The following discussion of our fmancial condition and results of operations should be read in conjunction with our Restated Consolidated Financial Information on page 267.
Our Companys fmancialyear commences on April 1 and ends on March 31 of the immediately subsequentyear, and references to a particular fiscal year are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for Fiscal 2024, 2023 and 2022, included herein is based on or derived from our Restated Consolidated Financial Information included in this Draft Red Herring Prospectus. For further information, see "Restated Consolidated Financial Information" beginning on page 267. Please also refer to "Definitions and Abbreviations" on page 1 for certain terms used in this section. The Restated Consolidated Financial Information is based on our audited financial statements and is restated in accordance with the Companies Act, 2013, and the SEBIICDR Regulations. Our audited financial statements are prepared in accordance with Indian Accounting Standards, which differs in certain material respects with IFRS and U.S. GAAP.
This Draft Red Herring Prospectus also contains certain forward-looking statements that involve risks, assumptions, estimates and uncertainties. Our actual results could differ from those anticipated in these forward- looking statements as a result of certain factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See "Forward-Looking Statements" on page 33.
Unless the context otherwise requires, in this section, references to "we", "us", "our" "our Company" or "the Company" refers to Senores Pharmaceuticals Limited and its Subsidiaries on a consolidated basis.
Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled "Overview of the Global Pharma Market" dated July 24, 2024 (the "F&S Report", and the date of the F&S Report, the "Report Date") which is exclusively prepared for the purpose of the Offer and issued by Frost & Sullivan ("F&S") and is exclusively commissioned for an agreed fee and paid for by our Company in connection with the Offer. F&S was appointed pursuant to an engagement letter entered into with our Company dated March 29, 2024. F&S is not related in any other manner to our Company. The data included herein includes excerpts from the F&S Report and may have been re-ordered by us for the purposes ofpresentation. Further, the F&S Report was prepared on the basis of information as of specific dates and opinions in the F&S Report may be based on estimates, projections, forecasts and assumptions that may be as of such dates. F&S has prepared this study in an independent and objective manner, and it has taken all reasonable care to ensure its accuracy and has further advised that it has taken due care and caution in preparing the F&S Report based on the information obtained by it from sources which it considers reliable. Unless otherwise indicated, financial, operational, industry and other related information derived from the F&S Report and included herein with respect to any particular year refers to such information for the relevant calendar year. A copy of the F&S Report will be available on the website of our Company at https://senorespharma.com/reportfrom the date of the Red Herring Prospectus until the Bid/ Offer Closing Date. Further, the F&S Report is not a recommendation to invest or disinvest in any company covered in the report. Prospective investors are advised not to unduly rely on the F&S Report. The views expressed in the F&S Report are that of F&S. For more information and risks in relation to commissioned reports, see "Risk Factors - Certain sections of this Draft Red Herring Prospectus contain information from the F&S Report which we commissioned and purchased and any reliance on such information for making an investment decision in the Offer is subject to inherent risks" on page 68. Also see, "Certain Conventions, Presentation of Financial, Industry and Market Data - Industry and Market Data " on page 32.
OVERVIEW
We are a global research driven pharmaceutical company engaged in developing and manufacturing a wide range of pharmaceutical products predominantly for the Regulated Markets across various therapeutic areas and dosage forms, with a presence in Emerging Markets. Our strength lies in identifying, developing and manufacturing a diverse range of specialty, underpenetrated and complex pharmaceutical products establishing us as a preferred partner to certain customers. Through data analytics, research, market assessment and experienced management, we strategically identify commercially underpenetrated molecules to launch products in the Regulated and Emerging Markets. We leverage our R&D capabilities to develop and manufacture a portfolio of differentiated complex pharmaceutical products. Our focus on quality and our ability to identify specialty and complex molecules has resulted in an extensive pipeline of curated complex products spanning diverse dosage forms and therapeutic domains, demonstrated through our partnerships in the Regulated Markets with prominent foreign and Indian pharmaceutical companies including Prasco LLC, Lannett Company Inc., Jubilant Cadista Pharmaceuticals Inc., Alkem Laboratories Limited, Sun Pharmaceuticals Industries Limited, Dr. Reddys Laboratories Inc. and Cipla USA Inc.
Our business is primarily focussed on the Regulated Markets of US and Canada. We have a presence in the Emerging Markets across 43 countries. We also manufacture critical care injectables and APIs.
Regulated Markets Business
Our Regulated Markets Business is carried out through our two subsidiary companies, Havix, which houses our US FDA approved oral solid dosage ("OSD") facility at Atlanta, US and, SPI which holds our intellectual property and enters into agreements with our marketing partners. Our Regulated Markets Business primarily serves the US and Canada markets. We are in the process of expanding our reach into the Regulated Market of UK.
The table below sets out the breakdown of our revenue from operations in the Regulated Markets from Marketed Products and CDMO/ CMO, for the indicated periods:
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Sr. No Business Segment (Regulated Markets) | Revenue contribution (in Rs. million) | Percentage of revenue from operations from the Regulated Markets (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations from the Regulated Markets (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations from the Regulated Markets (%) |
| m Marketed Products | 1307.03 | 90.05% | 207.40 | 99.31% | 7.50 | 84.57% |
| (a) ANDA Products | 716.37 | 49.35% | 195.01 | 93.38% | 7.50 | 84.57% |
| (b) Sourced Products | 590.66 | 40.69% | 12.38 | 5.93% | 0 | 0.00% |
| (II) CDMO/CMO | 144.49 | 9.95% | 1.45 | 0.69% | 1.37 | 15.43% |
| Total Revenue from Regulated Markets | 1451.52 | 100.00% | 208.85 | 100.00% | 8.87 | 100.00% |
Emerging Markets Business
We develop and manufacture pharmaceutical products across various therapeutic areas for the Emerging Markets through our WHO-GMP approved manufacturing facility at Chhatral (Ahmedabad), Gujarat. Our Chhatral Facility caters to countries in the Emerging Markets including Philippines, Uzbekistan Tanzania and Peru. As of May 31, 2024, we marketed our products in 43 countries in the Emerging Markets and have obtained product registrations for 182 products and have filed product registrations for 245 products. Our Chhatral Facility has received approvals from the regulatory bodies of 10 countries.
RPPL, our Subsidiary, through which we undertake our Emerging Markets Business became our subsidiary with effect from December 14, 2023. Accordingly, we do not have any revenue from operations from the Emerging Markets Business for Fiscal 2023 and Fiscal 2022. The revenue from operations from our Emerging Markets Business in Fiscal 2024 is the revenue earned from December 14, 2023 to March 31, 2024. The table below sets out our breakdown of revenue from operations in the Emerging markets from our business models, for the indicated periods:
| Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||
| Sr. No Business Segment* | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) |
| (A) Distributor Model | 239.64 | 54.21% | - |
- |
||
| (B) P2P Model | 200.32 | 45.32% | - |
- |
- |
- |
| (C) CDMO | 2.06 | 0.47% | - |
- |
- |
- |
| Total Revenue from Emerging Markets | 442.02 | 100.00% | - | - | - | - |
* As of March 31, 2024, we have not commenced any business under the own brands business model of our Emerging Markets Business. Critical Care Injectables Business
We launched our Critical Care Injectables Business in August, 2022 for supply of critical care injectables across India to various hospitals through our distributors which was launched to leverage our injectable manufacturing capabilities. Part of the critical care injectables are manufactured at our Chhatral Facility and part sourcing is done from injectables players in the Indian market. As of March 31, 2024, we have launched 54 products in major therapeutic segments including antibiotics, anti-bacterial, anti-fungal and blood line. As of March 31, 2024, we have presence in several hospitals across states in India and we conduct our business by tying up with distributors in various states and also by entering into arrangements with hospitals in India.
API Business
We commenced the business of manufacturing APIs with the objective of having an API manufacturing facility as a backward integration activity. While our API business currently caters to the domestic market and SAARC countries, in the medium to long-term we intend to manufacture APIs for the Regulated Markets and also in the semi-regulated markets as a direct product sale. We manufacture APIs through our Naroda Facility and are in the process of setting up a new greenfield unit for the manufacture of APIs at Chhatral, Gujarat. As of March 31, 2024, we have successfully commercialized seven APIs which includes oncology APIs.
The table below sets out our breakdown of revenue from our business segments, for the indicated periods:
| Fiscal 2024 | Fiscal 2023# | Fiscal 2022#* | ||||
| Sr. No Business Segment | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) |
| (A) Regulated Markets Business | 1,451.52 | 67.66% | 207.40 | 58.69% | 8.87 | 6.26% |
| (B) Emerging Markets Business | 442.02 | 20.60% | - | - | - | - |
| (C) Critical Care Injectables Business | 57.10 | 2.66% | 17.05 | 4.83% | - | - |
| (D) API Business | 139.02 | 6.48% | 19.78 | 5.60% | - | - |
| (E) Other Operational income | 55.58 | 2.59% | 109.14 | 30.89% | 132.83 | 93.74% |
| Total Revenue from Operations | 2,145.24 | 100.00% | 353.37 | 100.00% | 141.70 | 100.00% |
# RPPL, our Subsidiary, through which we undertake our Emerging Markets Business became our subsidiary with effect from Decembe r 14, 2023. Accordingly, we do not have any revenue from operations from the Emerging Markets Business for Fiscal 2023 and Fiscal 2022. The revenue from operations from our Emerging Markets Business in Fiscal 2024 is the revenue earned from December 14, 2023 to March 31, 2024.
