
Sun Pharmaceuticals (SA) (Pty) Ltd-South Africa
Sun Development Corporation
Chattem Chemical Inc.
TKS Farmaceutica Ltda.
Sun Global Canada Pty. Ltd.
In compliance with Clause 49 of the Listing Agreement with Stock
Exchanges, the Company submits the report on the matters mentioned in
the said Clause and lists the practices followed by the Company.
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Sun Pharma Advanced Research Company Ltd. குறித்த கூடுதல் தகவல்களை
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- காலாண்டு முடிவுகள்
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Sun Pharma Advanced Research Company Ltd. அறிக்கை
- கணக்கியல் கோட்பாடுகள்
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Sun Pharma Advanced Research Company Ltd. கார்ப்பரேட் அறிவிப்புகள்
- புத்தக முடிவு
- நிர்வாகக் குழுக் கூட்டங்கள்
