o. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) A provision is recognized, if as a result of past event the company has present legal or constructive obligations that is
reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risk specific to liability.
(ii) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of
which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither
recognized nor disclosed in the financial statements.
These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
p. LEASES
The Company, as a lessee, recognizes a right of-use asset and a lease liability for its leasing arrangements, if the contract conveys
the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the
Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified
asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for
any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is
subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any
remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the
commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement
date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line
basis over the lease term
q. DEPRECIATION
(i) Normal depreciation on all property, plant & equipment except Land are provided from the date of put to use for
commercial production on Straight Line Method at the useful lives prescribed in Schedule-II to The Companies Act,
2013 and after providing for the residual value (maximum to the extent of 5%) of the Fixed Assets as determined by the
management.
(ii) Depreciation/Amortization on addition /deletions to Fixed Assets is provided on pro-rata basis from/to the date of
addition/deletions.
(iii) Depreciation/Amortization on additions/deletions to the fixed assets due to exchange rate fluctuation is provided on
pro-rata basis since inception.
(iv) The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the
effect of any change is accounted for on prospective basis.
r. PURCHASES
(i) Purchases returns / rebates are adjusted from the purchases of the year in which the returns take place / rebates allowed.
(ii) Purchases are accounted for "Net of VAT Credit/GST availed on eligible inputs".
s. CLAIMS BY/AGAINST THE COMPANY
Claims by/ against the Company arising on any account are provided for in the accounts on receipts/acceptances.
t. BORROWING COST
Borrowing cost are interest and other costs (including exchange differences relating to foreign currency borrowings to the
extent they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing
cost directly attributable to the acquisition or construction of qualifying /eligible assets, intended for commercial production
are capitalised as part of the cost of such assets. All other borrowing costs are recognized as an expense in the year in which
they are incurred.
u. STATEMENT OF CASH FLOWS
Statement of Cash Flows is made using the indirect method, whereby profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows from operating, financing and investing activities of
the Company are segregated.
v. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's principal financial liability includes Borrowings, T rade payable and other financial liabilities. The main purpose
of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include Trade
receivables, Cash and cash equivalents and other financial assets that derive directly from its operations. The Company is
exposed to credit risk, liquidity risk and Interest rate risk & market risk. The Company's senior management oversees the
management of these risks and the appropriate financial risk governance framework for the Company. The senior management
provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives.
The Board of Directors reviewed policies for managing each of these risks, which are summarized below:
(i) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss.
The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses
judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past
history, existing market conditions as well as forward looking estimates at the end of each balance sheet date. Financial assets
are written off when there is no reasonable expectation of recovery, however, the Company continues to attempt to recover
the receivables. Where recoveries are made, these are recognized in the Statement of Profit and Loss.
(ii) Liquidity Risk
Liquidity risk refers to the probability of loss arising from a situation where there will not be enough cash and/or cash
equivalents to meet the needs of depositors and borrowers, sale of illiquid assets will yield less than their fair value and illiquid
assets will not be sold at the desired time due to lack of buyers. The primary objective of liquidity management is to provide for
sufficient cash and cash equivalents at all times and any place in the world to enable us to meet our payment obligations.
(iii) 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. The Company's exposure to the risk of changes in market interest rates relates primarily to the
Company's borrowings obligations with floating interest rates.
w CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with Indian Accounting Standards (Ind AS) requires management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and
disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon management's
best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
a. Useful lives of Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the company. The charge in respect of
periodic depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value
at the end of its life. The useful lives and residual values of property, plant and equipment are determined by the management
based on technical assessment by internal team and external advisor. The lives are based on historical experience with similar
assets as well as anticipation of future events, which may impact their life, such as changes in technology. The Company
believes that the useful life best represents the period over which the Company expects to use these assets.
b. Contingent liability
Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/
litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
c. Income taxes
The calculation of the Company's tax charge necessarily involves a degree of estimation and judgement in respect of certain
items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or,
as appropriate, through a formal legal process. The Company reviews at each balance sheet date the carrying amount of
Income Tax /deferred tax Liabilities.
d. Defined benefit plans (gratuity)
The Company's obligation on account of gratuity is determined based on actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the
management considers the interest rates of government bonds in currencies consistent with the currencies of the post¬
employment benefit obligation.
x. Accounting Policies not specifically referred to are in accordance with generally accepted accounting principles.
32 Financial instruments
(i) Fair values hierarchy
Financial assets andfinancial liabilities measured atfairvalue in the statement of financial position are classified i nto three Levels of a fair value hierarchy.
The three levels are defined based on the observability of significant inputs to the measurement, as foll ows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of
observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Financial risk management
The Company's activities expose it to market risk, liquidity risk and credit risk. The Company's board of di rectors has overall responsibilityfortheestablishment
and oversight of the Company's risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages
the risk and the related impact in the financial statements.
A) Credit risk
Credit risk is the risk thata counterpartyfails to discharge an obligation to the company.The companyis exposed to this risk forvarious financial instruments, for
example by granting loans and receivables to customers, placing deposits, etc. The company's maximum exposure to credit risk is limited to the carrying amount
of followi ng types of financial assets.
- cash and cash equivalents,
- trade receivables,
- loans & receivables carried at amortised cost, and
- deposits with banks
Credit risk management
Credit risk rating
TheCompanyassesses and manages credit risk based on intemal credit rating system, continuouslymonitoring defaults of customers and othercounterparties,
identified eitherindividuallyorbythe company, and incorporates this information into its credit risk controls. Internal credit rating is performed foreach class of
financial instruments with different characteri stics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions,
inputs and factors specific to the class of financial assets.