* Our API Business does not have any revenue from operations in Fiscal 2022 since this business was commenced by us in Fiscal 2023. SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATION
The results of our operations and our financial conditions are affected by numerous factors and uncertainties, many of which may be beyond our control, including as discussed in "Our Business" and "Risk Factors", beginning on pages 188 and 35. Set forth below is a discussion of certain factors that we believe may be expected to have a significant effect on our financial condition and results of operations:
Our Manufacturing Facilities, particularly our US FDA approved formulation facility in the US
Our manufacturing capabilities form a key driver for the growth of our revenue from operations. We manufacture products for the Regulated Markets through our US FDA approved OSD facility at Atlanta, US. The Atlanta Facility has a strong regulatory track record and has been audited and approved by the US FDA four times since commencement of its operations, with the latest audit being completed in April 2024. The Atlanta Facility is also (i) approved by the DEA which makes us eligible for manufacturing formulations having controlled substances in the US market; and (ii) compliant with the Trade Agreements Act and the Buy American Act which is a pre-requisite for catering to government supplies in the US market. Our Atlanta Facility also caters to certain jurisdictions within the Semi-Regulated Markets including South Africa, Saudi Arabia and Israel
We believe our ability to serve the Regulated Markets through our US FDA-approved formulation manufacturing facility in the US provides us with a distinct competitive advantage. This approval not only ensures compliance with stringent regulatory standards but also enhances our credibility and market reach, positioning us favourably against competitors.
In order to continue to grow our manufacturing capabilities for our business, it is essential for us to increase our formulations manufacturing capacity across dosage forms by pursuing strategic acquisitions, building additional manufacturing units and driving efficiencies in our existing production lines by leveraging technology and improving human intervention.
It is also important for us to focus on improving capacity utilization at our manufacturing units. Higher capacity utilization means higher volumes of products manufactured, which in turn drives our sales of products and revenue from operations. The table below sets out our total annual installed capacity and capacity utilization of our Atlanta Facility for the periods indicated:
| Sr. No Category | As at and for the year ended March 31, 2024 | As at and for the year ended March 31, 2023 | As at and for the year ended March 31, 2022 | ||||||
| Annual Installed Capacity (in million) | Capacity Utilization (in million) | Capacity Utilization (%) | Annual Installed Capacity (in million) | Capacity Utilization (in million) | Capacity Utilization (%) | Annual Installed Capacity (in million) | Capacity Utilization (in million) | Capacity Utilization (%) | |
| A) Capsule Total | 38.40 | 10.43 | 27.15% | 29.25 | 5.97 | 20.42% | 11.52 | 1.69 | 14.69% |
| B) Tablet Total | 132.48 | 25.58 | 19.31% | 50.75 | 12.96 | 25.54% | 48.90 | 6.92 | 14.15% |
| Grand Total | 170.88 | 36.01 | 21.07% | 80.00 | 18.93 | 23.67% | 60.42 | 8.61 | 14.25% |
* As certified by Dev Consultant, Chartered Engineer by way of their certif?cate dated July 23, 2024.
# Assuming the Atlanta Facility is working for 256 days.
A slowdown or shutdown of our Manufacturing Facilities could have an adverse effect on our results of operations. See " Risk Factors- "Our business is dependent and will continue to depend on our manufacturing and research and development facilities, and we are subject to certain risks in our manufacturing process such as the breakdown or failure of equipment, industrial accidents, severe weather conditions and natural disasters, which may have an adverse impact on our financial condition and results of operations."
Our R&D capabilities
Innovation and new product development is critical to our growth of revenue from operations and profitability, and we are committed to innovation and continuous improvement. We have a formulation development laboratory at our Atlanta Facility which acts as our front-end R&D center. This R&D laboratory in the US is supported by a back-end R&D facility in India which helps us in dossier preparation and the submission of ANDA applications in a time and cost-efficient manner.
We identify niche products based on information available on public databases and on the basis of our internal research carried out to identify relevant product opportunities in the US market. We undertake the formulation development process which involves various steps such as R&D to establish API equivalency, formulation development, conducting bioequivalence studies, stability studies and other technical support services partly in our R&D facilities located in the US and in India and partly on an outsourcing basis. Upon completion of product identification and when the product development reaches an advanced stage, we approach the identified marketing or distribution partners in the Regulated Markets for in-licensing. Once the arrangement is confirmed, the products are filed and after approval then launched by the distribution and marketing companies, while the manufacturing of products takes place at the Atlanta Facility. Our strength lies in our ability to identify, research, develop and manufacture in-house pharmaceutical products for high-growth therapeutic areas, for which there is limited competition.
The table below sets out our investments in R&D activities, for the indicated periods:
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
| Amount (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | Revenue contribution (in Rs. million) | Percentage of revenue from operations (%) | |
| R&D Investment* | 713.35 | 33.25% | 390.11 | 110.40% | 50.02 | 35.30% |
* R&D Investments are additions in intangibles developed and under development related to product development.
We have consistently invested in our R&D initiatives to grow our differentiated product portfolio for both the domestic and international markets. Our R&D operations is the growth engine for our business, and we will continue to focus on expanding our research activities for our CDMO and manufacturing operations. We believe our R&D capabilities are the cornerstone of our success, empowering us to consistently innovate and create a niche product portfolio. As we continue to prioritize on product innovation, our R&D remains a key strength that drives our growth and positions us for long-term success in regulated and emerging markets.
Our profitability therefore largely depends on the success of our R&D activities.
Well established relationships with our marquee customer base
Our results of operations significantly depend upon our relationships with clients. We have entered into long-term marketing arrangements with major generic pharmaceutical and marketing companies which operate in the Regulated Markets including Lannett Company Inc., Prasco LLC, Jubilant Cadista Pharmaceuticals Inc., Sun Pharmaceuticals Industries Limited, Cintex Services LLC and Dr. Reddys Laboratories Inc. We typically enter into long term marketing agreements ranging from for a
period ranging between 5-7 years with our which results in predictable and stable cash flows. Our established track record is a strong indicator of the acceptance of our products in the Regulated Markets.
Through strategic alliances with leading pharmaceutical companies worldwide, we forge enduring relationships built on mutual trust and shared objectives. These long-term arrangements guarantee a steady flow of recurring revenue streams, bolstering our financial resilience and fortifying our market presence on a global scale. Our commitment to sustained collaboration not only drives profitability but also strengthens our reputation as a reliable and preferred partner within the global pharmaceutical landscape.
Our customer engagements are dependent on us delivering quality products consistently. We aim at putting great importance on maintaining our relationships with our top pharmaceutical customers, building our customer base and strengthening our product basket for existing customers.
Our Product Portfolio
Over the last few years, we have expanded our operations and experienced considerable growth. Our approach on product selection strategy for the Regulated Markets is to target the development and manufacture of novel and complex niche products which have market potential in the small to mid-market range, where typically large size global pharmaceutical companies are not present and therefore the competition is lesser. We follow a product identification strategy wherein we analyse the data available on various databases, data on government sourcing, as well as insights which we obtain relating to new molecular application trends from the distribution business of our associate company to various pharmaceutical companies in India and other markets. Following this strategy, we have 19 ANDAs approved by the US FDA and we have commercialized 21 products in the US and Canada markets. As of May 31, 2024, we have identified and filed six ANDAs, six products are on stability, two products have ongoing exhibits, three products are ready for exhibit and 34 ANDAs are under development. Of the 19 ANDAs for which we have received approval, four products are CGT designated products, which implies the availability of an exclusivity period of six months for marketing of the product during which no other company manufacturing generic drugs can launch versions of the same product (Source: F&S Report).
In the Emerging Markets, we have adopted a product identification and launch approach by registering and launching complex niche products which are widely sold in Regulated Markets, but which we have chosen to launch in the Emerging Markets instead of launching the products in the Regulated Markets to receive benefits of relatively less competition for these products in the Emerging Markets. All these products are under patent protection in the US markets and are not available in some countries within the Emerging Markets. Through this product identification approach, as of May 31, 2024, we are marketing our products in 43 countries in the Emerging Markets and have obtained product registrations for 182 products and have filed product registrations for 245 products. This strategy of product selection has helped us rapidly grow our business in the Emerging Markets.
We also believe that our differentiated product portfolio has and will continue to protect us, to a large extent, from product pnce erosion resulting from pnce control measures. Further, we expect to derive higher profit margins as we scale our product portfolio and capabilities, and that certain new products may in the future account for significant portions of our revenue. However, such growth requires managing complexities across all aspects of our business, including those associated with increased headcount, integration of acquisitions, expansion of international operations, expansion of manufacturing and R&D facilities, execution on new product lines and implementations of appropriate systems and controls to grow the business. The success in the growth of our product portfolio and business will affect our results of operations and cash flows. See "Risk Factors- Our inability to successfully implement some or all our business strategies in a timely manner or at all could have an adverse effect on our business. "
Regulatory framework and quality compliance
We operate in a highly regulated industry and our operations, including our development, testing, manufacturing, marketing and sales activities, are subject to extensive laws and regulations in India and other countries. We are required to obtain and maintain a number of statutory and regulatory permits and approvals under central, state and local government rules in India, generally for carrying out our business and for each of our manufacturing facilities. Such requisite licenses, permits and authorizations including local land use permits, manufacturing permits, and environmental, health and safety permits. We are also subject to various laws and regulations in the international markets where we market and sell our products and have ongoing duties to regulatory authorities in these markets including the U.S. Food and Drug Administration ("USFDA"), Department of Biotechnology of the Ministry of Science and Technology of India, the Ministry of Environment of India, the Department of Pharmaceuticals of the Ministry of Chemical and Fertilizer of India, the United Kingdoms Medicines and Healthcare Products Regulatory Agency ("U.K. MHRA"), the Health Product Compliance Directorate of Canada ("Health Canada"), and the European Directorate for the Quality of Medicines & HealthCare ("EDQM"), National Agency for Food and Drug Administration and Control of Nigeria ("NAFDAC"), Food and Drugs Authority of Ghana ("Ghana FDA") and other regulatory agencies.
