Preliminary Placement Document Subject to Completion Not for Circulation and Strictly Confidential Serial Number: [●] ZYDUS WELLNESS LIMITED Registered Office: Zydus Corporate Park, Scheme no. 63, Survey no. 536, Khoraj (Gandhinagar), Near Vaishnodevi Circle, S.G. Highway, Ahmedabad - 382 481 Telephone: +91 79 7180 0000; E-mail: [email protected]; Website: www.zyduswellness.in; CIN: L15201GJ1994PLC023490 Zydus Wellness Limited (our “Company” or the “Issuer”) was originally incorporated as “Carnation Health Foods Limited” under the Companies Act, 1956 pursuant to a certificate of incorporation dated November 1, 1994 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Our Company commenced its business on November 25, 1994, pursuant to a certificate of commencement of business issued the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Subsequently, the name of our Company was changed to “Carnation Nutra-Analogue Foods Limited”, pursuant to a fresh certificate of incorporation consequent upon change of name issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli dated December 6, 1995. Subsequently, the name of our Company was changed to “Zydus Wellness Limited” pursuant to a fresh certificate of incorporation consequent upon change of name issued by the Registrar of Companies, Gujarat at Ahmedabad (“RoC”) dated January 5, 2009. For details with respect to changes to the name of our Company, see “General Information” beginning on page 193. Issue of up to [●] equity shares of face value ₹10 each of our Company (“Equity Shares”) at a price of ₹[●] per Equity Share (the “Issue Price”), including a premium of ₹[●] per Equity Share, aggregating up to ₹[●] lakhs (the “Issue”). For further details, see “Summary of the Issue” beginning on page 32. THIS ISSUE IS BEING UNDERTAKEN IN RELIANCE UPON CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, AS AMENDED (THE “SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE COMPANIES ACT, 2013 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER, EACH AS AMENDED (“COMPANIES ACT”) OUR COMPANY HAS PREPARED THIS PRELIMINARY PLACEMENT DOCUMENT SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE ISSUE. THE ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS BEING MADE TO ELIGIBLE QIBS (AS DEFINED HEREINAFTER) IN RELIANCE UPON SECTION 42 OF THE COMPANIES ACT, AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT AND CHAPTER VI OF THE SEBI ICDR REGULATIONS. THIS PRELIMINARY PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR. THE ISSUE DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PROSPECTIVE INVESTOR OR CLASS OR CATEGORY OF INVESTORS WITHIN OR OUTSIDE INDIA OTHER THAN ELIGIBLE QIBs. THIS PRELIMINARY PLACEMENT DOCUMENT SHALL BE CIRCULATED ONLY TO SUCH ELIGIBLE QIBs WHOSE NAMES ARE RECORDED BY OUR COMPANY PRIOR TO MAKING AN INVITATION TO SUBSCRIBE TO THE EQUITY SHARES. YOU MAY NOT AND ARE NOT AUTHORISED TO (1) DELIVER THIS PRELIMINARY PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE THIS PRELIMINARY PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENTS OR UTILISE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THE ISSUE. ANY DISTRIBUTION OR REPRODUCTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN VIOLATION OF THE COMPANIES ACT, THE SEBI ICDR REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND OF OTHER JURISDICTIONS. INVESTMENTS IN EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THE ISSUE UNLESS THEY ARE PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO CAREFULLY READ THE SECTION “RISK FACTORS” BEGINNING ON PAGE 39 BEFORE MAKING AN INVESTMENT DECISION RELATING TO THE ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES OF AN INVESTMENT IN THE EQUITY SHARES TO BE ISSUED PURSUANT TO THIS PRELIMINARY PLACEMENT DOCUMENT AND THE PLACEMENT DOCUMENT (AS DEFINED HEREINAFTER). PROSPECTIVE INVESTORS SHALL CONDUCT THEIR OWN DUE DILIGENCE ON THE EQUITY SHARES AND OUR COMPANY. IF YOU DO NOT UNDERSTAND THE CONTENTS OF THIS PRELIMINARY PLACEMENT DOCUMENT AND/OR THE PLACEMENT DOCUMENT, YOU SHOULD CONSULT AN AUTHORISED FINANCIAL ADVISOR AND/OR LEGAL ADVISOR. The Equity Shares are listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”, and together with BSE, the “Stock Exchanges”). The closing price of the outstanding Equity Shares on BSE and NSE as on September 22, 2020 was ₹1,767.50 and ₹1,782.70 per Equity Share, respectively. In-principle approvals pursuant to Regulation 28(1)(a) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing Regulations”), for listing of the Equity Shares to be issued pursuant to the Issue, have been received from BSE and NSE on September 23, 2020. Our Company shall make applications to the Stock Exchanges for obtaining the final listing and trading approvals for the Equity Shares to be issued pursuant to the Issue. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares to be issued pursuant to the Issue for trading on the Stock Exchanges should not be taken as an indication of the merits of our Company or of the Equity Shares. A copy of this Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4 (as defined hereinafter)) has been delivered to the Stock Exchanges and a copy of the Placement Document (which shall also include disclosures prescribed under Form PAS-4) will be delivered to the Stock Exchanges in due course. Our Company shall also make requisite filings with the RoC, within the stipulated timeframe prescribed under the Companies Act and the PAS Rules (as defined hereinafter), as amended. This Preliminary Placement Document has not been reviewed by SEBI, the Stock Exchanges, RoC or any other regulatory or listing authority and is intended only for use by Eligible QIBs (as defined hereinafter). This Preliminary Placement Document has not been and will not be filed as a prospectus with the RoC, will not be circulated or distributed to the public in India or any other jurisdiction, and the Issue will not constitute a public offer in India or any other jurisdiction. Invitations, offers and sales of Equity Shares to be issued pursuant to the Issue shall only be made pursuant to this Preliminary Placement Document together with the Application Form, the Placement Document and the Confirmation of Allocation Note (as defined hereinafter). For further details, see “Issue Procedure” beginning on page 151. The distribution of this Preliminary Placement Document or the disclosure of its contents, without our Company’s prior consent, to any person, other than Eligible QIBs and persons retained by Eligible QIBs to advise them with respect to their purchase of Equity Shares, is unauthorised and prohibited. Each prospective investor, by accepting delivery of this Preliminary Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Preliminary Placement Document or any documents referred to in this Preliminary Placement Document. The Equity Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and will only be offered and sold outside the United States in “offshore transactions” as defined in, and pursuant to, Regulation S under the U.S. Securities Act (“Regulation S”). The information on our Company’s website or any website directly or indirectly linked to our Company’s website or the website of the BRLM (as defined hereinafter) or any of its respective affiliates does not constitute nor form part of this Preliminary Placement Document and prospective investors should not rely on such information contained in, or available through, any such websites for their investment in this Issue. This Preliminary Placement Document is dated September 23, 2020. BOOK RUNNING LEAD MANAGER J.P. MORGAN INDIA PRIVATE LIMITED The information in this Preliminary Placement Document is not complete and may be changed. The Issue is meant only for Eligible QIBs under Chapter VI of the SEBI ICDR Regulations, on a private placement basis and is not an offer to the public or to any other class of investors to purchase the Equity Shares. This Preliminary Placement Document is not an offer to sell any Equity Shares and is not soliciting an offer to subscribe to or buy the Equity Shares in any jurisdiction where such offer, sale or subscription is not permitted. It is being issued for the sole purpose of information or discussion relating to the Equity Shares that may be issued through the Placement Document.
316
Embed
ZYDUS WELLNESS LIMITED · Zydus Wellness Limited (our “Company” or the “Issuer”) was originally incorporated as “Carnation Health Foods Limited” under the Companies Act,
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Zydus Wellness Limited (our “Company” or the “Issuer”) was originally incorporated as “Carnation Health Foods Limited” under the Companies Act, 1956 pursuant to a
certificate of incorporation dated November 1, 1994 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Our Company commenced its business on November
25, 1994, pursuant to a certificate of commencement of business issued the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Subsequently, the name of our Company
was changed to “Carnation Nutra-Analogue Foods Limited”, pursuant to a fresh certificate of incorporation consequent upon change of name issued by the Registrar of
Companies, Gujarat, Dadra and Nagar Haveli dated December 6, 1995. Subsequently, the name of our Company was changed to “Zydus Wellness Limited” pursuant to a fresh
certificate of incorporation consequent upon change of name issued by the Registrar of Companies, Gujarat at Ahmedabad (“RoC”) dated January 5, 2009. For details with
respect to changes to the name of our Company, see “General Information” beginning on page 193.
Issue of up to [●] equity shares of face value ₹10 each of our Company (“Equity Shares”) at a price of ₹[●] per Equity Share (the “Issue Price”), including a premium of ₹[●]
per Equity Share, aggregating up to ₹[●] lakhs (the “Issue”). For further details, see “Summary of the Issue” beginning on page 32.
THIS ISSUE IS BEING UNDERTAKEN IN RELIANCE UPON CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, AS AMENDED (THE “SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE
COMPANIES ACT, 2013 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER, EACH AS
AMENDED (“COMPANIES ACT”)
OUR COMPANY HAS PREPARED THIS PRELIMINARY PLACEMENT DOCUMENT SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH
THE ISSUE. THE ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS BEING MADE TO ELIGIBLE QIBS (AS
DEFINED HEREINAFTER) IN RELIANCE UPON SECTION 42 OF THE COMPANIES ACT, AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES
ACT AND CHAPTER VI OF THE SEBI ICDR REGULATIONS. THIS PRELIMINARY PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE
INVESTOR. THE ISSUE DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER
PROSPECTIVE INVESTOR OR CLASS OR CATEGORY OF INVESTORS WITHIN OR OUTSIDE INDIA OTHER THAN ELIGIBLE QIBs. THIS
PRELIMINARY PLACEMENT DOCUMENT SHALL BE CIRCULATED ONLY TO SUCH ELIGIBLE QIBs WHOSE NAMES ARE RECORDED BY OUR
COMPANY PRIOR TO MAKING AN INVITATION TO SUBSCRIBE TO THE EQUITY SHARES.
YOU MAY NOT AND ARE NOT AUTHORISED TO (1) DELIVER THIS PRELIMINARY PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2)
REPRODUCE THIS PRELIMINARY PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENTS
OR UTILISE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THE ISSUE. ANY
DISTRIBUTION OR REPRODUCTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO
COMPLY WITH THIS INSTRUCTION MAY RESULT IN VIOLATION OF THE COMPANIES ACT, THE SEBI ICDR REGULATIONS OR OTHER
APPLICABLE LAWS OF INDIA AND OF OTHER JURISDICTIONS.
INVESTMENTS IN EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THE ISSUE
UNLESS THEY ARE PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED
TO CAREFULLY READ THE SECTION “RISK FACTORS” BEGINNING ON PAGE 39 BEFORE MAKING AN INVESTMENT DECISION RELATING TO THE
ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES OF AN
INVESTMENT IN THE EQUITY SHARES TO BE ISSUED PURSUANT TO THIS PRELIMINARY PLACEMENT DOCUMENT AND THE PLACEMENT
DOCUMENT (AS DEFINED HEREINAFTER). PROSPECTIVE INVESTORS SHALL CONDUCT THEIR OWN DUE DILIGENCE ON THE EQUITY SHARES
AND OUR COMPANY. IF YOU DO NOT UNDERSTAND THE CONTENTS OF THIS PRELIMINARY PLACEMENT DOCUMENT AND/OR THE PLACEMENT
DOCUMENT, YOU SHOULD CONSULT AN AUTHORISED FINANCIAL ADVISOR AND/OR LEGAL ADVISOR.
The Equity Shares are listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”, and together with BSE, the “Stock Exchanges”). The closing
price of the outstanding Equity Shares on BSE and NSE as on September 22, 2020 was ₹1,767.50 and ₹1,782.70 per Equity Share, respectively. In-principle approvals pursuant
to Regulation 28(1)(a) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing
Regulations”), for listing of the Equity Shares to be issued pursuant to the Issue, have been received from BSE and NSE on September 23, 2020. Our Company shall make
applications to the Stock Exchanges for obtaining the final listing and trading approvals for the Equity Shares to be issued pursuant to the Issue. The Stock Exchanges assume
no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares to be issued pursuant to the Issue
for trading on the Stock Exchanges should not be taken as an indication of the merits of our Company or of the Equity Shares.
A copy of this Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4 (as defined hereinafter)) has been delivered to the Stock Exchanges
and a copy of the Placement Document (which shall also include disclosures prescribed under Form PAS-4) will be delivered to the Stock Exchanges in due course. Our Company
shall also make requisite filings with the RoC, within the stipulated timeframe prescribed under the Companies Act and the PAS Rules (as defined hereinafter), as amended. This
Preliminary Placement Document has not been reviewed by SEBI, the Stock Exchanges, RoC or any other regulatory or listing authority and is intended only for use by Eligible
QIBs (as defined hereinafter). This Preliminary Placement Document has not been and will not be filed as a prospectus with the RoC, will not be circulated or distributed to the
public in India or any other jurisdiction, and the Issue will not constitute a public offer in India or any other jurisdiction.