B) Liquidity risk
Prudent liquidity risk management implies maintaining s ufficient cash and ma rketable securities and theavailabilityof funding through an adequate amountof
committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining
availability under committed facilities.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company
takes into account the liquidity of the marketin which the entityoperates. In addition, the Compa ny's liquidity management policy involves projecting cash flows
i n major currencies and consideringthe level of liquid assets necessaryto meet these, monitoring balance sheet liquidityratios against i nternal and external
regulatory requirements and maintaining debt financing plans.
Maturities of financial liabilities
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is not significant.
C) Market risk
a) Interest rate risk
The Company is not exposed to changes in market interest rates.
b) Price risk
Exposure
The Company's exposure to price risk arises is nil
Capital management
The Company' s capital management objectives a re
- to ensure the Company's ability to continue as a going concern
- to provide an adequate return to shareholders
Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure. This takes into account the
subordination levels of the Company's various classes of debt.The Companymanages the capital structure and makes adjustments to itin the lightof changes in
economic conditions and the risk characteristics of the underlying assets.
35. INVESTMENTS
Company has sent various notices to the Companies in which the company has made an investment, as neither
they are sending duplicate shares certificates nor replying to the letters of the company. The company has
misplaced/lost the share certificates of the investments made by it during the shifting of records. As such these
shares certificates are not physically held by the company as on 31st March, 2024. Accordingly, company has not
calculated the fair value of the investments.
36. The company is in the process of getting its name changed in the records of BSE Ltd & ASE, where the shares of
the company are listed and the necessary formalities in this regard will be completed soon.
37. The company has applied for renewal of its Drug Manufacturing Licences before the term of its expiry with the
Food & Drugs Administration (FDA), Panchkula, for manufacturing pharmaceutical and allied products and the
same is under consideration at the end of the FDA. The management of the company firmly believes that the
company would be able to restart its business operations as the company is getting quotes from the prospective
buyers & the management is of the opinion that the new deals would be finalized soon. Further, the management
of the company is also exploring the market and business opportunities and is putting necessary efforts in this
respect so that the operations of the company can be started again.
38. Annual Listing Fees of BSE is unpaid for the F.Y. 2021-22, 2022-23 & 2023-24. The management of the company is
trying to arrange the necessary funds and believes that all the outstanding dues of BSE shall be cleared soon.
39. Necessary disclosures under Micro, Small and Medium Enterprises Development Act 2006, could not be
considered for previous years as the relevant information to identify the suppliers who were covered under the
said Act were not received from such parties during the previous years.
45. Borrowings from Banks/FI on the basis of security of Current Assets: Company had no working capital limit with
bank hence no requirement of submission of quarterly statement to bank was applicable.
46. The company has not been declared as willful defaulter by any bank of financial institution or any other lender.
47. Transactions with Struck-off Companies: The Company has not entered into any transactions with struck off
companies under section 248 of the Companies Act 2013 or Section 560 of Companies Act 1956.
48. Registration of Charges or Satisfaction: During the year, company does not have any outstanding Charges.
49. Compliance with layers of the companies:-
The company has no layers of companies prescribed under Clause (87) of the Act read with Companies (Restriction
on number of Layers) Rules 2017.
50. Scheme of Arrangement : During the year, the company has not entered into any scheme or arrangement in
terms of Section 230 to 237 of the Companies Act 2013.
51. During the year no income was surrendered or disclosed as income in the tax Assessments.
52. Use of Borrowed Funds: During the year Company has not borrowed any funds from banks and Financial
Institutions.
53. The company has not dealt in Crypto Currency during the year.
54. The Company has not advanced or loaned or invested funds to any other person or entities with an
understanding that the intermediary will invest or provide any guarantee, security or the like to or on behalf of
ultimate beneficiaries.
55. The Company has not received any fund from any person (s) or entity(s), including foreign entities (Funding party)
with the understanding that the company shall directly or indirectly invest or provide any guarantee, security or
the like to or on behalf of funding party.
56. The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
57. In terms of Section 135(1) of the Companies Act, 2013, the provisions of Corporate Social Responsibility are not
applicable to the Company.
58. In the opinion of the Board, all current assets have a value on realization in the ordinary course of business which
is equal to the amount at which they are stated in financial statements.
59. Additional information, to the extent applicable, required under paragraphs 5 (viii) (c) of general instructions for
preparation of the Statement of profit & Loss as per schedule III to the Companies Act, 2013
60. The Company is engaged primarily in pharmaceuticals business and there are no separate reportable segments as
per IND AS-108.
61. Previous year figures have been regrouped, rearranged wherever necessary to correspond with the current year's
classification/disclosure.
For Nemani Garg Agarwal & Co. For and on behalf of the Board of Directors of MPS Pharmaa Limited
Chartered Accountants (Formerly Advik Laboratories Limited)
Firm Regn. No. : 010192N
Sd/- Sd/- Sd/- Sd/- Sd/-
(J.M.Khandelwal) (Peeyush Kumar Aggarwal) (Ram Niwas Sharma) (Manoj Bhatia) (Pooja Chuni)
Partner Chairman Director CFO Company Secretary
Membership No. 074267 DIN: 00090423 DIN:08427985
UDIN:24074267BKHG UW6380
Place: New Delhi
Date: 30th May, 2024
| 