In order to serve our domestic and international markets, we have invested significant resources in the development of our manufacturing facilities, which have been built in accordance with the cGMP guidelines. Pharmaceutical companies, such as
ours, have obligations to, and are required to comply with the regulations and quality standards stipulated by, regulators in India and other jurisdictions. Most of our manufacturing facilities have received several major regulatory approvals and accreditations which enable us to supply our products in regulated and other markets. We continuously invest in the improvement of our manufacturing facilities to ensure they remain in compliance with the relevant regulations and have functions dedicated to addressing improvement areas in our facilities. Our manufacturing facilities and products are subject to periodic inspection/audit by regulatory agencies and customers, and if we are not in compliance with any of their requirements, our facilities and products may be the subject of a warning letter, which could result in the withholding of product approval for new products. See " Risk Factors- Any manufacturing or quality control problems may damage our reputation for high quality production and expose us to potential litigation or other liabilities, which would negatively impact our business, prospects, results of operations and fnancial condition" on page 40 and "Risk Factors- We are subject to strict technical specifications, quality requirements, regular inspections and audits by our customers. Our failure to comply with the quality standards and technical specifications prescribed by such customers may lead to loss of business from such customers and could negatively impact our business, results of operations and financial condition, including cancellation of existing and future orders which may expose us to warranty claims" on page 36.
Changes in these laws and regulations may increase our compliance costs and adversely affect our business, prospects, results of operations and financial condition. If there is any failure by us to comply with the applicable regulations or if the regulations governing our business are amended, we may incur increased costs, be subject to penalties, have our approvals and permits revoked or suffer a disruption in our operations, any of which could adversely affect our business, prospects, results of operations and financial condition. Moreover, in countries where we have limited experience, we are subject to additional risks related to complying with a wide variety of local laws, including restrictions on the import and export of certain intermediates, drugs, technologies and multiple and possibly overlapping tax structures. Further, regulatory requirements are still evolving in many markets and are subject to change and as a result may, at times, be unclear or inconsistent. Consequently, there is increased risk that we may inadvertently fail to comply with such regulations, which could lead to enforced shutdowns and other sanctions imposed by the relevant authorities, as well as the withholding or delay in receipt of regulatory approvals for our new products.
Inorganic Growth through synergistic acquisitions
We rely on inorganic growth to increase our revenue and expand our geographic presence. We have, in the past, evaluated and executed strategic acquisitions of companies, products and technologies or entered into partnerships to strengthen our capabilities. We have in the past acquired strategic controlling stake in the Havix and in RPPL in Fiscal 2024. For details, see "History and Certain Corporate Matters- Details regarding material acquisitions or divestments of business/ undertakings, mergers, amalgamations, and revaluation of assets, if any, in the last ten years" on page 229. To complement our organic growth and internal expertise, we may also pursue strategic acquisitions of companies, products and technologies that we believe will add to our capabilities and technical expertise or enter into partnerships to strengthen our product and technology infrastructure and which we expect would allow us to both deepen our presence in our existing markets and facilitate our entry into new markets.
Identifying suitable acquisition and partnership opportunities can be difficult, time consuming and costly. In addition, the anticipated benefit of many of our future acquisitions and partnerships may not materialize. If an acquisition or partnership turns out to be unsuccessful, we may face additional costs as well as divest the acquisition or terminate the partnership, which can be costly and time-consuming. The benefits and costs arising from our acquisitions and partnerships affect our results of operations and cash flows
SIGNIFICANT ACCOUNTING POLICIES
Set forth below is a summary of our most significant accounting policies adopted in preparation of the Restated Consolidated Summary Statements.
1. Company Information:
The Restated Consolidated Financial Statements comprises financial statements of Senores Pharmaceuticals Limited (Previously "Senores Pharmaceuticals Private Limited") (‘Senores India or ‘the Company or ‘the Holding Company) and its subsidiaries (Collectively ‘the Group). The Holding Company is domiciled in India having its registered office located at 1101 to 1103, 11th floor, South Tower, One 42 Opp. Jayantilal Park, Ambali Bopal Road, Ahmedabad - 380054 in the State of Gujarat, India. The Group is a global research driven pharmaceutical group focused on developing and manufacturing a wide range of pharmaceutical products predominantly for the Regulated Markets across major therapeutic areas and dosage forms. Our business is primarily focussed on the Regulated Markets of US and Canada. We also have a strong presence in the Emerging Markets across 43 countries. We also manufacture critical care injectables and APIs.
The Board of Directors approved these Restated Consolidated Financial Statements for the year ended 31st March, 2024, 31st March, 2023 & 31st March 2022 and authorized to issue on July H4, 2024.
2. Basis of Preparation and Presentation
2.1 Statement of compliance
(i) Compliance with Indian Accounting Standards (Ind AS)
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per Section 133 of the Companies Act, 2013 ("the Act"), as amended read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
(ii) Basis of Preparation and Presentation
The Restated Consolidated Financial Statement has been prepared for inclusion in the draft red herring prospectus to be filed by the Company with the Securities and Exchange Board of India (‘SEBI), the BSE Limited and the National Stock Exchange of India Limited, in connection with proposed initial public offering of its equity shares of the Company ("Offer"). The Restated Consolidated Financial Statements comprises the restated consolidated statement of assets and liabilities as at 31 March 2024, 31 March 2023 and 31 March 2022, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated statement of cash flows, the restated consolidated statement of changes in equity and notes forming part of the consolidated financial information for years ended 31 March 2024, 31 March 2023 and 31 March 2022, and the summary of material accounting policies adopted in preparation of restated consolidated financial statements (hereinafter collectively referred to as "Restated Consolidated Financial Statements").
The Restated Consolidated Financial Statements have been prepared by the management of the Company in accordance with the requirements of:
- Section 26 of part I of Chapter III of the Act;
- The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("SEBI ICDR Regulations") and
- Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (ICAI), as amended (the "Guidance Note")
The Restated Consolidated Financial Statements have been prepared on the historical cost convention on the accrual basis except for certain assets and liabilities that are required to be carried at fair values by Ind AS.
These Restated Consolidated Financial Statements have been compiled by the management from:
a. Special Purpose Consolidated Financial Statements for the year ended March 31,2022 of the Group prepared in accordance with Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 (‘Ind AS), and the other relevant provisions of the Act, had been approved by the Board of Directors at their meeting held on 11th July, 2024;
b. Special Purpose Consolidated Financial Statements for the year ended March 31, 2023 of the Group prepared in accordance with Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 (‘Ind AS), and the other relevant provisions of the Act, had been approved by the Board of Directors at their meeting held on 11th July, 2024.
c. Audited Consolidated Financial Statements of the Group as at and for the financial year ended March 31, 2024, prepared in accordance with Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 (‘Ind AS), and the other relevant provisions of the Act, had been approved by the Board of Directors at their meeting held on 11th July, 2024.
In pursuance to SEBI ICDR Regulations and the Guidance note issued by ICAI, the aforesaid special purpose Ind AS financial statements have been prepared solely for the purpose of preparation of these Restated Consolidated Financial Statements for inclusion in the draft red herring prospectus in relation to the proposed Offer. As such these special purpose Ind AS financial statements are not suitable for any other purpose other than for the purpose of preparation of Restated Consolidated Financial Statements and are also not financial statements prepared pursuant to any requirements under section 129 of the Companies Act, 2013, as amended.
The accounting policies have been consistently applied by the Company in preparation of the Restated Consolidated Financial Statements.
(iii) Basis for Consolidation
The Restated Consolidated Financial Statements comprise the financial statements of the Holding Company and its subsidiaries. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when The Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Restated Consolidated Financial Statements from the date the company gains control until the date the company ceases to control the subsidiary.
Restated Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a member of the Group uses accounting policies other than those adopted in the Restated Consolidated Financial Statements for like transactions and events in similar circumstances, appropriate adjustments are made to that Group members financial statements in preparing the Restated Consolidated Financial Statements to ensure conformity with the Group s accounting policies.
The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of The Company, i.e., year ended on 31st March. The end of reporting period of the Indian subsidiary is the same as of the Holding Company.
Consolidation Procedure
- On Consolidation, items of Assets, Liabilities, income and expenses are combined on line-by-line basis after eliminating the Intra Group Transactions and eliminating profit / (loss) arising out on Intra Group Transactions.
- Offset (eliminate) the carrying amount of the Companys investment in each subsidiary and the Companys portion of equity of each subsidiary.
- Eliminate in full intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the Group (profits or losses resulting from intra-group transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in full).
- Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
- When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Groups accounting policies.
| Name of the Subsidiary | Date of Incorporatio n | Country of Incorporatio n | % of Ownership Interest | ||
| March 31, 2024 | March 31, 2023 | March 31, 2022 | |||
| Senores Pharmaceuticals INC | 28-01-2021 | USA | 100% | 100% | 100% |
| Havix Group INC* | 24-02-2015 | USA | 66.57% | 15.62% * * * | 15.62% * * * |
| 9488 Jackson Trail LLC** (Step down Subsidiary) | 24-02-2017 | USA | 66.57% ** | 15.62% ** | 15.62% ** |
| Ratnatris Pharmaceuticals Private Limited | 29-12-2005 | India | 69.00% | *** | *** |
Following Subsidiaries are consolidated in Restated Consolidated Financial Statements:
* Ownership Interest held in Havix Group INC as under:
As on 31st March, 2024: 49.91% held by Holding Company and 16.66% held by its wholly owned Subsidiary Company namely Senores Pharmaceuticals INC
As on 31st March, 2023 & 31st March, 2022 - 2.26% held by Holding Company and 13.36% held by its wholly owned Subsidiary Company namely Senores Pharmaceuticals INC
** % Ownership interest held indirectly in Step-down Subsidiary namely 9488 Jackson Trail LLC which is a wholly-owned subsidiary of Havix Group INC.
*** Subsidiaries namely Havix Group INC, 9488 Jackson Trail, LLC and Ratnatris Pharmaceuticals Private Limited were not subsidiaries as on 31st March, 2023 and 31st March, 2022 and hence, the financial have not been consolidated in the said years.
Subsidiaries:
Subsidiary is an entity over which the group has a control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiary is fully consolidated from the date on which control is transferred to the group. That is deconsolidated from the date that control ceases.