Invitations, offers and sales of Equity Shares to be issued pursuant to the Issue shall only be made pursuant to this Preliminary Placement Document together with the Application
Form, the Placement Document and the Confirmation of Allocation Note (as defined hereinafter). For further details, see “Issue Procedure” beginning on page 151. The
distribution of this Preliminary Placement Document or the disclosure of its contents, without our Company’s prior consent, to any person, other than Eligible QIBs and persons
retained by Eligible QIBs to advise them with respect to their purchase of Equity Shares, is unauthorised and prohibited. Each prospective investor, by accepting delivery of this
Preliminary Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Preliminary Placement Document or any documents referred to in
this Preliminary Placement Document.
The Equity Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and will only be offered and
sold outside the United States in “offshore transactions” as defined in, and pursuant to, Regulation S under the U.S. Securities Act (“Regulation S”).
The information on our Company’s website or any website directly or indirectly linked to our Company’s website or the website of the BRLM (as defined hereinafter) or any of
its respective affiliates does not constitute nor form part of this Preliminary Placement Document and prospective investors should not rely on such information contained in, or
available through, any such websites for their investment in this Issue.
This Preliminary Placement Document is dated September 23, 2020.
NOTICE TO INVESTORS .................................................................................................................................. 1
REPRESENTATIONS BY INVESTORS .......................................................................................................... 3
MARKET PRICE INFORMATION ................................................................................................................ 59
USE OF PROCEEDS ......................................................................................................................................... 62
CAPITAL STRUCTURE ................................................................................................................................... 64
RELATED PARTY TRANSACTIONS ............................................................................................................ 67
INDUSTRY OVERVIEW .................................................................................................................................. 90
OUR BUSINESS ............................................................................................................................................... 127
*As adjusted to reflect the number of Equity Shares issued pursuant to the Issue and proceeds from the Issue.
Adjustments do not include Issue related expenses.
Note:
1. On September 19, 2020, the Company allotted 21,22,000 Equity Shares on a preferential allotment basis to
Zydus Family Trust, one of its Promoters, at a price of Rs. 1,649.00 per Equity Share for an aggregate
consideration of Rs. 349,91,78,000.
64
CAPITAL STRUCTURE
The Equity Share capital of our Company as at the date of this Preliminary Placement Document is set forth
below:
Particulars Aggregate value at face value#
(in ₹)
A AUTHORISED SHARE CAPITAL
10,00,00,000 Equity Shares 1,00,00,00,000
B ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL BEFORE THE ISSUE
5,97,86,144 Equity Shares 59,78,61,440
C PRESENT ISSUE IN TERMS OF THIS PRELIMINARY PLACEMENT DOCUMENT(1)
Up to [●] Equity Shares [●]
D ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL AFTER THE ISSUE
[●] Equity Shares [●]
E SECURITIES PREMIUM ACCOUNT
Before the Issue (in ` lakhs) 2,90,421
After the Issue(2) (in ` lakhs) [●] # Except for share premium reserve
(1) The Issue has been authorised by the Board of Directors pursuant to its resolution passed on August 27, 2020. The Shareholders have
authorised and approved the Issue by way of a special resolution passed on September 19, 2020. (2) To be determined upon finalization of the Issue Price.
Equity Share capital history of our Company
The following table sets forth details of allotments of Equity Shares by our Company since its incorporation:
Date of
allotment
Number of
Equity
Shares
Face
value
per
Equity
Share
(₹)
Issue
price
per
Equity
Share
(₹)
Nature of
consideration
Reason/
Nature of
allotment
Cumulative
number of
Equity
Shares
Cumulative
paid-up
equity share
capital
( ₹)
November
10, 1994
70 10 10 Cash Subscription to
Memorandum
of Association
70 700
February 25,
1995
350,000 10 10 Cash Preferential
Allotment
3,50,070 35,00,700
December
20, 1995
52,25,030 10 10 Cash Initial public
offering
55,75,100 5,57,51,000
Forfeiture of 914,200 Equity Shares which were forfeited and were re-issued on June 2, 2005 for ₹70 per Equity Share.
January 17,
2009
3,34,96,989 10 - Other than
cash
Pursuant to a
composite
scheme of
arrangement (1)
3,90,72,089 39,07,20,890
January 29,
2019
1,85,92,055 10 1,385 Cash Preferential
Allotment
5,76,64,144 57,66,41,440
September
19, 2020
21,22,000 10 1,649 Cash Preferential
Allotment
5,97,86,144 59,78,61,440
(1) Pursuant to the scheme of arrangement between Cadila Healthcare Limited, Zydus Wellness Limited and Zydus Hospitals and Medical
Research Private Limited which was approved by the High Court of Gujarat vide its order dated October 23, 2008, Equity Shares were allotted
to the shareholders of Cadila Healthcare Limited in the ratio of 15:4.
65
Proposed Allottees in the Issue
In compliance with the requirements of Chapter VI of the SEBI ICDR Regulations, Allotment shall be made by
the Company, in consultation with the BRLM(s), to Eligible QIBs only, on a discretionary basis.
The names of the proposed Allottees and the percentage of post-Issue capital that may be held by them in our
Company is set forth below.
*Subject to receipt of funds and allotment in the Issue. The above table has been intentionally left blank and shall be updated
in the Placement Document.
These details of the proposed Allottees, assuming that the Equity Shares are Allotted to them pursuant to this
Issue, will be included in the Placement Document to be sent to such proposed Allottees.
Pre-Issue and post-Issue shareholding pattern of our Company
The pre-Issue shareholding pattern of our Company as on June 30, 2020 and the post-Issue shareholding pattern
of our Company is set forth below:
No. Category
Pre-Issue as of June 30, 2020 Post-Issue*
No. of Equity
Shares held
% of Equity
Share holding
No. of Equity
Shares held
% of Equity
Share holding
A Promoters’ holding
1 Indian
Individual 4,797 0.01 [●] [●]
Bodies corporate 3,66,48,149 63.55 [●] [●]
Others 24,71,193 4.29 [●] [●]
Sub-total 3,91,24,139 -- [●] [●]
2 Foreign promoters - -- [●] [●]
Sub-total (A) 3,91,24,139 67.85 [●] [●]
B Non-promoters’ holding
1 Institutional investors
Indian 1,29,36,424 22.43 [●] [●]
Foreign 11,60,222 2.01 [●] [●]
2 Non-institutional
Investors
Private corporate bodies 11,19,234 1.95 [●] [●]
Directors and relatives 9,776 0.02 [●] [●]
Indian public 29,03,256 5.03 [●] [●]
Others
(including Non-resident
Indians (NRIs))
4,11,093 0.71 [●] [●]
Sub-total (B) 1,85,40,005 32.15 [●] [●]
Total (A+B) 5,76,64,144 100.00 [●] [●]
*The details of the post-Issue shareholding pattern have been intentionally left blank and will be filled-in before filing of the
Placement Document with the Stock Exchanges.
Other Confirmations
Our Company has not made any allotments of Equity Shares, including for consideration other than cash, in the
last one year preceding the date of this Preliminary Placement Document.
No. Name of the proposed Allottee Percentage of post-Issue paid-
up Equity Share capital*
1. [●] [●]
2. [●] [●]
3. [●] [●]
4. [●] [●]
5. [●] [●]
Total [●]
66
Our Equity Shares have been listed for a period of at least one year prior to the date of the issuance of the notice
of the extra ordinary general meeting of our shareholders held on September 19, 2020, to the shareholders for the
approval of this Issue.
Our Company shall not make any subsequent qualified institutions placement until the expiry of two weeks from
the date of this Issue. Further, Equity Shares allotted pursuant to this Issue cannot be sold by the Allottee for a
period of one year from the date of allotment, except on the Stock Exchanges.
There will be no change of control of our Company pursuant to the Issue.
Other than as disclosed below, our Company has not allotted securities on preferential basis or private placement
or by way of rights issue in the last one year preceding the date of this Preliminary Placement Document:
Nature of issuance Date of allotment Number of Equity
Shares issued
Face value
(in `) Issue price of Equity
Shares (in `)
Preferential
Allotment
September 19, 2020 21,22,000 10 1,649
67
RELATED PARTY TRANSACTIONS
For details of the related party transactions as per the requirements under Ind AS 24, as notified under Section
133 of the Companies Act, 2013 read with Ind AS rules as amended for Fiscals 2020, 2019 and 2018, see
“Financial Statements” beginning on page 195.
68
DIVIDENDS
The declaration and payment of final dividend, if any, will be recommended by our Board and approved by our
Shareholders at their discretion, subject to the provisions of the Articles of Association and the applicable laws,
including the Companies Act.
Our Board may also, from time to time, declare interim dividends. Our Board has approved and adopted a formal
dividend distribution policy in terms of Regulation 43A of the SEBI Listing Regulations, effective from January
30, 2017. For further information, see “Description of the Equity Shares” beginning on page 173.
The following table details the dividend paid or payable by our Company on the Equity Shares in respect of the
quarter ended June 30, 2020 and Fiscals 2020, 2019 and 2018:
Particulars Quarter ended
June 30, 2020 Fiscal 2020 Fiscal 2019 Fiscal 2018
Face value of Equity Shares (in ₹ per
share) 10
10.00 10.00 10.00
Dividend (Interim) per share (in ₹) - 5.00 - -
Dividend (Final) per share (in ₹) - - 5.00 8.00
Total Dividend per share (in ₹) - 5.00 5.00 8.00
Total Dividend including Dividend
distribution tax (₹ in lakhs)
- 3,475.86 3,475.86 3,768.27
Dividend Rate (in %) - 50.00 50.00 80.00
Dividend distribution tax (₹ in lakhs) - 592.65 592.65 642.51
The amounts declared as dividend in the past are not indicative of dividend which may be declared by our
Company, if any, in the future. There is no guarantee that any dividends will be declared or paid in the future. The
frequency and amount of future dividends declared by our Company will depend on a number of internal and
external factors, including, but not limited to, current year’s profits, future outlook, operating cash flows,
extraordinary income/expenses, position of total debt to equity ratio, capital expenditure plans, inorganic growth
requirements and contingency requirements. For a summary of some of the restrictions that may materially affect
our ability to declare or pay dividends, see “Risk Factors – “There is no guarantee that we will pay dividends”
beginning on page 56.
The Equity Shares to be issued in connection with this Issue shall qualify for dividend including interim dividend,
if any, that is declared and record date thereof occurs after the Allotment. For further information, please see the
section entitled “Description of the Equity Shares” beginning on page 173.
For a summary of certain consequences under Indian taxation law of dividend distributions to shareholders, see
“Statement of Special Tax Benefits” on page 178.
69
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
We encourage you to read the following discussion in conjunction with the section entitled “Selected Financial
Data” as well as with our Financial Statements and the related notes thereto included elsewhere in this
Preliminary Placement Document. The following discussion includes forward-looking statements which, although
based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual
events or conditions to differ materially from those expressed or implied by the forward-looking statements. For
a discussion of some of those risks and uncertainties please refer to the sections entitled “Forward-Looking
Statements” and “Risk Factors” beginning on pages 14 and 39.
Our fiscal year ends on March 31 of each year, and references to a particular fiscal are to the twelve months
ended March 31 of that year. For further information, see “Financial Statements” beginning on page 195.
In this section, unless the context otherwise requires, a reference to “our Company” is a reference to Zydus
Wellness Limited on a standalone basis, while any reference to “we”, “us”, “our” or “Group” is a reference to
Zydus Wellness Limited on a consolidated basis.
Pursuant to the acquisition of Heinz India Private Limited (“Heinz”), on January 30, 2019, the consolidated
financial results for the fiscal year ended March 31, 2020, includes the operations of Heinz, which was merged
into Zydus Wellness Products Limited (formerly known as “Zydus Nutritions Limited”).
Overview
Our Company is one of the leading consumer health and wellness product manufacturing company with over 25
years of operational experience. We develop, manufacture and market a broad range of products, including under
the market leading brands Glucon-D, SugarFree, NYCIL, and other well-known brands like Complan, EverYuth,
Nutralite and Sugarlite. We believe that, our business combines healthcare, nutrition and cosmeceutical products
to provide quality wellness products. Our products in sugar substitute segment, fat spread segments, various
skincare segments such as peel offs and face scrub and other healthcare segments enjoy leading positions.
Headquartered in Ahmedabad, India, we enjoy a pan-India marketing and distribution network comprising more
than 1,700 distributors and approximately 2,000 “feet-on-street” representatives who facilitate the distribution of
our products to retailers across India.
