The following is summary of material accounting policies
relating to revenue recognition. Further, refer note no. 24 for
disaggregate revenues from contracts with customers
Sale of products
The Company recognizes revenue for supply of goods
to customers against orders received. The majority of
contracts that company enters into relate to sales orders
containing single performance obligations for the
delivery of pharmaceutical products as per Ind AS 115.
Product revenue is recognized when control of the goods
is passed to the customer. The point at which control
passes is determined based on the terms and conditions
by each customer arrangement. Revenue is not recognized
until it is highly probable that a significant reversal in the
amount of cumulative revenue recognized will not occur.
Amount representing the profit share component is
recognized as revenue only to the extent that it is highly
probable that a significant reversal will not occur.
The Company also recognizes revenue where goods are
ready as per customer request and pending dispatch at the
instance of the customer. In such cases, the products are
separately identified as belonging to the customer and the
Company does not hold the right to redirect the product
to another customer. On satisfaction of all performance
obligations, invoice is raised on the customer in accordance
with customer request at regular payment terms.
Sale of services
Revenue from services rendered, which primarily relate
to contract research, is recognized in the statement of
profit and loss as the underlying services are performed.
Upfront non-refundable payments received under these
arrangements are deferred and recognized as revenue over
the expected period over which the related services are
expected to be performed.
Contract Liabilities
A contract liability is the obligation to transfer goods or
services to a customer for which the Company has received
consideration (or the amount is due) from the customer. If a
customer pays consideration before the Company transfers
goods or services to the customer, a contract liability is
recognized when the payment is made, or the payment is
due (whichever is earlier). Contract liabilities are recognized
as revenue when the Company performs under the contract.
Interest income
For all debt financial instruments measured either at
amortized cost or at fair value through other comprehensive
income, interest income is recorded using the effective
interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over
the expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying amount
of the financial asset or to the amortized cost of a financial
liability. Interest income is included in finance income in the
Statement of Profit and Loss.
Dividends
Revenue is recognized when the Company's right to
receive the payment is established, which is generally when
shareholders approve the dividend.
2.15 Income Tax
Current Tax
Current income tax is recognized based on the estimated
tax liability computed after taking credit for allowances and
exemptions in accordance with the Income Tax Act, 1961.
Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted,
at the reporting date.
Deferred Tax
Deferred tax is determined by applying the Balance
Sheet approach. Deferred tax is recognized on temporary
differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable
temporary differences.Deffered tax assets are generally
recognized for all deductible temporary differences to the
extent that it is probable that taxable profits will be available
against which those deductible temporary differences can
be utilized. Such deferred tax assets and liabilities are not
recognized if the temporary difference arises from the initial
recognition (other than in a business combination) of assets
and liabilities in a transaction that effects neither the taxable
profit nor the accounting profit.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize the asset
and settle the liability simultaneously.
Minimum Alternative Tax ("MAT") credit is recognized as
an asset only when and to the extent there is convincing
evidence that the company will pay normal income tax
during the specified period. Such asset is reviewed at each
Balance Sheet date and the carrying amount of MAT credit
asset is written down to the extent there is no longer a
convincing evidence to the effect that the company will pay
normal income tax during the specified period.
2.16 Earnings Per Share
The Company presents basic and diluted earnings per share
("EPS") data for its ordinary shares. Basic earnings per share
are computed by dividing the net profit after tax by the
weighted average number of equity shares outstanding
during the period. Diluted earnings per share is computed by
dividing the profit after tax by the weighted average number
of equity shares considered for deriving basic earnings per
share and also the weighted average number of equity
shares that could have been issued upon conversion of all
dilutive potential equity shares.
2.17 Inventories
Inventories are valued at the lower of cost or net realizable
value. Cost includes purchase price, duties, transport,
handing costs and other costs directly attributable to the
acquisition and bringing the inventories to their present
location and condition.
The basis of determination of cost is as follows:
Raw materials, packing materials, stores , spares and
consumables : cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location
and condition.