The Group combines the consolidated financial statements of the parent and its subsidiary line by line adding together like items of assets, liabilities, equity, income and expenses. Intercompany transactions, balances and Unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiary is consistent with the policies adopted by the Group.
(iv) Current and Non-Current Classification
The Group presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification. An asset is treated as Current when it is:-
- Expected to be realized or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:-
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(v) Operating Cycle
Based on the nature of products/activities of the Group and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Group has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
2.2 Functional and Presentation Currency
Indian rupee is the functional and presentation currency.
2.3 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest rupee in lakhs with two decimals as per the requirement of Schedule III, unless otherwise stated.
3. Material Accounting Policies
3.1 Revenue Recognition:
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Group is generally the principal as it typically controls the goods or services before transferring them to the customer.
3.1.1 Sale of Goods
Revenue is generated primarily from Selling of Pharmaceuticals and other related products. Revenue is recognized at the point in time when the performance obligation is satisfied and control of the goods is transferred to the customer in accordance with the terms of customer contracts. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Group has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue is adjusted for variable consideration such as discounts, rebates, refunds, credits, price concessions, incentives, or other similar items in a contract when they are highly probable to be provided.
In revenue arrangements with multiple performance obligations, the Group accounts for individual products and services separately if they are distinct - i.e. if a product or service is separately identifiable from other items in the arrangement and if a customer can benefit from it. The consideration is allocated between separate products and services in the arrangement based on their stand-alone selling prices. Revenue from sale of by products are included in revenue.
A contract liability is the obligation to transfer goods to the customer for which the Group has received consideration from the customer. Contract liabilities are recognized as revenue when the Group performs under the contract.
3.1.2 Sale of Services
Revenue is recognized from rendering of services when the performance obligation is satisfied and the services are rendered at point in time or over the period of time in accordance with the terms of customer contracts. In certain instances, income from Licensing arrangement arises from the Completion of certain milestones over certain period of time and recognized and when the performance obligation is satisfied. Revenue is measured based on the transaction price, which is the consideration, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
3.1.3 Profit Sharing Revenues
The Group from time to time enters into arrangements for the sale of its products in certain markets. Under such arrangements, the Group sells its products to the business partners at a base purchase price agreed upon in the arrangement and is also entitled to a profit share which is over and above the base purchase price. The profit share is typically dependent on the ultimate net sale proceeds or net profits, subject to any reductions or adjustments that are required by the terms of the arrangement. Revenue in an amount equal to the base purchase price is recognised in these transactions upon delivery of products to the business partners. An additional amount representing the profit share component is recognised as revenue only to the extent that it is highly probable that a significant reversal will not occur.
3.1.4 Out-licensing Agreements
Revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front payment on inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement. Non-refundable upfront license fees received in connection with product out-licensing agreements are deferred and recognised over the period in which the Company has continuing performance obligations. Milestone payments which are contingent on achieving certain clinical milestones are recognised as revenues either on achievement of such milestones, if the milestones are considered substantive, or over the period the Company has continuing performance obligations, if the milestones are not considered substantive. If milestone payments are
creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are anticipated to be received.
3.1.5 Sale Return
The Group accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a product sale. This allowance is based on the Groups est?mate of expected sales returns. With respect to established products, the Group considers its historical experience of sales returns, levels of inventory in the distribution channel, estimated shelf life, product discontinuances, price changes of competitive products, and the introduction of competitive new products, to the extent each of these factors impact the Groups business and markets. With respect to new products introduced by the Group, such products have historically been either extensions of an existing line of product where the Group has historical experience or in therapeutic categories where established products exist and are sold either by the Group or the Groups competitors.
3.1.6 Contract Assets
Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.
3.1.7 Contract Liability
A contract liability is the obligation to render services to the customer for which the Group has received consideration from the customer. Contract liabilities are recognized as revenue when the Group performs under the contract.
3.1.8 Export Incentive
Export incentives are accounted on accrual basis at the time of export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claim are fulfilled.
3.2 Other Income
3.2.1 Interest Income
Interest income is recognized using effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through expected life of the financial asset to the gross carrying amount of the financial asset. When calculating the effective interest rate, the group estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
3.2.2 Dividend income
Dividend are recognized in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably if any.
3.2.3 Gain or loss on derecognition of Financial Assets
Gain or Loss on derecognition of financial asset (if any) is determined as the difference between the sale price (net of selling costs) and carrying value of financial asset.
3.2.4 All other Operating / Non-operating Incomes are recognized and accounted for on accrual basis.
3.3 Property, Plant and Equipment
All other items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
The cost comprises the purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the group and the cost of the item can be measured reliably.
All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
For transition to Ind AS, the carrying value of Property Plant and Equipment under previous GAAP as on Transition date is regarded as its cost. The carrying value was original cost less accumulated depreciation and cumulative impairment.
Property, Plant and Equipment not ready for the intended use on the date of the Balance Sheet are disclosed as "Capital work-in-progress".
Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset at the time of disposal and are recognized in the statement of profit and loss when the asset is derecognized.
Depreciation on Tangible Assets is calculated on written down value basis (Except in case of Subsidiaries namely Havix Group INC and Ratnatris Pharmaceuticals Private limited where Depreciation if calculated on Straight line method) using the ratio arrived as per the useful life prescribed under Schedule II to the Companies Act, 2013.
| Block of Assets | Useful Life (Years) |
| Computers and Electronic Equipment | 3-5 |
| Furniture, Fixtures and Electric Installations | 10 |
| Laboratory Equipment | 10 |
| Office Equipment | 3-10 |
| Building | 30 |
| Plant & Equipment | 3-20 |
| Motor Vehicles | 8 |
In respect of Property, Plant and Equipment purchased during the year, depreciation is provided on a pro-rata basis from the date on which such asset is ready to use.
The residual value, useful live and method of depreciation of Property, Plant and Equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
3.4 Goodwill and Intangible Assets
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the Group and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortization and cumulative impairment. All directly attributable costs and other administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalized as a part of the cost of the intangible assets.
3.4.1 Research and Development
Expenditure on research activities is recognized in statement of profit and loss as incurred. Development expenditure is capitalized as part of the cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognized in statement of profit and loss as incurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortization and any accumulated impairment losses.
Amortisation on Intangible Asset is calculated as per Straight Line method (SLM) based on useful life of the asset as under;
| Block of Assets | Useful Life (Years) |
| Product Development | 2-20 |
| Computer Software | 6 |
3.4.2 Goodwill
The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash- generating units that are expected to benefit from the synergies of the combination. Any impairment loss for
goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
3.5 Financial Instruments
3.5.1 Initial recognition
The group recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
All financial assets and liabilities are recognized at fair value on initial recognition.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to or deducted from the fair value of financial assets or financial liabilities on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Regular way purchase and sale of financial assets are accounted for at trade date.
3.5.2 Subsequent Measurement
a. Non-derivative financial instruments
i. Financial assets measured at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
ii. Financial assets measured at fair value through other comprehensive income (FVOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
iii. Financial assets measured at fair value through profit or loss (FVTPL)
A Financial Asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified subsequent to their recognition, if the Group changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109 - Financial Instruments.
iv. Financial liabilities
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.
b. Equity instrumenta
An equity instrument is a contract that evidences residual interest in the assets of the group after deducting all of its liabilities. Incremental costs directly attributable to the issuance of equity instruments are recognized as a deduction from equity instrument net of any tax effects.
3.5.3 Effective Interest rate (EIR) method
The effective interest method is a method of calculating the amortized cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.
3.5.4 De-recognition
The group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized when obligation specified in the contract is discharged or cancelled or expires.
3.5.5 Off-setting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the group currently has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
3.6 Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefit by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 - inputs are quoted pnces (unadjusted) in active markets for identical assets or liabilities
Level 2 - inputs are other than quoted pnces included within level 1 that are observable for the asset or liability either directly (i.e. as pnces) or indirectly (i.e. derived pnces)
Level 3 - inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumption that are neither supported by pnces from observable current market transactions in the same instrument nor are they based on available market data.
3.7 Lease
As a lessee
The Group evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Group uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Group applies single recognition and measurement approach for all leases, except for short term leases and leases of low- value assets. At the date of commencement of the lease, the Group recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and leases of low value assets.
I. Right of Use Assets
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. In case of rent deposits carried at rate less than market rate, Initial direct costs of right of use assets includes the difference between present value of the Right of Use Assets and Nominal Amount of the deposit. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets:
Useful life of the asset is as follows;
| Block of Assets | Useful Life (Years) |
| Right to Use Assets for Leasehold Office | 5 / 9 (As per respective Contract) |
II. Lease Liabilities:
At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. In calculating the present value, the lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the Groups incremental borrowing rates.
III. Short Term Leases and Leases of Low-Value Assets
The Group determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Group is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. In assessing whether the Group is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Group to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Group revises the lease term if there is a change in the non-cancellable period of a lease. For these short-term and leases of low value assets, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
3.8 Income Tax
The income tax expense or credit for the period is the tax payable on the current periods taxable income based on the applicable income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
3.8.1 Current Tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, wherever appropriate, on the basis of amounts expected to be paid to the tax authorities.
Current tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognized in Other Comprehensive Income or directly in equity. In this case, the tax is also recognised in Other Comprehensive Income or directly in equity, respectively.
Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Current tax assets and current tax liabilities are offset, where group has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
3.8.2 Deferred Tax
Deferred tax is recognized in profit or loss, except when it relates to items that are recognized in other comprehensive income or directly in equity, in which case, the deferred tax is also recognized in other comprehensive income or directly in equity, respectively.
Deferred tax liabilities are recognized for all taxable temporary differences, except to the extent that the deferred tax liability arises from initial recognition of goodwill; or initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit or loss.
Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits to the extent that it is probable that taxable profit will be available against which those temporary differences, losses and tax credit can be utilized, except when deferred tax asset on deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rules and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset, where group has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
3.9 Impairment
3.9.1 Financial assets
The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost.