We have a diversified portfolio with our product basket consisting of eight products used for various purposes
such as sugar substitutes, butter substitutes, health drinks, nutrition supplements, skin and personal care, products.
We believe that we are well positioned to sustain our existing leadership positions in key markets as well as exploit
significant growth opportunities that exist in the expanding FMCG sector, both in India and abroad.
We manufacture our products through five manufacturing facilities across four states in India (one in Gujarat,
Uttar Pradesh, Uttarakhand and two at Sikkim). The quality of our manufacturing facilities is evidenced by the
quality of certifications and accreditations, including the FSSC 22000 and ISO 22000, that our facilities have
70
obtained from various local and international accreditation agencies validating our process and quality
consistency. Our manufacturing facilities are supported by, our R&D facilities located in Gujarat and Maharashtra
with capabilities that enable us to support our growth strategy by developing new products and processes, which
enhance our range of products and their variants in the market, to cater to evolving consumer trends and
preferences.
We are further supported by our distribution capabilities, which include 20 cold chain warehouses, 25 ambient
warehouses, more than 1,700 distributors and 23 carry forward agents (“CFAs”). We believe that our structured
distribution network enables us to facilitate sales to address different consumer demands. Our products are
primarily sold by distributors to retail outlets and chains, in addition to various e-commerce platforms, pharmacies,
institutional channels, chains in the HORECA segment and institutions like CSD (Canteen Stores Department),
CPC (Central Police Canteens), UPGE (Uttar Pradesh Govt Employees Stores). Supplies are made available either
through distributors or directly by the Company. We have received a number of industry awards in recent years,
including Frost and Sullivan India Manufacturing Excellence Awards 2019 for Zydus Wellness Sikkim. We are a
part of the Zydus Cadila Group and our association provides us with a competitive edge on account of the goodwill
enjoyed by the Zydus Cadila Group. Cadila Healthcare Limited (“Cadila”), our corporate promoter is ranked 5th
in Indian pharmaceutical industry with a 4.18% market share in July 2020 (Source: AWACS July MAT 2020), and
revenue of ₹142,531 million with an EBITDA margin of 19.5% in Fiscal 2020. Cadila, is also promoted by Pankaj
Patel and Dr. Sharvil Patel, who have both been instrumental in the growth of our business. Our Promoters together
with the Promoter Group hold 67.85% of the shareholding of our Company as on June 30, 2020.
Our total income from operations in Fiscal 2020 was ₹1,76,682 lakhs, derived principally from the sale of branded
products. Over a period of three years from Fiscal 2018 to Fiscal 2020, our total income from operations has
grown at a CAGR of 84.1%. The last three months ended June 30, 2020 have witnessed a consolidated revenue
decline of 13.4%, as compared to the same period in the prior year. During the period of three years from Fiscal
2018 to Fiscal 2020, our PAT grew from ₹13,651 lakhs to ₹14,172 lakhs, registering a CAGR of 1.9%. The PAT
for Fiscal 2020 includes exceptional items pertaining to various expenses amounting to ₹4,420 lakhs incurred due
to integration of the business acquired from Heinz India Private Limited (“Heinz”). The CAGR growth excluding
this exceptional item would be 16.7%. For the three months ended June 30, 2020, the PAT was ₹8,920 lakhs,
registering a growth of 10.9% over the same period from the previous year. The acquisition was completed on
January 30, 2019.
Our History and Parentage
Our Company traces its beginning to November 1, 1994 as Carnation Health Foods Limited, the manufacturer
and marketer of Nutralite, a butter substitute and low-fat table spread. Our name was changed to Carnation Nutra
– Analogue Foods Limited in 1995. In 2006, Cadila acquired 61.56% controlling stake capital of our Company,
and we became a subsidiary of Cadila. In 2008, pursuant to the approval by the High Court of Gujarat to the
composite scheme of arrangement, the consumer products division of Cadila, consisting of ‘SugarFree’ and
‘EverYuth’ products, was demerged to our Company. Following the de-merger, the product portfolio of our
Company comprised of Nutralite, SugarFree and EverYuth. Subsequently, our name was changed to Zydus
Wellness Limited on January 5, 2009. On October 24, 2018, we entered into an agreement (jointly with Cadila)
to acquire 100% equity shares of Heinz. Pursuant to the Heinz acquisition, our portfolio brands expanded to
comprise of Glucon-D, NYCIL, Complan and Sampriti.
Significant factors affecting results of operations
We believe that the following factors, among others, have had and may continue to have a material effect on our
results of operations and financial condition. As many of these factors are beyond our control and a number of
these factors have historically been volatile, and accordingly, our past performance will not necessarily be
indicative of our future performance and it is difficult to predict future performance with any degree of certainty.
In addition, important factors that could cause our actual results of operations or financial condition to differ
materially from those expressed or implied below include, but are not limited to, factors indicated in this
Preliminary Placement Document under the section titled “Risk factors” beginning on page 39.
COVID-19
The World Health Organization declared the 2019 novel coronavirus (“COVID-19”) outbreak a Public Health
Emergency of International Concern on January 30, 2020, and a pandemic on March 11, 2020. Governments and
municipalities around the world instituted measures in an effort to control the spread of COVID-19, including
71
quarantines, shelter-in-place orders, school closings, travel restrictions, and closure of non-essential businesses.
The pandemic outbreak has caused an economic downturn on a global scale, including closures of many
businesses and reduced consumer spending, as well as significant market disruption and volatility. The steps taken
to counter the effects of the pandemic have resulted in a period of economic downturn and business disruption in
India and globally.
The ongoing COVID-19 pandemic has affected our business, financial condition and results of operations. In
addition to the macroeconomic impacts on the FMCG market in India and the customer demand, production
activities at our plants were disrupted, as we sought to comply with regulations and ensure the health of our
employees. Companies have faced disruptions in manufacturing and their supply chains. The disruptions in supply
chain and logistics led to decreased inventory levels at retailers, which in turn affected the supply of products to
consumers. According to the CRISIL Report, demand for food and home care was higher than personal care and
beauty products owing to increased concern on hygiene among consumers. Demand for premium category
essential items, discretionary items and personal care and beauty products was significantly impacted. The
decrease in demand may affect the sales of some of our products that may fall within the premium category or are
considered as discretionary items.
The COVID-19 pandemic has resulted in a decline in our Group’s revenue and profitability for the three months
ended June 30, 2020. At the outset of the pandemic, our immediate priority was to preserve cash flow and liquidity.
Due to seasonality of our business, we expect reduction in our cash and cash equivalent as at September 30, 2020
as compared to March 31, 2020, we continue to monitor and maintain our cash position and expect to continue to
meet our contractual obligations as they fall due with our operating cash flow. We can also access to credit facilities
from the bank in case of need. We will continue to re-evaluate our assessment of the long-term effects of COVID-
19 on consumer behaviour, supply chain and distribution.
As the situation has progressively stabilised, we have sought to obtain the necessary regulatory approvals for the
resumption of our manufacturing plants and the operation of our warehouses. A majority of our distributors have
also obtained permissions from local authorities to resume their business operations. While we have gradually
resumed our business activities, we have also adopted the necessary safe management practices as an integral part
of our operations to ensure the well-being of our employees and workforce. With the support from the Government
to ensure that essential services and businesses continue to operate, we have been able to resume a significant part
of our business operations to ensure that our products are available to consumers without significant interruptions.
In view of the fluidity of the situation and lack of visibility on the timeline for containment of the global pandemic,
the recovery trajectory remains uncertain. We continue to closely monitor the impact that COVID-19 may have
on our business and results of operations. Adverse effects of the COVID-19 pandemic may also significantly
increase the effect of the aforementioned factors affecting our results of operations
Acquisitions
We have established acquired and successfully integrated additional businesses, and our results of operations have
been influenced and will continue to be influenced by our acquisitions and partnerships. On January 30, 2019, we
completed the acquisition of 100% shareholding in Heinz India Private Limited (“Heinz”), which was a key
strategic acquisition to supplement our business verticals, grow and further strengthen our product portfolio,
increase our sales volume and increase our market share.
Heinz’s results of operations have been reflected in our consolidated financial statements since the date of
acquisition have had a significant impact on our Fiscal 2019 and Fiscal 2020 results. The key impacts of the Heinz
acquisition on our financial condition are as follows:
• increase in revenue from operation and EBITDA;
• change in capital structure through the infusion of equity of ₹2,575 crores and the issuance of non-
convertible debentures of ₹1,500 crores; and
• corresponding increase in the assets of the Company which include plant and machinery, land and building,
goodwill, brands and other intangible assets.
Regulations
Our business is subject to, and significantly affected by, laws and regulations India, and to a lesser extent in other
countries around the world. In India, the regulations governing our products have been evolving and the regulatory
72
framework can be uncertain due to limited guidance. These regulatory frameworks can have a significant impact
on our results of operations.
Being in the consumer healthcare and wellness segment, our products and manufacturing facilities and supply
chain processes are required to maintain high quality standards. Any deviation from prescribed regulations or any
variation in quality from standards laid down by regulatory authorities can lead to actions from these authorities
or litigation from our customers. Under Indian laws, we are required to obtain and renew various licenses and
approvals under several legislations from time to time including the Food Safety and Standards Act, 2006 (the
“FSS Act”), the Factories Act, 1948 and the Shops and Establishment Acts of various states and other central and
state laws applicable to our business. These approvals, licences, registrations and permits are subject to several
conditions and are primarily valid for only a specific period and are required to be renewed from time to time.
However, in some cases, these licenses could have been granted for shorter period as well. These licenses also
contain certain terms and conditions which are required to be complied with throughout the period of the license.
We have implemented various policies relating to quality risk management, food safety management systems and
regulatory controls. Different standard operating procedures such as global food safety management compliance
standards for manufacturing facilities and self-inspection are also implemented. A dedicated team has been
deployed to continuously identify the changes in regulatory requirements and evaluate their likely impact on our
Company, so as to enable proactive measures to mitigate any possible risks of regulatory actions.
Further, we derived a portion of our revenue from customers located outside India, and we anticipate that these
sales will represent an increasing proportion of our revenue over time. In addition, we have assets located outside
India and use non-Indian third-party suppliers. As a result, we are subject to numerous risks and uncertainties
relating to international sales and operations, including but not limited to different regulatory structures.
Further, regulatory changes relating to business segments in which we operate in India and overseas, including
tax incentives that are available to us can have a bearing on our business.
For further information on our regulatory environment and the related risks that we face, see “Regulation”, “Risk
Factors — Regulatory changes may adversely affect our performance or financial condition” and “Risk Factors
— Changing regulations in India, including in finance and taxation laws, could lead to new compliance
requirements that are uncertain”.
Competition and market position
Competition within the markets in which we operate is strong. Several of our products enjoy significant market
share in the markets that we operate. See “Our Business – Competition”. The risk of competition from existing
players, as well as from new entrants, remains high. However, we believe that our strength in the marketplace,
coupled with our continuous emphasis on improving the quality of our products and offering newer products in
the wellness segment may provide us with a competitive edge in the market. Our Company supplies products to
our distributors in the retail segment as well as to institutional customers. However, we are focused on increasing
our market share in all segments through a sound marketing strategy and a balanced approach.
We face significant competition from domestic and multinational competitors. In order to successfully compete
in our markets, we focus on developing and marketing premium, proven, aspirational and engaging products for
the Indian FMCG sector. In order to protect our existing market share or capture market share in this highly
competitive retail environment, we may be required to increase expenditure for advertising and promotions. We
use various media, such as television, digital, radio, press, outdoor hoarding as part of our advertisement plans. In
the recent past, we have effectively used celebrity endorsements for our brands such as Kareena Kapoor Khan and
Saif Ali Khan for Sugarlite, Parineeti Chopra and Abhay Deol for SugarFree, Sanjeev Kapoor for Nutralite, and
Sourav Ganguly for Complan. We may also be required to introduce and establish new products which have
certain inherent risks including uncertainties about trade and consumer acceptance. Our portfolio of brands has
diverse offerings in nutritional, food and personal care categories. We believe that we are uniquely positioned to
leverage our core strengths in innovation and scientific promotion that is healthy and responsive to the changing
times. Our niche brands offer solutions for customers of different age groups.
We also believe that launching new innovative products helps distinguish us from our competitors. For example,
during the COVID-19 pandemic, we launched a number of new products, including the NYCIL sanitizer, which
were positioned as herbal hand sanitizers and expanded our product offerings of hand sanitizers.
73
We have also entered new markets like New Zealand and Kenya. to build our international business. We enhanced
our portfolio with the launch of Complan products in countries like UAE, Bahrain, Qatar, Mauritius, Oman, Saudi
Arabi and Kuwait and launch of Nutralite products in Malaysia. We will continue to expand our footprints in new
international markets.