Finished goods and work -in- progress: Cost includes direct
materials , labour and a proportion of manufacturing
overheads based on the normal operating capacity, but
excludes borrowings costs.
Stock- in- trade: Cost includes cost of purchases and other
costs incurred in bringing the inventories to their present
location and condition.
Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make
the sale. The net realizable value of work -in-progress is
determined with reference to the selling prices of related
finished products.
2.18 Trade Receivables
A receivable is recognized if an amount of consideration
that is unconditional (i,e. only the passage of time is
required before payment of they consideration is due.)
The Management has established a credit policy under
which each new customer is analyzed individually for credit
worthiness before the company's standard payment terms
offered up to 90 days.
In respect of trade receivables, the Company applies the
simplified approach of Ind AS 109 'Financial Instruments',
which requires measurement of loss allowance at an amount
equal to lifetime expected credit losses. Lifetime expected
credit losses are the expected credit losses that result from
all possible default events over the expected life of a financial
instrument.
2.19 Trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial
year which are unpaid. The amounts are unsecured and are
presented as current liabilities unless payment is not due
within twelve months after the reporting period. They are
recognized initially at fair value and subsequently measured
at amortized cost using the effective interest method.
2.20 Fair value of investments:
The Company has invested in the equity instruments of
various companies. However ,the percentage of shareholding
of the company in such investee companies is very low and
hence, it has not been provided with future projections
including projected profit and loss account by those investee
companies . hence, the valuation exercise carried out by the
company with the help of available historical annual reports
and other information in the public domain.
2.21 Investments in subsidiaries
In respect of equity investments, the entity prepares separate
financial statements and account for its investments in
subsidiaries at cost, net of impairment if any.
2.22 Research and Development
Revenue expenditure on research and development is
charged to revenue in the period in which it is incurred.
Capital expenditure on research and development is added
to property, plant and equipment and depreciated on the
basis of useful lives as prescribed under Schedule II to the
Companies Act, 2013.
2.23 Measurement of EBITDA
The Company presents EBITDA in the statement of profit or
loss, which is neither specifically required by Ind AS 1 nor
defined under Ind AS. Ind AS complaint Schedule III allows
companies to present line items, sub-line items and sub
totals shall be presented as an addition or substitution on
the face of the financial statements when such presentation
is relevant to an understanding of the company's financial
position or performance or to cater to industry/sector
specific disclosure requirements or when required for
compliance with the amendments to the Companies Act or
under the Indian Accounting Standards.
2.24 New standards and interpretations not yet adopted
Ministry of Corporate Affairs ("MCA") notifies new standard
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time
to time. For the year ended March 31, 2025, MCA has not
notified any new standards or amendments to the existing
standards applicable to the Company.
2.25 Segment accounting and reporting
The chief operational decision maker monitors the operating
results of its business segments separately for the purpose of
making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on
profit and loss and is measured consistently with profit and
loss in the standalone financial statements.
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker (CODM).
The accounting policies adopted for segment reporting are
in line with the accounting policies adopted for preparing
and presenting the Standalone Financial Statements of the
Company as a whole. In addition, the following specific
accounting policies have been followed for segment
reporting:
** Segment revenue includes sales and other income directly
identifiable with / allocable to the segment including inter
segment transfers. Inter segment transfers are accounted
for based on the transaction price agreed to between the
segments which is at cost in case of transfer of Company's
intermediate and final products and estimated realizable
value in case of by-products
**Revenue, expenses, assets and liabilities are identified to
segments on the basis of their relationship to the operating
activities of the segment. Revenue, expenses, assets and
liabilities which relate to the Company as a whole and are
not allocable to segments on direct and/or on a reasonable
basis, have been disclosed as "Unallocable"
2.26 Assets (or disposal group) held for sale and discontinued
operation
Assets (or disposal group) are classified as held for sale if their
carrying amounts will be recovered principally through a
sale transaction rather than through continuing use and a
sale is considered highly probable. Assets held for sale are
measured at the lower of their carrying amount and the fair
value less costs to sell.