At each reporting date, the Group assesses whether financial assets carried at amortized cost is credit impaired. A financial asset is ‘credit -impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. The Group follows ‘simplified approach for recognition of impairment loss allowance on trade receivables. Under the simplified approach, the Group is not required to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime expected credit losses together with appropriate management estimates for credit loss at each reporting date, right from its initial recognition.
The Group uses a provision matrix to determine impairment loss allowance on the group of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
3.9.2 Non financial assets
The group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists the group estimates the assets recoverable amount.
An assets recoverable amount is the higher of an assets net selling pnce and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The impairment loss is recognized in the statement of profit and loss.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining net selling pnce, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
Goodwill is tested for impairment annually. Goodwill acquired in a business combination, for the purpose of impairment testing is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
3.10 Borrowing Costs
Borrowing cost includes interest and other costs that group has incurred in connection with the borrowing of funds.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
Investment income earned on temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
3.11 Employee Benefits
3.11.1 Short Term employee benefits
Short term employee benefits for salary and wages including accumulated leave that are expected to be settled wholly within 12 months after the end of the reporting period in which employees render the related service are recognized as an expense in the statement of profit and loss.
3.11.2 Post- employment benefits Gratuity
The Group provides for gratuity, a defined benefit plan ("the Gratuity Plan") covering the eligible employees of the Group. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of the employment with the Group.
Liability with regard to the Gratuity Plan are determined by actuarial valuation,performed by an independent actuary, at each balance sheet date using the projected unit credit method.
The Group recognizes the net obligation of a defined benefit plan as a liability in its balance sheet. Gains or losses through re-measurement of the net defined benefit liability are recognized in other comprehensive income and are not reclassified to profit and loss in the subsequent periods. Actuarial gains and losses arise due to difference in the actual experience and the assumed parameters and also due to changes in the assumptions used for valuation. The Group recognizes these remeasurements in the Other Comprehensive Income (OCI).
Provident Fund / Retirement Plan
Eligible employees of the Group receive benefits from provident fund, which is a defined contribution plan. Both the eligible employees and the Group make monthly contributions to the Government administered provident fund scheme equal to a specified percentage of the eligible employees salary. Amounts collected under the provident fund plan are deposited with in a government administered provident fund. The Group have no further obligation to the plan beyond its monthly contributions.
3.11.3 Compensated Absences
The Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using the projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognised is the period in which the absences occur.
3.12 Provisions
A provisi?n is recognized when the group has a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Warranties
A provision for warranties (if any) is recognized when the underlying products are sold. The provision is based on technical evaluation, historical warranty data and a weighting of all possible outcomes by their associated probabilities. A liability is recognized at the time the product is sold. The Group does not provide any extended warranties to its customers.
3.13 Contingent Liability
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The group does not recognize a contingent liability but discloses its existence in the financial statements.
3.14 Contingent Asset
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group. Contingent assets are neither recognized nor disclosed in the financial statements.
3.15 Foreign Currency
a. Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
b. Conversion
Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Non- monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the average exchange rate for the period.
c. Exchange difference
Exchange differences arising on settlement of such transactions and on translation of monetary items are recognized in the Consolidated Statement of Profit and Loss.
3.16 Cash and cash equivalent
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank (including demand deposits) and in hand and short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.17 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
3.18 Inventories
Items of inventory are valued at cost or net realizable value, whichever is lower. Cost for raw materials, traded goods and stores and spares is determined on First in First out (FIFO) basis. Cost includes all charges in bringing the goods to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.
3.19 Segment Reporting
An operating segment is component of the group that engages in the business activity from which the group earns revenues and incurs expenses, for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker, in deciding about resources to be allocated to the segment and assess its performance. The groups chief operating decisi?n maker is the Board of Directors.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un-allocable.
Revenue and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as un-allocable expenses.
The group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the group as a whole.
3.20 Cash Flow Statement
Cash flows are reported using indirect method whereby profit for the period is adjusted for the effects of the transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts and payments and items of income or expenses associated with investing and financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.
3.21 Events after reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
3.22 Business Combinations
The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in the Consolidated statement of profit and loss as incurred. The acquirees identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date.
Purchase consideration paid in excess of the fair value of net assets acquired is recognised as Goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognised as capital reserve.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate.
The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests proportionate share of the acquirees identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests share of subsequent changes in equity of subsidiaries.
Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity is recorded in shareholders equity.
4. Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions.
These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements are:
- Useful lives of Property, plant and equipment
- Valuation of financial instruments
- Provisions and contingencies
- Measurement and timing for Revenue Recognition
- Income tax and deferred tax
- Measurement of defined employee benefit obligations
4.1 Recent Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group.
KEY COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS
Set forth below are the key components of our statement of profit and loss from our continuing operations:
Total Income
Our total income comprises (i) revenue from operations; and (ii) other income.
Revenue from operations
Revenue from operations comprises (i) sale of products, which includes export sales and domestic sales; (ii) sale of services, which includes licensing fee, technology transfer fees, R&D initiatives, consultancy income and jobwork income; and (iii) other operating income, which includes export incentives, and other operating revenue which includes product permission, commissions and other ancillary revenues from sale of products and services.
Other income
Other income primarily comprises (i) interest income and (ii) other non-operating income including shared service income, fees for product registration dossiers, gain on foreign exchange fluctuations (net) and other miscellaneous income.
Expenses
Our expenses primarily comprise (i) cost of materials consumed, (ii) purchases of stock-in-trade, (iii) changes in inventories of finished goods, work-in-progress and stock-in-trade, (iv) employee benefit expenses, (v) finance costs, (vi) depreciation expenses, and (vii) other expenses.
Cost of materials consumed
Cost of materials consumed comprises of costs from of purchase of raw materials and packaging material, and primarily indicates the cost of materials used in the manufacturing activities of the Company.
Parchases of stock-in-trade
Purchases of traded goods comprises purchase of APIs, formulations and other related pharmaceutical products by us from third party manufacturers/suppliers and sold by us to our customers.
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Changes in inventories of finished goods, traded goods and work in progress denotes increase/decrease in inventories of finished goods, traded goods and work in progress between opening and closing dates of the reporting period.
Employee benefit expenses
Employee benefit expense primarily comprise (i) salaries, wages and bonus; (ii) contribution to provident and other funds; and
(iii) staff welfare expenses.
Finance costs
Finance cost primarily comprise (i) interest on borrowings; (ii) interest on lease liabilities; (iii) interest on others; (iv) other borrowing costs; and (iv) interest on income tax.
Depreciation expenses
Depreciation and amortisation expense primarily comprise (i) depreciation of property, plant and equipment; (ii) depreciation of right of use assets; and (iv) amortisation of intangible assets.
Other expenses
Other expenses primarily comprises of (i) stores and spares consumed; (ii) electricity, power and fuel; (iii) repairs and maintenance expense; (iv) repairs and maintenance - plant and machineries; (iv) freight and transport charges; (v) factory expenses; (vi) testing charges; (vii) labour charges; (viii) rent, rates and taxes; (ix) printing, stationary and communication; (x) product development expense; (xi) advertisement and sales promotion; (xii) insurance expense; (xiii) travelling, conveyance and vehicle; (xiv) legal and professional consultancy expense; (xv) product registration holding fees; (xvi) general office expense.
Tax expense
Tax expense consists of current tax expense and deferred tax expense.
RESULTS OF OPERATIONS
To complement our organic growth and internal expertise, we pursue strategic acquisitions of companies, that we believe will add to our capabilities and technical expertise and allow us to both deepen our presence in our existing markets and facilitate our entry into new markets.
Havix became our subsidiary with effect from May 3, 2023 and RPPL became our subsidiary with effect from December 14,
2023. Our wholly owned subsidiary RLSPL merged with Senores Pharmaceuticals Limited with the appointed date being January 1, 2024. For details of our acquisitions, see "History and Certain Corporate Matters- Details regarding material acquisitions or divestments of business/ undertakings, mergers, amalgamations, and revaluation of assets, if any in the last ten yearS" on page 229.
Our consolidated statement of profit and loss includes the financial data relating to our operations for Fiscal 2024, Fiscal 2023 and Fiscal 2022. Our consolidated operations also include operations undertaken by our three subsidiaries, SPI, Havix and RPPL.
The following tables set forth our selected financial data from our restated consolidated statement of profit and loss for Fiscal
2024, Fiscal 2023 and Fiscal 2022, the components of which are also expressed as a percentage of total income for such years. Since our Company acquired Havix with effect from May 3, 2023, the restated consolidated statement of profit and loss for Fiscal 2024 includes the impact of the acquisition of Havix. Further, since RPPL became our subsidiary with effect from December 14, 2023, the restated consolidated statement of profit and loss for Fiscal 2024 includes the impact of the acquisition of RPPL. Accordingly, the restated consolidated statement of profit and loss for Fiscal 2024 is not strictly comparable with the restated consolidated statement of profit and loss for Fiscal 2023 and Fiscal 2022.