We may face the risk that our competitors develop better brands, technological advances, gain early access to
information and be better placed to act upon such information. Increasing competition could result in price and
supply volatility, which could cause our business to suffer. Our competitors may further, enter into business
combinations or alliances or technical collaborations that strengthen their competitive positions or prevent us from
taking advantage by entering such business combinations or alliances or technical collaborations. Increasing
competition may result in pricing pressures or decreasing profit margins or lost market share or failure to improve
our market position, any of which could substantially harm our business and results of operations. We will be
required to compete effectively with our existing and potential competitors, to maintain and grow our market share
and in turn, our results of operations. To remain competitive, we will have to continuously strive to improve
operating efficiencies, increase expenditure for advertising, promotions and introduce and establish new products.
For further information on our competition, see “Our Business – Competition.”
Seasonality
The sales of some of our products are subject to seasonality due to consumer behaviour. For example, the delay
or shift in seasons may impact business of some of our brands like Glucon-D and NYCIL which are largely
dependent on onset of a good summer season in India (and similarly can be disrupted by mild summer or early
monsoon). As a result, we can experience fluctuations in our product inventory levels and revenue throughout the
year. We expect this seasonality to continue, or possibly increase in the future, which may cause fluctuations in
our operating results and financial metrics.
Product mix and pricing
Our revenue is affected by the mix of products that we offer and their respective prices. We have a wide range of
health and wellness products at a number of price points. Our product portfolio includes popular brands, such as
Glucon-D, Complan, SugarFree, NYCIL, EverYuth, Nutralite and Sugarlite. Continuous research and feedback
from the consumers have helped us improve upon our brands and develop products that we believe suit changing
customer demand. For example, SugarFree Green is now available with an improved formulation and packaging
Sugarlite has been relaunched with better product formulation and enhanced taste; Nutralite continued to be well-
received by our customers with its core strengths of taste, health benefits and new offerings; and NYCIL hand
sanitizers was launched successfully during the COVID-19 pandemic. We are focused on research and innovation
and greater understanding of the consumer needs in order to develop a pipeline of products.
The mix of products that we offer our consumers and their relative appeal to our consumers has a significant
impact on our revenue, gross profit and gross profit margin and EBITDA and EBITDA margin. We regularly
evaluate our product offerings in terms of their quality offering, branding, retail and wholesale price and consumer
appeal. We plan to continue to invest in these product segments in order to implement our strategy to maintain
and strengthen our market position.
Product mix affects margins, as different products may provide different margins depending on the market at a
particular point in time. To meet market demand at different points of time, we may adjust the product mix within
our product range, which could have an impact on our margins. For further information, see “Our Business —
Product portfolio.”
Availability of Raw Materials
Our results of operations and financial position are impacted by the effectiveness of our product and raw material
supply chain. Agricultural commodity products, such as aspartame, lactose, dextrose monohydrate, maltodextrin,
sucralose, refined palm oil, palm kernel oil, skimmed milk powder, refined sesame oil, form a key part of our
supply chain. As we source these products from designated third party suppliers in India, the speed, efficiency and
effectiveness of our supply chain can impact our costs of sales, distribution costs and administrative expenses.
Prices of the key ingredients used in the products manufactured and marketed by the Company remain volatile
due to several market-related factors, including changes in government policies, commodity price fluctuation and
fluctuations in the foreign exchange rates. We have taken steps to diversify our network of suppliers and improve
lead times in our supply network in order to support future volume growth. We enter into long-term contracts,
74
wherever feasible, to minimise the risk of fluctuations in the input prices. Our market position and the significant
retail sales that we generate can also provide us with buying power with many of our suppliers and enable us to
achieve operational and cost efficiencies across our supply chain.
While we have consolidated our carry and forward agents (“CFAs”), these CFAs are located across India to
support our distribution network in the country. Our various optimisation and straight-line consolidation initiatives
have reduced logistics costs through warehouse and clearing and forwarding enhancement.
The per unit costs of producing a significant number of our products is impacted by the global markets. Our
products are subject to the supply and price volatility of the raw materials. Increases in the price of our raw
materials may negatively impact our gross profit margins if we are not able to offset such price increases through
increases in our selling price or changes to our product mix.
Inventory management
Our results of operations can be affected by our inventory management processes. We take ownership of
significant amounts of products each year. We track order levels and product commitments together with the sales
of products and amend order quantities as appropriate and where relevant, if possible. Where certain product lines
experience a slower rate of sale than that desired, we may apply discounts and/or increase marketing and
promotions.
We enter into contracts with third party manufacturers to produce some of our products, such as NYCIL.
Accordingly, our results of operations will be affected if these third party manufacturers do not perform their
obligations, or if these third party manufacturers deliver products (or component of products) that have a
manufacturing defect or do not comply with our specified quality standards and technical specifications.
We utilise a variety of agricultural raw materials in our products, including dairy products, and the availability of
these products is subject to many risks, including agricultural disease, insect or animal infestation, adverse weather
conditions, adverse ground conditions and natural and other disasters. Certain agricultural raw materials are
available only at specific times during a year due to the seasonality of growing periods and harvest times in India.
In addition, the available amounts of raw materials may not adjust in response to increasing demand. Our results
of operations will be affected in the event of any shortfall of our raw materials.
We have also integrated enterprise resource planning (“ERP”) system, SAP S/4HANA in fiscal year 2020. We
believe our ERP system enables us to effectively monitor business, optimise operational efficiency, maintain a
high level of responsiveness to our customers’ needs and lower operating cost.
Channel mix
Our result of operations is impacted by the mix of product sales across our channels. We believe that we are able
to maximize sales by engaging with our consumers across multiple channels. Our products are primarily sold by
distributors to retail outlets and chains, in addition to various e-commerce platforms, pharmacies, institutional
channels, chains in the HORECA segment and institutions like CSD (Canteen Stores Department), CPC (Central
Details of the shareholders acting as persons in Concert including their Shareholding (No. and %):
Details of Shares which remain unclaimed may be given here along with details such as number of shareholders, outstanding shares held in demat/unclaimed suspense account, voting rights
which are frozen etc.
150
Statement showing shareholding pattern of the non-promoter- non-public shareholder
Category & Name of the
Shareholders (I)
No. of
shareholder
(III)
No. of fully paid
up equity shares
held (IV)
Total No. shares
held (VII =
IV+V+VI)
Shareholding % calculated as
per SCRR, 1957 As a % of
(A+B+C2)(VIII)
Number of Locked in
shares(XII) Number of equity shares
held in dematerialized
form (XIV)(Not
Applicable) No
As a % of
total Shares
held
C1) Custodian/DR Holder 0 0 - 0.00 0.00 -
C2) Employee Benefit Trust 0 0 - 0.00 0.00 -
Details of disclosure made by the trading members holding 1% or more of the total number of shares of the Company
Name of the Trading Member Name of the Beneficial Owner No. of shares held % of total no. of shares Date of reporting by the Trading Member
Nil Nil Nil Nil Nil
151
ISSUE PROCEDURE
The following is a summary intended to present a general outline of the procedure relating to the application,
payment of Bid Amount, Allocation and Allotment of the Equity Shares. The procedure followed in the Issue may
differ from the one mentioned below and investors are assumed to have apprised themselves of the same from our
Company or the BRLM. Prospective Investors are advised to inform themselves of any restrictions or limitations
that may be applicable to them and are required to consult their respective advisers in this regard. Bidders that
apply in the Issue will be required to confirm and will be deemed to have represented to our Company, the BRLM
and their respective directors, officers, agents, affiliates and representatives that they are eligible under all
applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares. Also see “Selling
Restrictions” beginning on page 166.
Our Company, the BRLM and their respective directors, officers, agents, advisors, shareholders, employees,
counsel, affiliates and representatives are not liable for any amendment or modification or change to applicable
laws or regulations, which may occur after the date of this Preliminary Placement Document. Eligible QIBs are
advised to make their independent investigations and satisfy themselves that they are eligible to apply. Eligible
QIBs are advised to ensure that any single Bid from them does not exceed the investment limits or maximum
number of Equity Shares that can be held by them under applicable law or regulation or as specified in this
Preliminary Placement Document. Further, Eligible QIBs are required to satisfy themselves that their Bids would
not result in triggering an open offer under the SEBI Takeover Regulations and shall be solely responsible for
compliance with all the applicable provisions of the SEBI Takeover Regulations, the SEBI Insider Trading
Regulations, and other applicable laws.
Qualified Institutions Placement
THE ISSUE IS MEANT ONLY FOR ELIGIBLE QIBs ON A PRIVATE PLACEMENT BASIS AND IS
NOT AN OFFER TO THE PUBLIC OR TO ANY OTHER CLASS OF INVESTORS.
This Preliminary Placement Document has not been, and will not be, filed as a prospectus with the RoC and, no
Equity Shares will be offered in India or overseas to the public or any members of the public or any other class of
investors, other than Eligible QIBs.
The Issue is being made to Eligible QIBs in reliance upon Chapter VI of the SEBI ICDR Regulations and Section
42 and other applicable provisions of the Companies Act, through the mechanism of a QIP. Under Chapter VI of
the SEBI ICDR Regulations and Section 42 of the Companies Act and other applicable provisions of the
Companies Act, a listed company may issue eligible securities to Eligible QIBs provided that certain conditions
are met by such Company. Some of these conditions are set out below:
• the shareholders of the issuer have passed a special resolution approving such QIP. Such special
resolution must inter alia specify that, (a) the allotment of securities is proposed to be made pursuant to
the QIP; and (b) the relevant date for the QIP;
• the explanatory statement to the notice to the shareholders for convening the general meeting must
disclose, among other things, the particulars of the issue including the date of passing the board
resolution, the kind of securities being offered and the price at which they are offered, amount which the
company intends to raise by way of such securities and the material terms of raising such securities,
proposed issue schedule, the purpose or objects of offer, the contribution made by the promoters or
directors either as part of the offer or separately in furtherance of the objects, and the basis or justification
for the price (including premium, if any) at which the offer or invitation is being made;
• under Regulation 172(1)(b) of the SEBI ICDR Regulations, the equity shares of the same class of such
issuer, which are proposed to be allotted through the QIP, are listed on a recognised stock exchange in
India having nation-wide trading terminals for a period of at least one year prior to the date of issuance
of notice to its shareholders for convening the meeting to seek approval of the shareholders for the above-
mentioned special resolution;
• invitation to apply in the QIP must be made through a private placement offer-cum-application form
serially numbered and addressed specifically to the Eligible QIBs to whom the QIP is made either in
writing or in electronic mode, within 30 days of recording the name of such person in accordance with
applicable law; the issuer shall have completed allotments with respect to any earlier offer or invitation
152
made by the issuer or shall have withdrawn or abandoned such invitation or offer made by the issuer,
except as permitted under the Companies Act;
• the issuer shall not make any subsequent QIP until the expiry of two weeks from the date of the previous
QIP;
• an offer to Eligible QIBs will not be subject to a limit of 200 persons. Prior to circulating the private
placement offer-cum-application (i.e., this Preliminary Placement Document), the issuer shall prepare
and record a list of Eligible QIBs to whom the Issue will be made. The QIP must be made only to such
Eligible QIBs whose names are recorded by the issuer prior to the invitation to subscribe;
• the offering of securities by issue of public advertisements or utilisation of any media, marketing or
distribution channels or agents to inform the public about the QIP is prohibited. In accordance with the
SEBI ICDR Regulations, securities will be issued and allotment shall be made only in dematerialized
form to the allottees; and
• the promoters and directors of the issuer are not Fugitive Economic Offenders.
At least 10% of the equity shares issued to Eligible QIBs shall be available for Allocation to Mutual Funds,
provided that, if this portion, or any part thereof to be allotted to Mutual Funds remains unsubscribed, it may be
allotted to other Eligible QIBs.
Bidders are not allowed to withdraw or revise downwards their Bids after the Bid/ Issue Closing Date.
Additionally, there is a minimum pricing requirement under the SEBI ICDR Regulations. The floor price of the
equity shares issued under the QIP shall not be less than the average of the weekly high and low of the closing
prices of the issuer’s equity shares of the same class quoted on the stock exchanges during the two weeks preceding
the relevant date as calculated in accordance with Chapter VI of the SEBI ICDR Regulations. However, a discount
of up to 5% of the floor price is permitted in accordance with the provisions of the SEBI ICDR Regulations. Our
Board through its resolution dated August 27, 2020 and our Shareholders through a special resolution on
September 19, 2020, have authorised our Board to decide the quantum of discount up to 5% of the Floor Price at
the time of determination of the Issue Price.
The “relevant date” mentioned above in case of allotment of equity shares, refers to the date of the meeting in
which the board of directors or the committee of directors duly authorised by the board of the issuer decides to
open the proposed issue and “stock exchange” means any of the recognised stock exchanges in India on which
the equity shares of the issuer of the same class are listed and on which the highest trading volume in such shares
has been recorded during the two weeks immediately preceding the relevant date.