An impairment loss is recognized for any initial or subsequent
write-down of the asset (or disposal group) to fair value
less costs to sell. A gain is recognized for any subsequent
increases in fair value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative impairment
loss previously recognized. A gain or loss not previously
recognized by the date of the sale of the non-current asset (or
disposal group) is recognized at the date of de-recognition.
Assets (including those that are part of a disposal group)
are not depreciated or amortized while they are classified
as held for sale. Interest and other expenses attributable to
the liabilities of a disposal group classified as held for sale
continue to be recognized
Assets classified as held for sale and the assets of a disposal
group classified as held for sale are presented separately
from the other assets in the balance sheet. The liabilities
of a disposal group classified as held for sale are presented
separately from other liabilities in the balance sheet.
Assets classified as held for sale and the assets of a disposal
group classified as held for sale are presented separately
from the other assets in the balance sheet. The liabilities
of a disposal group classified as held for sale are presented
separately from other liabilities in the balance sheet.
• Represent as separate major line of business or
geographical area of operations,
• Is part of a single coordinated plan to dispose of a
separate major line of business or geographical area
of operations.
Discontinued operations are excluded from the results
of continuing operations and are presented as profit or
loss before/ after tax from discontinued operations in the
statement of profit and loss.
37 CONTINGENT LIABILITIES, CLAIMS, COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) AND OTHER DISPUTES
a. Claims against the company:
Service Tax:
During the year ended 31 March 2020, the Company received a demand notice from commissioner of central tax(Service tax) for
the period August 2014 to June 2017 demanding service tax of H 5,59,20,813/- (including penalty of H 2,50,47,324/- ) .The Company
believes that the claim is untenable and, accordingly, has filed appeals with the Appellate Tribunal regional bench Hyderabad
against the aforesaid notice which is in progress and pending disposal.
b. Bank Guarantees:
The Bank Guarantees as at 31st March 2025 are H 4,75,15,323/- and as at 31st March 2024 are H 3,85,34,323/-.
38 SEGMENT REPORTING
Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related
disclosures about products and services. Based on the 'Management' approach as defined under Ind AS108, the Chief Operating Decision
Maker (CODM) evaluates the performance on a periodical basis and allocates resources based on an analysis of the performance of
various Businesses. The CODM is the Managing Director. The accounting principles used in the preparation of the financial statements
are consistently applied to record revenue and expenditure in individual segments and are as set out in the Significant Accounting
Policies. Since, the Company is mainly pursuing only one activity i.e. manufacturing and selling of MCC, reporting of segment revenue
and results does not arise.
39 MSME
The Company is required to furnish details under section 22(1) to 22(5) of the Micro, Small and Medium Enterprises Development
Act ,2006 (MSMED Act) read with para FV of general instructions for balance sheet in division II of schedule III of the companies act ,2013.
As per the said regulations the company seeks information from the suppliers about registration particulars from them for furnishing
the information.
Disclosure in respect of principal and interest pertaining to the Micro,Small and Medium Enterprises Dev. Act 2006 based on available
details is as under:
The financial instruments are categorized into three levels based on the inputs used to arrive at fair value measurements as
described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement
date.
Level 2: Inputs are other than quoted prices included within Level 1 that are observable for the Asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices)
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 assumptions that are neither supported by prices from observable current market transactions
in the same instrument nor are they based on available market data.
41 CAPITAL MANAGEMENT
The company manages its capital to ensure that it will be able to continue as going concern while creating value for share holders by
facilitating the meeting of long term and short term goals of the Company.
The company determines the amount of capital required on the basis of annual business plan coupled long term and short term strategic
investment and expansion plans.
42 FINANCIAL RISK MANAGEMENT
In course of its business, the company is exposed to certain financial risk such as market risk , credit risk and liquidity risk that could have
significant influence on the company's business and operational/financial performance. The Board of directors and the Audit Committee
reviews and approves risk management framework and policies for managing these risks and monitor suitable mitigating actions taken
by the management to minimize potential adverse effects and achieve greater predictability to earnings.
a. Credit risk
Credit Risk refers to the risk that counter party will default on its contractual obligations resulting in financial loss to the company.