| Particulars | For the year ended March 31 | |||||
| 2024 | 2023 | 2022 | ||||
| In t million | As a percentage of total income | In t million | As a percentage of total income | In t million | As a percentage of total income | |
| Revenue from operations | 2,145.24 | 98.70% | 353.37 | 90.56% | 141.70 | 96.85% |
| Other income | 28.18 | 1.30% | 36.84 | 9.44% | 4.61 | 3.15% |
| Total income | 2,173.42 | 100.00% | 390.21 | 100.00% | 146.31 | 100.00% |
| Cost of materials consumed | 319.55 | 14.70% | 3.45 | 0.88% | 0.01 | 0.01% |
| Purchases of stock-in-trade | 703.01 | 32.35% | 129.03 | 33.07% | 104.33 | 71.31% |
| Changes in inventories of finished goods, work-in- progress | 38.77 | 1.78% | (4.82) | 1.24% | (24.00) | 16.40% |
| Employee benefits expenses | 354.56 | 16.31% | 47.93 | 12.28% | 28.61 | 19.55% |
| Finance costs | 94.46 | 4.35% | 21.38 | 5.48% | 5.65 | 3.86% |
| Depreciation expenses | 100.18 | 4.61% | 17.79 | 4.56% | 7.05 | 4.82% |
| Other expenses | 313.45 | 14.42% | 51.08 | 13.09% | 13.23 | 9.04% |
| Total expenses | 1,923.98 | 88.52% | 265.84 | 68.13% | 134.88 | 92.19% |
| Profit before tax | 249.44 | 11.48% | 124.37 | 31.87% | 11.43 | 7.81% |
| Current tax | 80.00 | 3.68% | 14.26 | 3.65% | 1.73 | 1.18% |
| Deferred tax | (157.64) | 7.25% | 25.78 | 6.61% | (0.21) | 0.14% |
| Tax expense | (77.64) | 3.57% | 40.04 | 10.26% | 1.52 | 1.04% |
| Profit for the period | 327.08 | 15.05% | 84.33 | 21.61% | 9.91 | 6.78% |
The table below shows the breakdown of our Consolidated statement of profit and loss and includes indicators of financial performance of our Company and of our Subsidiaries for Fiscal 2024, Fiscal 2023 and Fiscal 2023 as set out in note 48B of the Restated Consolidated Financial Information on page 359.
| Particulars | Senores Pharmaceutic als Limited | Senores Pharmaceutic als Inc. | Havix Group Inc.* | Ratnatris Pharmaceutic als Private Limited** | Consolidation Adjustments | Total |
| Fiscal 2024 | ||||||
| Revenue from Operations | 340.06 | 491.65 | 1,064.15 | 473.47 | (224.09) | 2,145.24 |
| Earnings before Interest Tax Depreciation and Amortization (EBITDA) | 67.85 | 473.84 | 3.78 | 37.17 | (138.56) | 444.08 |
| EBITDA (%) | 19.95% | 96.38% | 0.36% | 7.85% | Not applicable | 20.70% |
| Profit after Tax (PAT) | 8.15 | 296.94 | 100.20 | (1.66) | (76.55) | 327.08 |
| PAT (%) | 2.40% | 60.40% | 9.42% | (0.35%) | Not applicable | 15.25% |
| Fiscal 2023 | ||||||
| Revenue from Operations | 123.82 | 264.94 | - | - | (35.40) | 353.36 |
| Earnings before Interest Tax Depreciation and Amortization (EBITDA) | 50.12 | 155.60 | (42.18) | 163.54 | ||
| EBITDA (%) | 40.48% | 58.73% | - | - | Not applicable | 46.28% |
| Profit after Tax (PAT) | 11.99 | 84.62 | - | - | (12.28) | 84.33 |
| PAT (%) | 9.68% | 31.94% | - | - | Not applicable | 23.87% |
| Fiscal 2022 | ||||||
| Revenue from Operations | 135.46 | 8.87 | - | - | (2.63) | 141.70 |
| Earnings before Interest Tax Depreciation and Amortization (EBITDA) | 20.96 | 7.88 | (4.71) | 24.13 | ||
| EBITDA (%) | 15.47% | 88.83% | - |
- |
NA | 17.03% |
| Profit after Tax (PAT) | 6.82 | 3.16 | - |
- |
(0.07) | 9.91 |
| PAT(%) | 5.03% | 35.57% | - | - | NA | 6.99% |
Notes: 1) *Figures consideredfrom date of acquisition i.e., May 3, 2023. 2) **Figures considered from date of acquisition i.e., December 14, 2023.
FISCAL 2024 COMPARED TO FISCAL 2023 Total Income
Total income increased by 456.99% from t 390.21 million in Fiscal 2023 to t 2,173.42 million in Fiscal 2024 primarily due to an increase in revenue from operations of our company and operations of our subsidiary companies.
Revenue from operations
Revenue from operations increased by 507.08% from t 353.37 million in Fiscal 2023 to t 2,145.24 million in Fiscal 2024 primarily due to an increase in the sale of products from t 318.92 million in Fiscal 2023 to t 1,883.94 million in Fiscal 202 4, an increase in the sale of services from t 34.34 million in Fiscal 2023 to t 223.93 million in Fiscal 2024 and an increase in other operating income from t 0.11 million in Fiscal 2023 to t 37.37 million in Fiscal 2024. Further, the increase in revenue in operations was due to:
• Growth in our Regulated Markets business which increased by 447.87% from t264.94 million in Fiscal 2023 to t1,451.52 million in Fiscal 2024. This was due to:
? Acquisition of Havix, with effect from May 3, 2023 which accounted for t1,064.15 million in Fiscal 2024; and
¦ Growth in our Regulated Markets Business housed under SPI that increased by 85.57% from t 264.94 million in Fiscal 2023 to t491.65 million in Fiscal 2024.
• Entry into Emerging Markets Business via acquisition of RPPL, with effect from December 14, 2023 that accounted for t 473.47 million in Fiscal 2024.
• Growth in our API business which increased by 602.48% from t19.78 million in Fiscal 2023 to t138.95 million in Fiscal 2024, which was strengthened by the acquisition of running business of Mascot Industries by RLSPL with effect from April 1, 2023. RLSPL merged with Senores Pharmaceuticals Limited with the appointed date being January 1, 2024. •
• Growth in our Critical Care Injectables Business which increased by 234.96% from t17.05 million in Fiscal 2023 to t57.11 million in Fiscal 2024.
Other income
Other income decreased by 23.51% from t36.84 million in Fiscal 2023 to t28.18 million in Fiscal 2024 primarily due to a decrease in gain on foreign exchange fluctuation (net) from t34.21 million in Fiscal 2023 to t10.71 million in Fiscal 2024 and decrease in shared service income from t2.24 million in Fiscal 2023 to t0.34 million in Fiscal 2024. This was partially offset by an increase in interest income from t0.39 million in Fiscal 2023 to t4.59 million in Fiscal 2024 and an increase in fees for product registration dossier from nil in Fiscal 2023 to t11.34 million in Fiscal 2024 and other miscellaneous income from nil in Fiscal 2023 to t 1.20 million in Fiscal 2024.
Expenses
Total expenses increased by 623.74% from t265.84 million in Fiscal 2023 to t1,923.98 million in Fiscal 2024 primarily due to an increase in the scale of operations of our existing businesses and acquisition of Havix and RPPL which led to a corresponding increase in the following expenses:
Cost of materials consumed
Cost of materials consumed increased by 9,168.22% from t3.45 million in Fiscal 2023 to t319.55 million in Fiscal 2024 primarily due to increase in revenue from operations resulting in increased raw material consumption cost as well as raw materials acquired during acquisition of Havix and RPPL.
Purchases of stock-in-trade
Purchase of stock-in-trade increased by 444.84% from t 129.03 million in Fiscal 2023 to t 703.01 million in Fiscal 2024 primarily due to an increase in the purchase of traded goods such as API, formulations and other related products and an increased level of finished products on account of stock included pursuant to acquisitions.
Changes in inventories offinished goods, work-in-progress and stock-in-trade
Changes in inventories of finished goods, work-in-progress and stock-in-trade was Rs. 38.77 million in Fiscal 2024 as compared to Rs. (4.82) million in Fiscal 2023. This was primarily due to increase in work-in-progress inventory from nil in Fiscal 2023 to Rs. 51.99 million in Fiscal 2024 as well as stock included pursuant to acquisitions of Rs. 112.59 million in Fiscal 2024.
Employee benefit expenses
Employee benefit expenses increased by 639.75% from Rs.47.93 million in Fiscal 2023 to Rs.354.56 million in Fiscal 2024 primarily due to a 659.04% increase in salaries, wages and bonus from Rs.44.17 million in Fiscal 2023 to Rs.335.27 million in Fiscal 2024 which was attributable to an increase in the number of employees employed by us, annual increments given to employees in Fiscal 2024 and inclusion of employee expenses of our US subsidiaries on consolidation in Fiscal 2024, where the employee expenses are relatively higher.
Finance costs
Finance costs increased by 341.81% from Rs.21.38 million in Fiscal 2023 to Rs.94.46 million in Fiscal 2024 primarily due to increase in interest on borrowings from Rs.16.01 million in Fiscal 2023 to Rs.81.29 million in Fiscal 2024, mainly attributable to inclusion of finance costs of our acquired subsidiaries and also due to increased level of borrowings in our respective subsidiaries.
Depreciation expenses
Depreciation expenses increased by 463.13% from Rs. 17.79 million in Fiscal 2023 to Rs. 100.18 million in Fiscal 2024 primarily due to an addition in property, plant and equipment of Rs. 1,530.57 million, primarily owing to property, plant and equipment acquired pursuant to acquisitions.
Other expenses
Other expenses accounted for 14.42% and 13.09% of our total income respectively for Fiscal 2024 and Fiscal 2023 and increased by 513.65% from Rs.51.08 million in Fiscal 2023 to Rs.313.45 million in Fiscal 2024 primarily due to the inclusion of other expenses of our acquired subsidiarles in Fiscal 2024.
This increase was mainly on account of increase in (i) stores and spares consumed from nil in Fiscal 2023 to Rs.24.99 million in Fiscal 2024; (ii) electricity, power and fuel from nil in Fiscal 2023 to Rs.29.34 million in Fiscal 2024; (iii) repairs and maintenance expense from Rs.0.30 million in Fiscal 2023 to Rs.27.21 million in Fiscal 2024; (iv) freight and transport charges from Rs. 0.33 million in Fiscal 2023 to Rs. 33.36 million in Fiscal 2024; (v) factory expenses from nil in Fiscal 2023 to Rs.25.28 million in Fiscal 2024; (vi) labour charges from nil in Fiscal 2023 to Rs.26.92 million in Fiscal 2024; (vii) insurance expense from Rs.0.28 millio n in Fiscal 2023 to ^31.11 million in Fiscal 2024; (viii) legal and professional consultancy expense from Rs.8.63 million in Fisc al 2023 to Rs.39.90 million in Fiscal 2024; (ix) general office expense from Rs.0.24 million in Fiscal 2023 to Rs.27.72 million in Fiscal 2024. This was partially offset by a decrease in product registration holding fees from Rs.27.49 million in Fiscal 2023 to Rs.13.64 in Fiscal 2024.