The securities must be allotted within 365 days from the date of the shareholders’ resolution approving the QIP
and also within 60 days from the date of receipt of subscription money from the relevant Eligible QIBs.
The Equity Shares issued pursuant to the Issue must be issued on the basis of this Preliminary Placement
Document and the Placement Document that shall contain all material information including the information
specified in Schedule VII of the SEBI ICDR Regulations and the requirements prescribed under PAS Rules and
Form PAS-4. This Preliminary Placement Document and the Placement Document are private documents
provided to only select Eligible QIBs through serially numbered copies and are required to be placed on the
website of the concerned Stock Exchanges and of our Company with a disclaimer to the effect that it is in
connection with an issue to Eligible QIBs and no offer is being made to the public or to any other category of
investors. Please note that if you do not receive a serially numbered copy of this Preliminary Placement Document
addressed to you, you may not rely on this Preliminary Placement Document or Placement Document uploaded
on the website of the Stock Exchanges or our Company for making an application to subscribe to Equity Shares
pursuant to the Issue.
The minimum number of allottees for each QIP shall not be less than:
• two, where the issue size is less than or equal to ₹25,000 lakhs; and
• five, where the issue size is greater than ₹25,000 lakhs.
153
No single Allottee shall be Allotted more than 50% of the Issue Size. Eligible QIBs that belong to the same group
or that are under common control shall be deemed to be a single Allottee for the purpose of the Issue. For details
of what constitutes “same group” or “common control”, see “Application Form – Bid Process” on beginning page
157.
Equity Shares being Allotted pursuant to the Issue shall not be sold for a period of one year from the date of
Allotment, except on the floor of a recognised stock exchange.
We have applied for and received the in-principle approval of the Stock Exchanges under Regulation 28(1)(a) of
the SEBI Listing Regulations for listing of the Equity Shares to be issued pursuant to the Issue on the Stock
Exchanges. We have filed a copy of this Preliminary Placement Document and will file a copy of the Placement
Document with the Stock Exchanges.
We shall also make the requisite filings with the RoC within the stipulated period as required under the Companies
Act and the PAS Rules.
The Issue has been authorised and approved by our Board on August 27, 2020 and our Shareholders through a
special resolution passed at the extra-ordinary general meeting on September 19, 2020.
Allotments made to VCFs and AIFs in the Issue are subject to the rules and regulations that are applicable
to each of them respectively, including in relation to lock-in requirement. VCFs and AIFs should
independently consult their own counsel and advisors as to investment in and related matters concerning
the Issue.
The Equity Shares offered hereby have not been and will not be registered under the U.S. Securities Act
and may not be offered or sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state
securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in
“offshore transactions” as defined in, and in reliance on Regulation S.
The Equity Shares issued pursuant to this Issue have not been and will not be registered, listed or otherwise
qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made
by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.
Issue Procedure
1. On Bid / Issue Opening Date, our Company in consultation with the BRLM shall circulate serially
numbered copies of this Preliminary Placement Document and the serially numbered Application Form,
either in electronic or physical form to Eligible QIBs and the Application Form will be specifically
addressed to such Eligible QIBs. In terms of Section 42(3) of the Companies Act, our Company shall
maintain complete records of such Eligible QIBs in the form and manner prescribed under the PAS Rules,
to whom this Preliminary Placement Document and the serially numbered Application Form have been
dispatched or circulated, as the case may be. Our Company will make the requisite filings with RoC
within the stipulated time period as required under the Companies Act.
2. The list of QIBs to whom the Application Form is delivered shall be determined by our Company in
consultation with the BRLM. Unless a serially numbered Preliminary Placement Document along with
the serially numbered Application Form, which includes the details of the bank account wherein the Bid
Amount is to be deposited, is addressed to a particular Eligible QIB, no invitation to subscribe shall be
deemed to have been made to such Eligible QIB. Even if such documentation were to come into the
possession of any person other than the intended recipient, no offer or invitation to offer shall be deemed
to have been made to such person and any application that does not comply with this requirement shall
be treated as invalid. The Application Form may be signed physically or digitally, if required under
applicable law in the relevant jurisdiction applicable to each Eligible QIB and as permitted under such
applicable law. An Eligible QIB may submit an unsigned copy of the Application Form, as long as the
Bid Amount is paid along with submission of the Application Form within the Bid/Issue Period. Once a
duly filled Application Form is submitted by an Eligible QIB, whether signed or not, and the Bid Amount
has been transferred to the Escrow Account, such Application Form constitutes an irrevocable offer and
cannot be withdrawn or revised downwards after the Bid/Issue Closing Date. In case Bids are being made
on behalf of the Eligible QIB and this Application Form is unsigned, it shall be assumed that the person
154
submitting the Application Form and providing necessary instructions for transfer of the Bid Amount to
the Escrow Account, on behalf of the Eligible QIB is authorised to do so.
3. Eligible QIBs may submit an Application Form, including any revisions thereof, along with the Bid
Amount transferred to the escrow account specified in the application form and a copy of the PAN card
or PAN allotment letter and/or any other documents mentioned in the Application Form, during the Bid/
Issue Period to the BRLM.
4. Bidders will be required to indicate the following in the Application Form:
• full official name of the Bidder to whom Equity Shares are to be Allotted, complete address, e-
mail id, PAN details (if applicable), phone number and bank account details;
• number of Equity Shares Bid for;
• price at which they are agreeable to subscribe to the Equity Shares and the aggregate Bid Amount
for the number of Equity Shares Bid for;
• details of the beneficiary account maintained by the Depository Participant to which the Equity
Shares should be credited pursuant to the Issue;
• equity shares held by the Bidder in our Company prior to the Issue; and
• it has agreed to certain other representations set forth in the Application Form.
NOTE: Eligible FPIs are required to indicate their SEBI FPI registration number in the Application
Form. The Bids made by the asset management companies or custodian of Mutual Funds shall
specifically state the names of the concerned schemes for which the Bids are made. In case of a Mutual
Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI
and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple
Bids provided that the Bids clearly indicate the scheme for which the Bid has been made. Application by
various schemes or funds of a Mutual Fund will be treated as one application from the Mutual Fund.
Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or
maximum number of Equity Shares that can be held by them under applicable laws.
5. Eligible QIBs shall be required to make the entire payment of the Bid Amount for the Equity Shares Bid
for, along with the Application Form, only through electronic transfer to the Escrow Account opened in
the name of “Zydus Wellness Limited – Escrow Account - Equity share issue FY 2020-21” with the
Escrow Agent, within the Bid/Issue Period as specified in the Application Form sent to the respective
Bidders. Please note that any payment of Bid Amount for the Equity Shares shall be made from the bank
accounts of the relevant Bidders and our Company shall keep a record of the bank account from where
such payment has been received. No payment shall be made in the Issue by the Bidders in cash. Bid
Amount payable on Equity Shares to be held by joint holders shall be paid from the bank account of the
person whose name appears first in the Application Form. Until Allotment, and the filing of return of
Allotment by our Company with the RoC, or receipt of final listing and trading approvals from the Stock
Exchanges, whichever is later, Bid Amount received for subscription of the Equity Shares shall be kept
by our Company in a separate bank account with a scheduled bank and shall be utilised only for the
purposes permitted under the Companies Act. Notwithstanding the above, in the event (a) any Bidder is
not allocated Equity Shares in the Issue, (b) the number of Equity Shares Allotted to a Bidder is lower
than the number of Equity Shares applied for through the Application Form and towards which Bid
Amount has been paid by such Bidder, (c) the Bid Amount has been arrived at using an indicative price
higher than the Issue Price, or (d) any Eligible QIB lowers or withdraws their Bid after submission of the
Application Form but on or prior to the Issue Closing Date, the excess Bid Amount will be refunded to
the same bank account from which it was remitted, in the form and manner set out in “– Refunds” on
page 162.
6. Once a duly completed Application Form is submitted by a Bidder and the Bid Amount is transferred to
the Escrow Account, such application constitutes an irrevocable offer and the Bid cannot be withdrawn
or revised downwards after the Bid/ Issue Closing Date. In case of an upward revision before the Bid/
Issue Closing Date, an additional amount shall be required to be deposited towards the Bid Amount in
155
the Escrow Account along with the submission of such revised Bid. The Bid/ Issue Closing Date shall
be notified to the Stock Exchanges and the Eligible QIBs shall be deemed to have been given notice of
such date after receipt of the Application Form.
7. Upon receipt of the duly completed Application Form and the Bid Amount in the Escrow Account, on
or after the Bid/ Issue Closing Date, our Company shall, in consultation with BRLM determine the final
terms, including the Issue Price of the Equity Shares to be issued pursuant to the Issue and Allocation.
Upon such determination, the BRLM, on behalf of our Company, will send the serially numbered CAN
and the Placement Document to the Successful Bidders. The dispatch of a CAN, and the Placement
Document (when dispatched) to a Successful Bidder shall be deemed a valid, binding and irrevocable
contract for the Successful Bidders to subscribe to the Equity Shares Allocated to such Successful
Bidders at an aggregate price equivalent to the product of the Issue Price and Equity Shares Allocated to
such Successful Bidders. The CAN shall contain details such as the number of Equity Shares Allocated
to the Successful Bidders, Issue Price and the aggregate amount received towards the Equity Shares
Allocated. Please note that the Allocation will be at the absolute discretion of our Company and
shall be in consultation with the BRLM.
8. Upon determination of the Issue Price and before Allotment of Equity Shares to the Successful Bidders,
the BRLM, shall, on our behalf, send a serially numbered Placement Document either in electronic form
or through physical delivery to each of the Successful Bidders who have been Allocated Equity Shares
pursuant to dispatch of a serially numbered CAN.
9. Upon dispatch of the serially numbered Placement Document, our Company shall Allot Equity Shares
as per the details in the CANs sent to the Successful Bidders. Our Company will inform the Stock
Exchanges of the details of the Allotment.
10. After passing the resolution passed by the Board or its committee approving the Allotment and prior to
crediting the Equity Shares into the beneficiary account of the Successful Bidders maintained by the
Depository Participant, as specified in the records of the depositories or as indicated in their respective
Application Form, our Company shall apply to the Stock Exchanges for listing approvals in respect of
the Equity Shares Allotted pursuant to the Issue.
11. After receipt of the listing approvals of the Stock Exchanges, our Company shall credit the Equity Shares
Allotted pursuant to this Issue into the beneficiary accounts of the respective Allottees.
12. Our Company will then apply for the final trading approvals from the Stock Exchanges.
13. The Equity Shares that would have been credited to the beneficiary account with the Depository
Participant of the Successful Bidders shall be eligible for trading on the Stock Exchanges only upon the
receipt of final trading and listing approvals from the Stock Exchanges.
14. As per applicable law, the Stock Exchanges will notify the final listing and trading approvals, which are
ordinarily available on their websites, and our Company may communicate the receipt of the listing and
trading approvals to those Eligible QIBs to whom the Equity Shares have been Allotted. Our Company
and the BRLM shall not be responsible for any delay or non-receipt of the communication of the final
trading and listing permissions from the Stock Exchanges or any loss arising from such delay or non-
receipt. Investors are advised to apprise themselves of the status of the receipt of the permissions from
the Stock Exchanges or our Company.
15. A representation that it is outside the United States acquiring the Equity Shares in an “offshore
transaction” as defined in, and in reliance on, Regulation S, and it has agreed to certain other
representations set forth in the Application Form.
Eligible QIBs
Only Eligible QIBs as defined under Regulation 2(1)(ss) of the SEBI ICDR Regulations, and not
otherwise restricted from participating in the Issue under the applicable law, will be considered as
Eligible QIBs. FVCIs are not permitted to participate in the Issue. Currently, QIBs, who are eligible to
participate in the Issue and also as defined under Regulation 2(1)(ss) of the SEBI ICDR Regulations, are
set forth below:
156
• Eligible FPIs;
• insurance companies registered with the Insurance Regulatory and Development Authority of India;
• insurance funds set up and managed by army, navy or air force of the Union of India;
• insurance funds set up and managed by the Department of Posts, India.
• multilateral and bilateral development financial institutions eligible to invest in India;
• Mutual Funds, VCFs, AIFs;
• pension funds with minimum corpus of ₹2,500 lakhs;
• provident funds with minimum corpus of ₹2,500 lakhs;
• public financial institutions as defined under Section 2(72) of the Companies Act;
• scheduled commercial banks;
• state industrial development corporations;
• systemically important non-banking financial companies; and
• the National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005
of the Government published in the Gazette of India.
ELIGIBLE FPIS ARE PERMITTED TO PARTICIPATE UNDER SCHEDULE II OF FEMA RULES IN
THIS ISSUE. ELIGIBLE FPIS ARE PERMITTED TO PARTICIPATE IN THE ISSUE SUBJECT TO
COMPLIANCE WITH ALL APPLICABLE LAWS AND SUCH THAT THE SHAREHOLDING OF THE
FPIS DO NOT EXCEED SPECIFIED LIMITS AS PRESCRIBED UNDER APPLICABLE LAWS IN
THIS REGARD. FVCIS ARE NOT PERMITTED TO PARTICIPATE IN THIS ISSUE.