The Company has a prudent and conservative process for managing its credit risk raising in the course of its business activities.
Credit risk is managed through continuously monitoring the creditworthiness of customers and obtaining sufficient collateral,
where appropriate, a means of mitigating the risk of financial loss from defaults.
The company makes an allowance for doubtful debts/advances using expected credit loss model.
b. Liquidity risk
Liquidity Risk refers to the risk that the company will be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
Ultimate responsibility for liquidity risk management rests with the board of directors , which has established an appropriate
liquidity risk management framework for the management of the company's short term , medium term and long term funding
and liquidity management requirements.The company manages liquidity risk by maintaining adequate reserves ,banking facilities
and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles
of financial assets and liabilities.
The company has obtained fund and non fund based working capital loans from bank .The borrowed funds are generally applied
for company's own operational activities.
45 ADDITIONAL REGULATORY INFORMATION
a) The title deeds of the immovable property of the company are held in the name of the company.
b) The Property Plant and Equipment and intangible Assets held with the company are not subjected to revaluation during the year.
c) Whether Investments are valued at fair value - Not Applicable.
d) The company has not granted any loans or advances in the nature of loans to promoters , directors,, kmps and other related parties .
e) The company is not holding any benami property and no proceeding has been initiated or pending against the company.
f) The company has no transactions which is not recorded in the books of accounts that has been surrendered or disclosed as income
during the year in tax assessments under the income tax act 1961 (such as search or survey or any relevant provisions of income
tax act 1961.)
g) (A) The company has not advanced or loaned or invited by funds in any other person(s) or entity(ies) ,including foreign entities
(intermediaries) with understanding that the intermediary shall be directly or indirectly lend or invest in other person or
entities on behalf of the company or provide any guarantee or security or the like to or on behalf of the company.
(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the
understanding that company shall lend or invest in other person or entity identified in any manner by or on behalf of the
funding party/ Ultimate beneficiary or provide any guarantee or security or the like on behalf of the funding party / Ultimate
beneficiary.
h) The company is not declared as willful defaulter by any bank or financial institutions or Rbi or other lenders.
i) Hypothecation: First and exclusive charge on all existing and future current assets /moveable fixed assets of the borrower other
thany any encumbered assets.
All collateral securities and hypothecation on present and future current assets/moveable fixeda ssets of the borrower would be
extended to WTCL under ECGLS on second charge basis.
j) The company has borrowings from banks or financial institutions on the basis of security of current assets .Quarterly returns
or statement of current assets filed by the company with the banks or financial institutions are in agreement with the books of
accounts.
During the year, the company has been sanctioned working capital limits of H170 crores ,in aggregate from banks on the basis of
security of current assets. The company has filed quarterly returns of statements with such banks , which are in agreement with
the books of accounts.
Note: Pari-passu charge on the company's entire current assets namely stock of raw materials finished goods , stocks- in- process,
consumables stores and spares and book debts at its plant sites or anywhere else , in favour of the bank hypothecation.
j) The company has not invested or traded in crypto currency or virtual currency during the financial year.
46 CONFIRMATION OF BALANCES
Confirmation of balances from the parties for the amounts due from them have been confirmed by the parties.No material discrepancies
are observed.
Previous year's figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year's presentation.
As per our report of even date attached
For Yelamanchi & Associates
Chartered Accountants For and on behalf of the Board of Directors
Firm Regn No.000041S
G Jayanth Srinivas (FCA) Rabindra Prasad sinha S Chidambaranathan
Partner Executive Chairman Executive Vice Chairman
Membership No.251026
Amit Raj Sinha O.Subbarami Reddy
Managing Director and CEO Chief Financial Officer
Place: Hyderabad Vivek Kumar
Date: 30.05.2025 Company Secretary
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