Tax Expense
We received a net tax credit of Rs. 77.64 million in Fiscal 2024 compared to total tax (current and deferred) expense of Rs. 40.0 4 million in Fiscal 2023. This was primarily due to:
• Increase in current tax expense by from Rs.14.26 million in Fiscal 2023 to Rs.80.00 million in Fiscal 2024 primarily due to an increase in the total income.
• Deferred tax decreased from Rs.25.78 million in Fiscal 2023 to Rs. (157.64) million in Fiscal 2024 primarily due to provision for deferred tax assets on the losses of our subsidiaries made in the Restated Consolidated Financial Information.
Profit for the period
As a result of the foregoing factors, our profit for the period increased by 287.84% from Rs. 84.33 million in Fiscal 2023 to Rs. 327.08 million in Fiscal 2024.
FISCAL 2023 COMPARED TO FISCAL 2022
Total Income
Total income increased by 166.70% from Rs.146.31 million in Fiscal 2022 to Rs.390.21 million in Fiscal 2023 primarily due to an increase in revenue from operations of our Company and increase in other income.
Revenue from operations
Revenues from operations increased by 149.38% from Rs.141.70 million in Fiscal 2022 to Rs.353.37 million in Fiscal 2023 primarily due to increase in sale of produc?s from Rs. 84.48 million in Fiscal 2022 to Rs. 318.92 million in Fiscal 2023 primarily due to increase in export of product sales from Rs.27.17 million in Fiscal 2022 to Rs. 263.94 million in Fiscal 2023.
Other income
Other income increased by 699.13% from Rs.4.61 million in Fiscal 2022 to Rs.36.84 million in Fiscal 2023. This was primarily due to an increase in gain on foreign exchange fluctuation (net) from Rs.2.68 million in Fiscal 2022 to Rs.34.21 million in Fisca l 2023.
Expenses
Total expenses increased by 97.10% from Rs.134.88 million in Fiscal 2022 to Rs.265.84 million in Fiscal 2023. This was primarily due to an increase in scale of operations of our existing business and of our subsidiary company Senores Pharmaceuticals Inc. which led to a corresponding increase in the following expenses:
Cost of materials consumed
Cost of raw materials consumed increased from Rs. 0.01 million in Fiscal 2022 to Rs. 3.45 million in Fiscal 2023 in line with growth in sales of products.
Purchases of stock-in-trade
Purchase of traded goods increased by 23.67% from Rs. 104.33 million in Fiscal 2022 to Rs. 129.03 million in Fiscal 2023 due to an increase in purchase of traded goods such API, formulations and other related products in line with increase in scale of operations.
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Inventories of finished goods, work-in-progress and stock-in-trade increased by Rs. 4.82 million in Fiscal 2023 as compared to a corresponding increase of Rs. 24.00 million in Fiscal 2022 primarily due to increase in the inventory holding of Traded goods.
Employee benefit expenses
Employee benefit expenses increased by 67.53% from Rs. 28.61 million in Fiscal 2022 to Rs. 47.93 million in Fiscal 2023 primarily due to an increase in salaries, wages and bonus from Rs. 26.97 million in Fiscal 2022 to Rs. 44.17 million in Fiscal 2023, attrib utable to the new employees recruited by our Company to support the operations and annual increments given to employees in Fiscal 2023.
Finance costs
Finance costs increased by 278.41% from Rs. 5.65 million in Fiscal 2022 to Rs. 21.38 million in Fiscal 2023, which was primarily due to an increase in interest on borrowings from Rs. 4.47 million in Fiscal 2022 to Rs. 16.01 million in Fiscal 2023.
Depreciation expenses
Depreciation expenses increased by 152.34% from Rs. 7.05 million in Fiscal 2022 to Rs. 17.79 million in Fiscal 2023 primarily due to an addition in intangible assets of Rs. 203.22 million in Fiscal 2023.
Other expenses
Other expenses increased by 286.09% from Rs. 13.23 million in Fiscal 2022 to Rs. 51.08 million in Fiscal 2023. This was primarily due to an increase in (i) product registration holding fees from nil in Fiscal 2022 to Rs. 27.49 million in Fiscal 2023; (ii) advertisement and sales promotion from Rs. 0.31 million in Fiscal 2022 to Rs. 3.82 million in Fiscal 2023; (iii) printing, statio nary and communication expenses from Rs. 0.16 million in Fiscal 2022 to Rs. 2.54 million in Fiscal 2023; (iv) travelling, conveyance and vehicle expense from Rs. 2.98 million in Fiscal 2022 to Rs. 4.53 million in Fiscal 2023; (v) donations and contributions from nil in Fiscal 2022 to Rs. 0.80 million in Fiscal 2023; and (vi) provision for expected credit loss method (ECL) from nil in Fiscal 2022 to Rs. 1.61 million in Fiscal 2023.
Tax Expense
Total tax expense (current and deferred) increased by 2534.21% from Rs. 1.52 million in Fiscal 2022 to Rs. 40.04 million in Fiscal 2023 primarily due to increase in total income. This was primarily due to:
• Current tax expense increased by 724.28% from Rs. 1.73 million in Fiscal 2022 to Rs. 14.26 million in Fiscal 2023 primarily due to an increase in the total income.
• Deferred tax increased by 12,376.19% from Rs. (0.21) million in Fiscal 2022 to Rs. 25.78 million in Fiscal 2023 primarily due to an increase in provision for deferred tax liabilities on account of timing difference.
Profit for the period
As a result of the foregoing factors, our profit for the year increased by 750.76% from Rs. 9.91 million in Fiscal 2022 to Rs. 84.33 million in Fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES
Capital Requirements
For Fiscal 2024, Fiscal 2023 and Fiscal 2022, we met our funding requirements, including satisfaction of debt obligations, capital expenditure, investments, other working capital requirements and other cash outlays, principally with issue of share capital and from external borrowings.
Liquidity
Our liquidity requirements arise principally from our operating activities, investing activities, repayment of borrowings and debt service obligations. Historically, our principal sources of funding have included short-term and long-term borrowings from financial institutions, cash and cash equivalents and additional Equity capital infusion.
Cash Flows
The following table sets forth certain information relating to our cash flows in the Fiscal 2024, 2023 and 2022:
| Particulars | For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 |
(in Rs. million) |
|||
| Net cash from operating activities | (198.71) | (10.79) | (104.47) |
| Net cash from investing activities | (546.57) | (482.87) | (244.40) |
| Net cash flows from financing activities | 869.81 | 462.51 | 364.62 |
| Net increase/ (decrease) in cash and bank balance | 124.53 | (31.15) | 15.75 |
| Cash and cash equivalents at the end of the year end | 130.55 | 1.00 | 32.15 |
Cash Flows used in Operating Activities
Fiscal 2024
Net Cash used in operating activities was Rs. 198.71 million during Fiscal 2024. Profit before tax for Fiscal 2024 was Rs. 249.44 million.
Operating profit before working capital changes was Rs. 428.00 million. Adjustments to reconcile profit before tax to operating profit before working capital changes primarily consisted of depreciation of Rs. 100.18 million, interest expenses of Rs. 85.00 million. This was partially offset by effect of foreign exchange fluctuations of Rs. 2.50 million and interest income of interest income of Rs. 4.59 million.
Our adjustments for working capital changes for Fiscal 2024 primarily included increase in trade receivables of Rs. 571.09 million, an increase in trade payables of Rs. 508.95 million, an increase in provisions and tax liabilities of Rs. 61.94 million and an increase in other financial assets of Rs. 687.38 million, decrease in other current assets of Rs. 147.53 million, and a decrease in other financial liabilities of Rs. 15.79 million.
Cash used in operating activities in Fiscal 2024 amounted to Rs. 118.65 million and direct taxes paid (net) amounted to Rs. 80.06 million.
Fiscal 2023
Net Cash used in operating activities was Rs. 10.79 million during Fiscal 2023. Profit before tax for Fiscal 2023 was Rs. 124.37 million.
Operating profit before working capital changes was Rs. 149.84 million. Adjustments to reconcile profit before tax to operating profit before working capital changes primarily consisted of interest expenses of Rs. 18.37 million and depreciation of Rs. 17.79 million which was partially offset by effect of foreign exchange fluctuations of Rs. 10.15 million.
Our adjustments for working capital changes for Fiscal 2023 primarily included an increase in other current assets of Rs. 79.67 million, an increase in other financial liabilities of Rs. 41.93 million, an increase in other financial assets of Rs. 170.90 million, and an increase in provisions and tax liabilities of Rs. 17.41 million, decrease in loans of Rs. 9.38 million, and a increase in trade receivables of Rs. 24.74 million.
Cash generated from operations in Fiscal 2023 amounted to Rs. 3.74 million and direct taxes paid amounted to Rs. 14.53 million. Fiscal 2022
Net Cash used in operating activities was Rs. 104.47 million during Fiscal 2022. Profit before tax for Fiscal 2022 was Rs. 11.43 million.
Operating profit before working capital changes was Rs. 22.28 million. Adjustments to reconcile profit before tax to operating profit before working capital changes primarily consisted of depreciation of Rs. 7.05 million, interest expenses of Rs. 5.10 million which was partially offset by interest income of Rs. 1.93 million.
Our adjustments for working capital changes for Fiscal 2022 primarily included increase in trade receivables of Rs. 194.00 million, increase in trade payables of Rs. 70.07 million and increase in inventories of Rs. 26.44 million, a decrease in loans of Rs. 41.90 million and decrease in other current liabilities of Rs. 12.48 million.