Other eligible non-resident QIBs shall participate in the Issue under Schedule I of the FEMA Rules.
In terms of the FPI Regulations, the Equity Shares issued to a single Eligible FPI or an investor group (multiple
entities registered as FPIs and directly or indirectly, having common ownership of more than fifty per cent or
common control) should not exceed 10% of post-Issue Equity Share capital of our Company. Further, in terms of
the FEMA Rules, the total holding of each FPI or its investor group shall be below 10% of the total post issue
paid-up Equity Share capital of our Company on a fully diluted basis. With effect from April 1, 2020, the aggregate
limit for FPI investments shall be the sectoral cap applicable to our Company on a fully diluted basis. Hence,
Eligible FPIs may invest in such number of Equity Shares in the Issue such that (i) the individual investment of
the FPI in our Company does not exceed 10% of the post -Issue paid-up capital of our Company on a fully diluted
basis, and (ii) the aggregate investment by FPIs in our Company does not exceed the sectoral cap applicable to
our Company on a fully diluted basis.
In case the holding of an FPI including its investor group increases to 10% or more of the total post-Issue paid-up
equity capital, on a fully diluted basis, the FPI including its investor group is required to divest the excess holding
within five trading days from the date of settlement of the trades resulting in the breach. In the event that such
divestment of excess holding is not done within the above prescribed time, the total investment made by such FPI
together with its investor group will be re-classified as FDI as per procedure specified by SEBI and the FPI and
its investor group will be prohibited from making any further portfolio investment in our Company under the
SEBI FPI Regulations. However, in accordance with Regulation 22(4) of the SEBI FPI Regulations, the FPIs who
are: (i) appropriately regulated public retail funds; (b) public retail funds where the majority is owned by
appropriately regulated public retail fund on look through basis; or (c) public retail funds and investment managers
of such foreign portfolio investors are appropriately regulated, the aggregation of the investment limits of such
FPIs having common control, shall not be applicable.
As per the circular issued by SEBI on November 24, 2014, these investment restrictions shall also apply to
subscribers of P- Notes. Two or more subscribers of P-Notes having a common beneficial owner shall be
considered together as a single subscriber of the P-Note. In the event an investor has investments as an FPI and
as a subscriber of P-Notes, these investment restrictions shall apply on the aggregate of the FPI and P-Note
investments held in the underlying company.
157
Pursuant to the SEBI Circular dated April 5, 2018 (Circular No: IMD/FPIC/CIR/P/2018/61), our Company has
appointed Central Depository Services (India) Limited as the designated depository to monitor the level of FPI /
NRI shareholding in our Company on a daily basis and once the aggregate foreign investment of a company
reaches a cut-off point, which is 3% below the overall limit a red flag shall be activated. SEBI however, pursuant
to its Circular dated May 17, 2018 (Circular No: SEBI/HO/IMD/FPIC/CIR/P/2018/81), directed that this system
of monitoring foreign investment limits in Indian listed companies be made operational with effect from June 1,
2018. The depository is then required to inform the Stock Exchanges about the activation of the red flag. The
stock exchanges are then required to issue the necessary circulars/ public notifications on their respective websites.
Once a red flag is activated, the FPIs must trade cautiously, because in the event that there is a breach of the
sectoral cap, the FPIs will be under an obligation to disinvest the excess holding within five trading days from the
date of settlement of the trades.
Eligible FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions which
may be specified by the Government from time to time.
In terms of the FEMA Rules, for calculating the aggregate holding of FPIs in a company, holding of all registered
FPIs shall be included. For a description of the restrictions applicable to the offer and sale of the Equity Shares in
the Issue in certain jurisdictions, see “Selling Restrictions” beginning on page 166.
Restriction on Allotment
Pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations, no Allotment shall be made pursuant to the
Issue, either directly or indirectly, to any Eligible QIB being a promoter, or any person related to, the promoter.
QIBs, which have all or any of the following rights, shall be deemed to be persons related to the promoter:
• rights under a shareholders’ agreement or voting agreement entered into with the promoters or members of
the promoter group;
• veto rights; or
• a right to appoint any nominee director on the board of the issuer.
Provided, however, that an Eligible QIB which does not hold any Equity Shares in our Company and which has
acquired the aforesaid rights in the capacity of a lender shall not be deemed to be related to the promoter.
Our Company, the BRLM and any of their respective shareholders, employees, counsel, officers, directors,
representatives, agents, advisors or affiliates shall not be liable for any amendment or modification or
change to applicable laws or regulations, which may occur after the date of this Preliminary Placement
Document. Eligible QIBs are advised to make their independent investigations and satisfy themselves that
they are eligible to apply. Eligible QIBs are advised to ensure that any single application from them does
not exceed the investment limits or maximum number of Equity Shares that can be held by them under
applicable law or regulation or as specified in this Preliminary Placement Document. Further, Eligible
QIBs are required to satisfy themselves that their Bids would not eventually result in triggering a tender
offer under the SEBI Takeover Regulations and ensure compliance with applicable laws.
A minimum of 10% of the Equity Shares offered in the Issue shall be Allotted to Mutual Funds. In case of
undersubscription in such portion, such portion or part thereof may be Allotted to other Eligible QIBs.
Note: Affiliates or associates of the BRLM who are Eligible QIBs may participate in the Issue in compliance with
applicable laws.
Bid Process
Application Form
Eligible QIBs shall only use the serially numbered Application Forms (which are addressed to them) supplied by
our Company and the BRLM in either electronic form or by physical delivery for the purpose of making a Bid
(including revision of a Bid) in terms of this Preliminary Placement Document and the Placement Document.
By making a Bid (including the revision thereof) for Equity Shares through Application Forms and pursuant to
the terms of this Preliminary Placement Document, the Eligible QIB will be deemed to have made all the following
representations and warranties and the representations, warranties and agreements made under “Notice to
Investors”, “Representations by Investors” and “Selling Restrictions” beginning on pages 1, 3 and 166,
respectively:
158
1. Each Eligible QIB confirms that it is a QIB in terms of Regulation 2(1)(ss) of the SEBI ICDR Regulations
and is not excluded under Regulation 179(2)(b) of the SEBI ICDR Regulations, has a valid and existing
registration under the applicable laws in India (as applicable) and is eligible to participate in this Issue;
2. Each Eligible QIB confirms that it is not a Promoter and is not a person related to the Promoter(s), either
directly or indirectly and its Application Form does not directly or indirectly represent the Promoter(s)
or members of the Promoter Group or persons related to the Promoter(s);
3. Each Eligible QIB confirms that it has no rights under a shareholders’ agreement or voting agreement
with the Promoter or members of the Promoter Group, no veto rights or right to appoint any nominee
director on the Board other than those acquired in the capacity of a lender not holding any Equity Shares
which shall not be deemed to be a person related to the Promoter(s);
4. Each Bidder confirms that in the event it is resident outside India, it is an Eligible FPI, having a valid
and existing registration with SEBI under the applicable laws in India or a multilateral or bilateral
development financial institution, and is eligible to invest in India under applicable law, including the
FEMA Rules, as amended, and any notifications, circulars or clarifications issued thereunder, and has
not been prohibited by SEBI or any other regulatory authority, from buying, selling, dealing in securities
or otherwise accessing the capital markets and is not an FVCI;
5. Each Eligible QIB acknowledges that it has no right to withdraw or revise its Bid downwards after the
Bid / Issue Closing Date;
6. Each Eligible QIB confirms that if Equity Shares are Allotted through this Issue, it shall not, for a period
of one year from Allotment, sell such Equity Shares otherwise than on the Stock Exchanges;
7. Each Eligible QIB confirms that the Eligible QIB is eligible to Bid and hold Equity Shares so Allotted
together with any Equity Shares held by it prior to the Issue, if any. Each Eligible QIB further confirms
that the holding of the Eligible QIB, does not and shall not, exceed the level permissible as per any
applicable regulations applicable to the Eligible QIB;
8. Each Eligible QIB confirms that its Bids would not eventually result in triggering a tender offer under
the SEBI Takeover Regulations;
9. The Eligible QIB agrees that it will make payment of its Bid Amount along with submission of the
Application Form within the Issue Period. Each Eligible QIB agrees that once a duly filled Application
Form is submitted by an Eligible QIB, whether signed or not, and the Bid Amount has been transferred
to the Escrow Account, such Application Form constitutes an irrevocable offer and cannot be withdrawn
or revised downwards after the Bid/Issue Closing Date;
10. The Eligible QIB agrees that although the Bid Amount is required to be paid by it along with the
Application Form within the Issue Period in terms of provisions of the Companies Act, our Company
reserves the right to Allocate and Allot Equity Shares pursuant to this Issue on a discretionary basis in
consultation with the BRLM. The Eligible QIB further acknowledges and agrees that the payment of Bid
Amount does not guarantee Allocation and/or Allotment of Equity Shares Bid for in full or in part;
11. The Eligible QIB acknowledges that in terms of the requirements of the Companies Act, upon Allocation,
our Company will be required to disclose names as “proposed Allottees” and percentage of post-Issue
shareholding of the proposed Allottees in the Placement Document and such QIB consents of such
disclosure, if any Equity Shares are Allocated to it. However, the Eligible QIB further acknowledges and
agrees that, disclosure of such details as “proposed Allottees” in the Placement Document will not
guarantee Allotment to them, as Allotment in the Issue shall continue to be at the sole discretion of our
Company, in consultation with the BRLM;
12. The Eligible QIB confirms that the number of Equity Shares Allotted to it pursuant to the Issue, together
with other Allottees that belong to the same group or are under common control, shall not exceed 50%
of the Issue. For the purposes of this representation:
(a) QIBs “belonging to the same group” shall mean entities where (a) any of them controls, directly or
indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the
other; (b) any of them, directly or indirectly, by itself, or in combination with other persons, exercise
control over the others; or (c) there is a common director, excluding nominee and Independent
159
Directors, amongst an Eligible QIB, its subsidiary(ies) or holding company and any other Eligible
QIB; and
(b) ‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the SEBI
Takeover Regulations;
13. The Eligible QIBs acknowledge that no Allocation shall be made to them if the price at which they have
Bid for in the Issue is lower than the Issue Price.
14. Each Eligible QIB confirms that it shall not undertake any trade in the Equity Shares credited to its
beneficiary account maintained with the Depository Participant until such time that the final listing and
trading approvals for the Equity Shares are issued by the Stock Exchanges.
15. Each Eligible FPI, confirms that it will participate in the Issue only under and in conformity with
Schedule II of FEMA Rules. Further, each Eligible FPI acknowledges that Eligible FPIs may invest in
such number of Equity Shares such that the individual investment of the Eligible FPI or its investor group
(multiple entities registered as FPIs and directly or indirectly, having common ownership of more than
fifty per cent or common control) in our Company does not exceed 10% of the post-Issue paid-up capital
of our Company on a fully diluted basis. The Bidder confirms that it, individually or together with its
investor group, is not restricted from making further investments in our Company through the portfolio
investment route, in terms of Regulation 22(3) of the SEBI FPI Regulations.
ELIGIBLE QIBs MUST PROVIDE THEIR NAME, COMPLETE ADDRESS, PHONE NUMBER,
EMAIL ID, BANK ACCOUNT DETAILS, BENEFICIARY ACCOUNT DETAILS, PAN, DEPOSITORY
PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND
BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. ELIGIBLE QIBs MUST
ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS
THE NAME IN WHICH THEIR BENEFICIARY ACCOUNT IS HELD.
IF SO REQUIRED BY THE BRLM, THE ELIGIBLE QIBs SUBMITTING A BID, ALONG WITH THE
APPLICATION FORM, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO THE
BRLM TO EVIDENCE THEIR STATUS AS A “QIB” AS DEFINED HEREINABOVE.
IF SO REQUIRED BY THE BRLM, ESCROW AGENT OR ANY STATUTORY OR REGULATORY
AUTHORITY IN THIS REGARD, INCLUDING AFTER BID/ISSUE CLOSING DATE, THE ELIGIBLE
QIBs SUBMITTING A BID AND/OR BEING ALLOTTED EQUITY SHARES IN THE ISSUE, WILL
ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO FULFILL THE APPLICABLE KNOW
YOUR CUSTOMER (KYC) NORMS.
Demographic details such as address and bank account will be obtained from the Depositories as per the
Depository Participant account details provided in the Application Form. However, for the purposes of refund of
all or part of the Bid Amount submitted by the Bidder, the bank details as mentioned in the Application Form
from which the Bid Amount shall be remitted for the Equity Shares applied for in the Issue, will be considered.