Cash used in operating activities in Fiscal 2022 amounted to Rs. 103.06 million and direct taxes paid (net) amounted to Rs. 1.41 million.
Cash Flow used in Investing Activities
Fiscal 2024
Net cash used in investing activities was Rs. 546.57 million in Fiscal 2024, primarily due to payments for purchase of property, plant and equipment of Rs. 518.25 million and investment in subsidiaries of Rs. 32.91 million. This was partially offset by interest received on our investments of Rs. 4.59 million.
Fiscal 2023
Net cash used in investing activities was Rs. 482.87 million in Fiscal 2023, primarily due to payments for purchase of property, plant and equipment of Rs. 472.77 million, and investment in other entities of Rs. 10.49 million. This was partially offset by interest received on our investments of Rs. 0.39 million.
Fiscal 2022
Net cash used in investing activities was Rs. 244.40 million in Fiscal 2022, primarily due to payments for purchase of property, plant and equipment of Rs. 106.82 million and investment in other entities of Rs. 139.52 million. This was partially offset by interest received on our investments of Rs. 1.93 million.
Cash Flow from/ (used in) Financing Activities
Fiscal 2024
Net cash from financing activities was Rs. 869.81 million in Fiscal 2024, primarily on account of proceeds from issue of equity share capital of Rs. 58.72 million, proceeds from premium on issue of equity share capital of Rs. 311.21 million and proceeds from short-term borrowings of Rs. 580.43 million. This was partially offset by interest paid Rs. 85.00 million and payment towards acquisition of non-controlling interest in our subsidiaries of Rs. 13.55 million.
Fiscal 2023
Net cash from financing activities was Rs. 462.51 million in Fiscal 2023, primarily on account of proceeds from issue of equity share capital of Rs. 10.73 million, proceeds from premium on issue of equity share capital of Rs. 16.09 million and proceeds from long term borrowings of Rs. 175.15 million, and proceeds from short-term borrowings of Rs. 290.40 million. This was partially
offset by payment towards acquisition of non-controlling interest in our subsidiarles of Rs. 11.80 million and interest paid of Rs. 18.37 million.
Fiscal 2022
Net cash from financing activities was Rs. 364.62 million in Fiscal 2022, primarily on account of issue of equity share capital of Rs. 49.42 million, proceeds from premium on issue of equity share capital of Rs. 190.79 million, proceeds from subscription to the equity by non-controlling interest in subsidiaries of Rs. 25.40 million and proceeds from long term borrowings of Rs. 89.93 million, and proceeds from the short-term borrowings of Rs. 15.06 million. This was partially offset by interest paid of Rs. 5.10 million and decrease in lease liabilities of Rs. 0.87 million.
FINANCIAL INDEBTEDNESS
As of March 31, 2024, we had total borrowings of Rs. 2,483.84 million. Our total borrowing to equity ratio was 1.07 times as of March 31, 2024. For further information on our indebtedness, see "FinancialIndebtedness" on page 370.
CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2024, March 31, 2023 and March 31, 2022 our contingent liabilities as per Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets, that have not been provided for, were as follows:
(in f million)
| Particulars | For the Year ended March 31, 2024 |
| (i) Contingent liabilities: | |
| Outstanding Standby Letter of Credit | 191.72 |
| Disputed Income Tax Demand | 205.13 |
| Outstanding Bank Guarantees | 2.46 |
| (ii) Commitments | |
| Estimated amount of contracts remaining to be executed on capital account and not provided for | 17.79 |
| Total | 417.10 |
For further information on our contingent liabilities as at March 31, 2024, March 31, 2023, March 31, 2022 as per Ind AS 37,
see "Financial Information on page 267.
Except as disclosed elsewhere in this Draft Red Herring Prospectus, there are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we believe are material to investors.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth certain information relating to future payments due under known contractual commitments as of March 31, 2024, March 31, 2023 and March 31, 2022 aggregated by type of contractual obligation:
(in f million)
| Particulars | Carrying Amount | <less than 1 year | 1 to 3 years | >3 years |
| As at March 31, 2024 | ||||
| Borrowings | 2,483.84 | 1,147.28 | 1142.28 | 194.28 |
| Lease Liabilities | 92.59 | 14.81 | 56.50 | 10.64 |
| Trade Payables | 1130.11 | 1130.11 | - |
- |
| Other Financial Liabilities | 46.02 | 46.02 | - | - |
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions include shares issued, loan taken, repayment of loans, sale of goods (excluding taxes), sale of services (excluding taxes), advances given, purchase of goods, corporate guarantee commission income, consultancy fees, debenture issued, and remuneration (including bonus) paid to directors & key managerial. The table below provides details of our related party transactions in the years indicated:
| Particulars | For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 |
| Related Party - Asset transactions | 3.50 | 9.38 | 182.73 |
| as a % of Total Assets | 0.06% | 0.72% | 30.89% |
| Particulars | For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 |
| Related Party - borrowings availed/(Repaid) (Net) | -21.62 | 78.25 | 8.65 |
| as a % of Total borrowings | -0.87% | 12.88% | 6.09% |
| Related Party - Revenue Transactions | 63.86 | 62.48 | 29.97 |
| as a % of Total Income | 2.94% | 16.01% | 20.48% |
| Related Party - Expense transactions | 89.09 | 81.91 | 19.04 |
| as a % of Total Expenses | 4.63% | 30.81% | 14.12% |
| Related Party - Issue of Equity | 963.28 | - |
112.88 |
| as a % of Total Equity | 41.57% | 0.00% | 30.85% |
* All the transactions are based on Consolidated related party transactions and transactions which are eliminated in the Restated Consolidated Financial Information have not been considered.
AUDITORS OBSERVATIONS
There are no qualifications, reservations, and adverse remarks by our Statutory Auditors in our Restated Consolidated Financial Information.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks that are related to the normal course of our operations such as interest rate, liquidity risk, foreign exchange risk and reputational risk, which may affect economic growth in India and the value of our financial liabilities, our cash flows and our results of operations.
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness. Credit risk arises primarily from financial assets such as trade receivables, cash and cash equivalent and other financial assets. In respect of trade receivables, credit risk is being managed by the Group through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Group grants credit terms in the normal course of business. The Group ensures that sales of products are made to customers with appropriate creditworthiness. All trade receivables are also reviewed and assessed for default on a regular basis. Credit risk arising from cash and cash equivalent and other financial assets is limited due to sound receivable management of the Group.
Liquidity Risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets. The Groups principal source of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Group closely monitors its liquidity position and is attempting to enhance its sources of funding by increasing cash flow generated from its operations and realisations from other proposed measures. The Group measures risk by forecasting cash flows.
Market Risk
We are exposed to various types of market risks during the normal course of business. Market risk is the risk that fair value of future cash flows of a financial instrument will fluctuate because of changes in market pnces. Market risk comprises of currency rate risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Interest risk arises to the Group mainly from borrowings with variable rates. The Group measures risk through sensitivity analysis. The banks are now finance at variable rate only, which is the inherent business risk. Interest rates are highly sensitive to many factors beyond our control, including the monetary policies of the RBI, domestic and international economic and political conditions, inflation and other factors.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group is exposed to foreign exchange risk through its sales and purchases from overseas suppliers in foreign currencies. The Group measures risk through sensitivity analysis.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTION S
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in "Managements Discussion and Analysis of Financial Condition and Results of Operations - Significant Factors Affecting our Results of Operations" and the uncertainties described in "Risk Factors1" on pages 374 and 35, respectively. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 35, 188 and 372 respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as set out in this Draft Red Herring Prospectus in the sections "Our Business" on page 188, we have not announced and do not expect to announce in the near future any new products or business segments.
COMPETITIVE CONDITIONS
We operate in a competitive environment and expect to continue to compete with existing and potential competitors. See "Risk Factors", "Industry Overview" and "Our Business" on pages 35, 149 and 188, respectively, for further details on competitive conditions that we face across our various business segments.
SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS AND SUPPLIERS
We depend on a limited number of suppliers and customers for our revenue and operations. See "Risk Factors- We rely on limited suppliers for our raw material, loss of these suppliers may have an adverse effect on our business, results of operations and financial conditions. Further, Havix, our subsidiary in the United States depends solely on one supplier for each API in an ANDA product, loss of any one of these suppliers may have an adverse effect on our business, results of operations andfinancial conditions" on page 47 and "Risk Factors- We derive a significant part of our revenue from some customers. If one or more of such customers choose not to source their requirements from us or to terminate our contracts or purchase orders, our business, cash flows, financial condition and results of operations may be adversely affected" on page 38.
SEASONALITY/ CYCLICALITY OF BUSINESS
Our business is not seasonal in nature.
MATERIAL DEVELOPMENTS AFTER MARCH 31, 2024 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed below and elsewhere in this Draft Red Herring Prospectus, there have been no significant developments after March 31, 2024, the date of the last financial statements contained in this Draft Red Herring Prospectus, to the date of filing of this Draft Red Herring Prospectus, which materially and adversely affects, or is likely to affect, our trading or profitability, or the value of our assets, or our ability to pay our liabilities within the next 12 months:
(i) Subsequent to the audited accounts for the year ending on March 31, 2024, the Company has issued 16,95,000 Equity Shares with face value Rs. 10 per share on conversion of 0% unsecured fully compulsorily convertible debentures - Series III of total amount Rs. 30,51,00,000/- having face value of Rs. 10/- and premium value of Rs. 170/- as on April 09, 2024.
(ii) Subsequent to the audited accounts for the year ending on March 31, 2024 the Company has issued 10,66,250 equity shares with face value Rs. 10 per share on conversion of 0% unsecured fully compulsorily convertible debentures - Series IV of total amount Rs. 34,12,00,000/- having face value of Rs. 10/- and premium value of Rs. 310/- as on June 17, 2024.
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