The submission of an Application Form and payment of the Bid Amount pursuant to the Application Form by a
Bidder shall be deemed a valid, binding and irrevocable offer for such Bidder and becomes a binding contract on
a Successful Bidder upon issuance of the CAN and the Placement Document (when dispatched) by our Company
(by itself or through the BRLM) in favour of the Successful Bidder.
Submission of Application Form
All Application Forms must be duly completed with information including the number of Equity Shares applied
for along with proof of payment and a copy of the PAN card or PAN allotment letter (as applicable). The Bid
Amount shall be deposited in the Escrow Account as is specified in the Application Form and the Application
Form shall be submitted to the BRLM either through electronic form or through physical delivery at either of the
following addresses:
160
Name Address Contact Person Website and Email Phone (Telephone)
J.P. Morgan India
Private Limited
J.P. Morgan Tower, Off CST
Road, Kalina, Santacruz East,
Mumbai 400 098
Shagun Gupta www.jpmipl.com and
investorsmb.jpmipl@j
pmorgan.com
+91 22 6157 3000
The BRLM shall not be required to provide any written acknowledgement of the receipt of the Application Form
and the Bid Amount.
Bidders Bidding in the Issue shall pay the entire Bid Amount along with the submission of the Application Form,
within the Issue Period.
Payment of Bid Amount
Our Company has opened the Escrow Account in the name of “Zydus Wellness Limited – Escrow Account -
Equity share issue FY 2020-21” with the Escrow Agent, in terms of the Escrow Agreement. Each Bidder will
be required to deposit the Bid Amount payable for the Equity Shares Bid by it along with the submission of the
Application Form and during the Bidding Period. Bidders can make payment of the Bid Amount only through
electronic transfer of funds from their own bank account.
Note: Payments are to be made only through electronic fund transfer. Payments made through cash,
demand draft or cheques are liable to be rejected. Further, if the payment is not made favouring the Escrow
Account, the Application Form is liable to be rejected.
Pending Allotment, our Company undertakes to utilise the amount deposited in “Zydus Wellness Limited –
Escrow Account - Equity share issue FY 2020-21” only for the purposes of (i) adjustment against Allotment of
Equity Shares in the Issue; or (ii) repayment of Bid Amount if our Company is not able to Allot Equity Shares in
the Issue.
Pricing and Allocation
There is a minimum pricing requirement under the SEBI ICDR Regulations. The Floor Price shall not be less than
the average of the weekly high and low of the closing prices of the Equity Shares quoted on the stock exchange
during the two weeks preceding the Relevant Date. However, our Company may offer a discount of not more than
5% of the Floor Price in accordance with the approval of our Shareholders, accorded through their special
resolution passed through a special resolution at our extra-ordinary general meeting on September 19, 2020 and
in terms of Regulation 176(1) of the SEBI ICDR Regulations.
Our Company, in consultation with the BRLM, shall determine the Issue Price, which shall be at or above the
Floor Price.
The “Relevant Date” referred to above will be the date of the meeting in which the Board (or a duly constituted
committee thereof) decides to open the Issue and “stock exchange” means any of the recognized stock exchanges
in India on which the Equity Shares are listed and on which the highest trading volume in such Equity Shares has
been recorded during the two weeks immediately preceding the Relevant Date. After finalisation of the Issue
Price, our Company shall update this Preliminary Placement Document with the Issue details and file the
Placement Document with the Stock Exchanges.
Build-up of the Book
The Eligible QIBs shall submit their Bids (including any revision thereof) through the Application Forms within
the Issue Period to the BRLM. Such Bids cannot be withdrawn or revised downwards after the Bid/ Issue Closing
Date. The book shall be maintained by the BRLM.
Method of Allocation
Our Company shall determine the Allocation in consultation with the BRLM on a discretionary basis and in
compliance with Chapter VI of the SEBI ICDR Regulations.
The Preliminary Placement Document is only directed at, and will only be provided to, persons to whom interests
may lawfully be promoted pursuant to section 21 of the Financial Services and Markets Act 2000 (the “FSMA”).
In particular, the Preliminary Placement Document is only directed at, and will only be provided to, investment
professionals (“Relevant Persons”) within the meaning of article 19 of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (“FPO”). Any investment or investment activity to which the Preliminary
Placement Document relates is available only to Relevant Persons and dealings hereunder will be made only with
Relevant Persons. Persons who are not investment professionals within the meaning of article 19 of the FPO
should not rely on the Preliminary Placement Document.
The Preliminary Placement Document has not been delivered for approval to the United Kingdom Financial
Conduct Authority in the United Kingdom or to an authorized person within the meaning of the FSMA. No
approved prospectus within the meaning of section 85 of the FSMA or of the Prospectus Regulation has been
published or is intended to be published in relation to the Offer. The Preliminary Placement Document does not
constitute a prospectus for the purposes of the FSMA or the Prospectus Regulation.
169
THE SECURITIES MARKET OF INDIA
The information in this section has been extracted from documents available on the website of SEBI and the Stock
Exchanges and has not been prepared or independently verified by our Company, the BRLM or any of their
respective affiliates or advisors.
The Indian Securities Market
India has a long history of organised securities trading. In 1875, the first stock exchange was established in
Mumbai. The BSE and the NSE together hold a dominant position among the stock exchanges in terms of the
number of listed companies, market capitalisation and trading activity.
Stock Exchanges Regulation
Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the Ministry
of Finance, Capital Markets Division, under the SCRA and the SCRR. On October 3, 2018, SEBI, in exercise of
its powers under the SCRA and the SEBI Act, notified the Securities Contracts (Regulation) (Stock Exchanges
and Clearing Corporations) Regulations, 2018 (the “SECC Regulations”), which regulate inter alia the
recognition, ownership and internal governance of stock exchanges and clearing corporations in India together
with providing for minimum net worth requirements for stock exchanges. The SCRA, the SCRR and the SECC
Regulations along with various rules, bye-laws and regulations of the respective stock exchanges, regulate the
recognition of stock exchanges, the qualifications for membership thereof and the manner, in which contracts are
entered into, settled and enforced between members of the stock exchanges.
The SEBI Act empowers SEBI to regulate the Indian securities markets, including stock exchanges and
intermediaries in the capital markets, promote and monitor self-regulatory organisations and prohibit fraudulent
and unfair trade practices. Regulations and guidelines concerning minimum disclosure requirements by public
companies, rules and regulations concerning investor protection, insider trading, substantial acquisitions of shares
and takeover of companies, buy-backs of securities, employee stock option schemes, stockbrokers, merchant
bankers, underwriters, mutual funds, foreign portfolio investors, credit rating agencies and other capital market
participants have been notified by the relevant regulatory authority.
Listing and delisting of Securities
The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws including
the Companies Act, the SCRA, the SCRR, the SEBI Act, and various guidelines and regulations issued by SEBI
including the SEBI ICDR Regulations SEBI Listing Regulations. The SCRA empowers the governing body of
each recognised stock exchange to suspend trading of or withdraw admission to dealings in a listed security for
breach of or non-compliance with any conditions or breach of company’s obligations under the SEBI Listing
Regulations or for any reason, subject to the issuer receiving prior written notice of the intent of the exchange and
upon granting of a hearing in the matter. SEBI also has the power to amend the SEBI Listing Regulations and
bye-laws of the stock exchanges in India, to overrule a stock exchange’s governing body and withdraw recognition
of a recognized stock exchange.
SEBI has notified the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, to
govern the voluntary and compulsory delisting of equity shares from the stock exchanges which were significantly
modified in 2015. In addition, certain amendments to the SCRR have also been notified in relation to delisting.
Minimum Level of Public Shareholding
All listed companies (except public sector undertakings) are required to maintain a minimum public shareholding
at 25%. In this regard, SEBI has provided several mechanisms to comply with this requirement. Further, where
the public shareholding in a listed company falls below 25% (except public sector undertakings) at any time, such
company is required to bring the public shareholding to 25% within a maximum period of 12 months from the
date of such fall. Consequently, a listed company may be delisted from the stock exchanges for not complying
with the above-mentioned requirement. Our Company is in compliance with this minimum public shareholding
requirement.
170
Index-Based Market-Wide Circuit Breaker System
In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to
apply daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index-
based market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index
movement, at 10%, 15% and 20%. The stock exchanges on a daily basis translate the circuit breaker limits based
on previous day’s closing level of the index. These circuit breakers, when triggered, bring about a co-ordinated
trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered
by movement of either the SENSEX of the BSE or the S&P CNX NIFTY of the NSE, whichever is breached
earlier.
In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise
circuit breakers. However, no price bands are applicable on scrips on which derivative products are available or
scrips included in indices on which derivative products are available.
The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility.
Margin requirements are imposed by stock exchanges that are required to be paid by the stockbrokers.
BSE
BSE is one of the stock exchanges in India on which our Equity Shares are listed. Established in 1875, it is the
oldest stock exchange in India. In 1956, it became the first stock exchange in India to obtain permanent recognition
from the Government under the SCRA. Pursuant to the BSE (Corporatization and Demutualization) Scheme 2005
of SEBI, with effect from August 19, 2005, BSE was incorporated as a company under the Companies Act, 1956.
BSE was listed on NSE with effect from February 3, 2017. It has evolved over the years into its present status as
one of the premier stock exchanges of India.
NSE
The NSE was established by financial institutions and banks to provide nationwide online, satellite-linked, screen-
based trading facilities with market-makers and electronic clearing and settlement for securities including
government securities, debentures, public sector bonds and units. Deliveries for trades executed “on- market” are
exchanged through the National Securities Clearing Corporation Limited. It has evolved over the years into its
present status as one of the premier stock exchanges of India. The NSE was recognised as a stock exchange under
the SCRA in April 1993 and commenced operations in the wholesale debt market segment in June 1994. The
capital market (equities) segment commenced operations in November 1994 and operations in the derivatives
segment commenced in June 2000. NSE launched the NSE 50 Index, now known as S&P CNX NIFTY, on April
22, 1996 and the Mid-cap Index on January 1, 1996.
Internet-based Securities Trading and Services
Internet trading takes place through order routing systems, which route client orders to exchange trading systems
for execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant
stock exchange and also have to comply with certain minimum conditions stipulated by SEBI. The NSE became
the first exchange to grant approval to its members for providing internet-based trading services. Internet trading
is possible on both the “equities” as well as the “derivatives” segments of the NSE.
Trading Hours
Trading on both the NSE and the BSE occurs from Monday to Friday, between 9:15 a.m. and 3:30 p.m. IST
(excluding the 15 minutes pre-open session from 9:00 a.m. to 9:15 a.m.). The BSE and the NSE are closed on
public holidays. The recognised stock exchanges have been permitted to set their own trading hours (in the cash
and derivatives segments) subject to the condition that (i) the trading hours are between 9.00 a.m. and 5.00 p.m.;
and (ii) the stock exchange has in place a risk management system and infrastructure commensurate to the trading
hours.
Trading Procedure
In order to facilitate smooth transactions, the BSE replaced its open outcry system with BSE On-line Trading
(“BOLT”) facility in 1995. This totally automated screen based trading in securities was put into practice nation-
171
wide. This has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles
and improving efficiency in back-office work. In the year 2014, BSE introduced its new generation trading
platform, BOLT Plus
NSE has introduced a fully automated trading system called National Exchange for Automated Trading
(“NEAT”), which operates on strict time/price priority besides enabling efficient trade. NEAT has provided depth
in the market by enabling large number of members all over India to trade simultaneously, narrowing the spreads.
SEBI Listing Regulations
Public listed companies are required under the SEBI Listing Regulations to prepare and circulate to their
shareholders audited annual accounts which comply with the disclosure requirements and regulations governing
their manner of presentation and which include sections relating to corporate governance, related party
transactions and management’s discussion and analysis as required under the SEBI Listing Regulations. In
addition, a listed company is subject to, inter alia, continuing disclosure requirements pursuant to the terms of the
SEBI Listing Regulations.
SEBI Takeover Regulations
Disclosure and mandatory bid obligations for listed Indian companies are governed by the SEBI Takeover
Regulations which provide specific regulations in relation to substantial acquisition of shares and takeover. Once
the equity shares of a company are listed on a stock exchange in India, the provisions of the SEBI Takeover
Regulations will apply to any acquisition of the company’s shares/voting rights/control. The SEBI Takeover
Regulations prescribe certain thresholds or trigger points in the shareholding a person or entity has in the listed
Indian company, which give rise to certain obligations on part of the acquirer. Acquisitions up to a certain
threshold prescribed under the SEBI Takeover Regulations mandate specific disclosure requirements, while
acquisitions crossing particular thresholds may result in the acquirer having to make an open offer of the shares
of the target company. The SEBI Takeover Regulations also provide for the possibility of indirect acquisitions,
imposing specific obligations on the acquirer in case of such indirect acquisition.
SEBI Insider Trading Regulations
The SEBI Insider Trading Regulations have been notified to prohibit and penalise insider trading in India. An
insider is, among other things, prohibited from dealing in the securities of a listed company when in possession
of unpublished price sensitive information (“UPSI”).
The SEBI Insider Trading Regulations were notified on January 15, 2015 and came into effect on May 15, 2015,
which repealed the erstwhile regulations of 1992. The SEBI Insider Trading Regulations, inter alia, impose certain
restrictions on the communication of information by listed companies. Under the SEBI Insider Trading
Regulations, (i) no insider shall communicate, provide or allow access to any UPSI relating to such companies
and securities listed or proposed to be listed, to any person including other insiders; and (ii) no person shall procure
or cause the communication by any insider of UPSI relating to such companies and securities listed or proposed
to be listed, except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
However, UPSI may be communicated, provided or allowed access to or procured, under certain circumstances
specified in the SEBI Insider Trading Regulations.
The SEBI Insider Trading Regulations make it compulsory for listed companies and certain other entities that are
required to handle UPSI in the course of business operations to establish an internal code of practices and
procedures for fair disclosure of UPSI and to regulate, monitor and report trading by insiders. To this end, the
SEBI Insider Trading Regulations provide principles of fair disclosure for purposes of code of practices and
procedures for fair disclosure of UPSI and minimum standards for code of conduct to regulate, monitor and report
trading by insiders. There are also initial and continuing shareholding disclosure obligations under the SEBI
Insider Trading Regulations.
The SEBI Insider Trading Regulations also provides for disclosure obligations for promoters, members of the
promoter group, designated person or director in case value of trade exceed monetary threshold of `10 lakh over
a calendar quarter, within two days of reaching such threshold. The board of directors of all listed companies are
required to formulate and publish on the company’s website a code of procedure for fair disclosure of UPSI along
with a code of conduct for its employees for compliances with the SEBI Insider Trading Regulations.
172
Depositories
The Depositories Act provides a legal framework for the establishment of depositories to record ownership details
and effect transfer in book-entry form. Further, SEBI framed regulations in relation to the formation and
registration of such depositories, the registration of participants as well as the rights and obligations of the
depositories, participants, companies and beneficial owners. The depository system has significantly improved
the operation of the Indian securities markets.
Derivatives (Futures and Options)
Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in
February 2000 and derivatives contracts were included within the term “securities”, as defined by the SCRA.
Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a
separate segment of an existing stock exchange. The derivatives exchange or derivatives segment of a stock
exchange functions as a self-regulatory organisation under the supervision of SEBI.
173
DESCRIPTION OF THE EQUITY SHARES
The following is information relating to the Equity Shares including a brief summary of the Memorandum and
Articles of Association and the Companies Act. Bidders are urged to read the Memorandum and Articles of
Association carefully, and consult with their advisers, as the Memorandum and Articles of Association and
applicable Indian law, and not this summary, govern the rights attached to the Equity Shares.
Share capital
The authorized share capital of our Company is `100,00,00,000 divided into 10,00,00,000 Equity Shares of `10
each. For further details, see “Capital Structure” beginning on page 64.
Dividends
Under Indian law, a company pays dividends upon a recommendation by its Board of Directors and approval by
a majority of the shareholders at the AGM held each Fiscal. Subject to certain conditions laid down by Section 123
of the Companies Act, no dividend can be declared or paid by a company for any Fiscal except out of the profits
of the company for that year, calculated in accordance with the provisions of the Companies Act or out of the
profits of the company for any previous Fiscal(s) arrived at as laid down by the Companies Act and remaining
undistributed or out of both or out of money provided by the Central Government or a State Government for the
payment of dividend by the company in pursuance of a guarantee given by that Government.
Further, as per the Companies Act, read with the Companies (Declaration and Payment of Dividend) Rules, 2014,
in the inadequacy or absence of profits in any year, a company may declare dividend out of the accumulated
profits earned in previous years and transferred to the free reserves, provided: (a) the rate of dividend declared
shall not exceed the average of the rates at which dividend was declared by it in the three years immediately
preceding that year; provided, this rule shall not apply to a company, which has not declared any dividend in each
of the three preceding financial years (b) the total amount to be drawn from such accumulated profits shall not
exceed one-tenth of the sum of the paid-up share capital of our Company and free reserves as per the most recent
audited financial statement; (c) the amount so drawn shall be first utilised to set off the losses incurred by our
Company in the financial year in which the dividend is declared before any dividend in respect of equity shares
is declared; and (d) the balance of reserves of our Company after such withdrawal shall not fall below 15% of the
Company’s paid-up share capital as per the most recent audited financial statement of the company.
Unclaimed and unpaid dividend shall not be forfeited by our Company unless the claim thereof becomes barred
by law. Subject to applicable provisions of the Companies Act, if our Company has declared a dividend but which
has not been paid or claimed or dividend warrant or such other instrument has not been posted within 30 days
from the date of declaration to any member entitled to the payment of the dividend, our Company shall within
seven days from the date of the expiry of the aforesaid 30 days period transfer the total amount of dividend which
remains unpaid or unclaimed to a special bank account to be opened in that behalf in any scheduled bank called
“Unpaid Dividend of Zydus Wellness Limited” or such other name as the Board of Directors may decide and
transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend
warrant has been posted.
Capitalisation of profits and issue of bonus shares
In addition to permitting dividends to be paid out of current or retained earnings as described above, the
Companies Act permits the Board of Directors of a company subject to approval of shareholders in a general
meeting to issue fully paid-up bonus shares to its members out of (a) the free reserves of the company (b) the
securities premium account, or (c) the capital redemption reserve account. However, a company may capitalize
its profits or reserves for issue of fully paid-up bonus shares, provided: (a) it is authorised by articles, (b) it has
been, on the recommendation of the Board of Directors, been authorised by the shareholders in a general meeting,
(c) it has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by
it, (d) it has not defaulted on payment of statutory dues such as contribution to provident fund, gratuity and
bonus(e) there are no partly paid-up shares. The issue of bonus shares once declared cannot be withdrawn.
These bonus shares must be distributed to shareholders in proportion to the number of equity shares owned by
them as recommended by the Board of Directors. No issue of bonus shares may be made by capitalising reserves
created by revaluation of assets, and no bonus shares shall be issued in lieu of dividend. Further, any issue of
bonus shares would be subject to the SEBI ICDR Regulations.
174
Our Company may by a resolution passed in a general meeting of the shareholders, upon a recommendation by
the Board, resolve to capitalise whole or any part of the amount for the time being standing to the credit of any of
our Company’s reserve accounts or to the credit of the profit and loss account or otherwise available for
distribution and distribute amongst such of the shareholders as would be entitled to receive the same if distributed
by way of dividend and in the same proportions and that all or any part of such capitalized fund shall be applied
on behalf of such shareholders in paying up any amounts for the time being unpaid on any Equity Shares held by
such Shareholders and/or in paying up in full, unissued shares of our Company to be allotted and distributed,
credited as fully paid-up in the proportion aforesaid, provided that a securities premium account and a capital
redemption reserve fund may, for the purposes of the Article, be applied in the paying of any unissued shares to
be issued to members of our Company as fully paid bonus shares.
Pre-emptive rights and alteration of share capital
Subject to the provisions of the Companies Act, our Company may increase its share capital by issuing new shares
on such terms and with such rights as it, by action of its shareholders in a general meeting may determine. The
Board is entitled to make private placement and preferential issue of Equity Shares, debentures, preference shares
or any other instruments to such class of persons as the Board may deem fit which would be convertible or
exchanged with Equity Shares, at a later date or such other securities as may be permissible to be issued by our
Company under any law from time to time. According to the Articles of Association, the Company or Zydus
Wellness Products Limited shall not issue any Equity Shares or other securities/instruments convertible into
Equity Shares with more favourable rights than those provided to True North Fund V LLP and True North Fund
VI LLP (together, the “Investor”). If the Company issues Equity Shares or other securities/instruments
convertible into Equity Shares to any person, with more favourable rights to any new shareholder, then all such
favourable terms offered in connection with such issuance shall also be made available to the Investor.
According to Section 62(1)(a) of the Companies Act such new shares shall be offered to existing shareholders in
proportion to the amount paid-up on those shares at that date. The offer shall be made by notice specifying the
number of shares offered and the date (being not less than 15 days and not exceeding 30 days from the date of the
offer) within which the offer, if not accepted, will be deemed to have been declined. After such date, the board
may dispose of the shares offered in respect of which no acceptance has been received which shall not be
disadvantageous to the Shareholders. The offer is deemed to include a right exercisable by the person concerned
to renounce the shares offered to him in favour of any other person.
Under the provisions of Section 62(1)(c) of the Companies Act, new shares may be offered to any persons whether
or not those persons include existing shareholders, either for cash or for a consideration other than cash, if the
price of such shares is determined by the valuation report of a registered valuer subject to such conditions as may
be prescribed, if a special resolution to that effect is passed by our shareholders in a general meeting.
The Articles of Association authorises our Board to increase our authorised capital by issuing new shares
consisting of equity and/or preference shares, as our Company may determine in a general meeting. The Articles
of Association provide that our Company, subject to compliance with requirements under the Companies Act and
the rules thereto, or any other applicable law in force in the general meeting, from time to time, may consolidate,
divide or sub-divide or cancel its share capital.
General meetings of shareholders
There are two types of general meetings of the shareholders, namely, AGM and EGM. Our Company must hold
its AGM in each Fiscal year provided that not more than 15 months shall elapse between each AGM, unless
extended by RoC at its request for any special reason for a period not exceeding three months. Our Board of
Directors may convene an EGM when necessary or at the request of a shareholder or shareholders holding in the
aggregate not less than one tenth of our Company’s issued paid-up capital carrying a right to vote on such date.
Notices, along with statement containing material facts concerning each special item, either in writing or through
electronic mode, convening a meeting setting out the date, day, hour, place and agenda of the meeting must be
given to every member or the legal representative of a deceased member, auditors of the company and every
director of the company, at least 21 clear days prior to the date of the proposed meeting. A general meeting may
be called after giving shorter notice if consent is received, in writing or electronic mode, from not less than 95%
of the shareholders entitled to vote. Unless, the Articles of Association provide for a larger number, (i) five
shareholders present in person, if the number of shareholders as on the date of meeting is not more than 1,000;
(ii) 15 shareholders present in person, if the number of shareholders as on the date of the meeting is more than
175
1,000 but up to 5,000; and (iii) 30 shareholders present in person, if the number of shareholders as on the date of
meeting exceeds 5,000, shall constitute a quorum for a general meeting of our Company, whether AGM or EGM.
The quorum requirements applicable to shareholder meetings under the Companies Act have to be physically
complied with.
In accordance with Section 110 of the Companies Act, a company intending to pass a resolution relating to matters
such as, but not limited to, amendments to the objects clause of the Memorandum, a variation of the rights attached
to a class of shares or debentures or other securities, buy-backs of shares, giving loans or extending guarantees in
excess of limits prescribed, is required to obtain the resolution passed by means of a postal ballot instead of
transacting the business in our Company’s general meeting. A notice to all the shareholders shall be sent along
with a draft resolution explaining the reasons thereof and requesting them to send their assent or dissent in writing
on a postal ballot within a period of 30 days from the date of posting the notice. Postal ballot includes voting by
electronic mode.
Voting rights
At a general meeting, every member holding shares is entitled to vote through e-voting process and has one vote.
Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy is in the same
proportion as the shall be as provided under the Companies Act and rules framed thereunder. The Chairman of
the meeting has a casting vote or second vote.
Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require
that the votes cast in favour of the resolution must be at least three times the votes cast against the resolution. A
shareholder may exercise his voting rights by proxy to be given in the form required by the Articles of Association.
The instrument appointing a proxy is required to be lodged with our Company at least 48 hours before the time of
the meeting. A proxy may not vote except on a poll and does not have a right to speak at meetings. No proxy shall
be entitled to vote on a show of hands unless such proxy is present on behalf of a company or corporation.
Registration of transfers and register of members
Our Company is required to maintain a register of members wherein the particulars of the members of our
Company are entered. We recognize as shareholders only those persons whose names appear on the register of
shareholders and cannot recognize any person holding any share or part of it upon any express, implied or
constructive trust, except as permitted by law. In respect of electronic transfers, the depository transfers shares by
entering the name of the purchaser in its books as the beneficial owner of the shares. In turn, the name of the
depository is entered into our records as the registered owner of the shares. The beneficial owner is entitled to all
the rights and benefits as well as the liabilities with respect to the shares held by a depository.
For the purpose of determining the shareholders, entitled to corporate benefits declared by our Company, the
register may be closed for such period not exceeding 45 days in any one year or 30 days at any one time at such
times, as the Board of Directors may deem expedient in accordance with the provisions of the Companies Act.
Under the SEBI Listing Regulations of the stock exchanges on which our Company’s outstanding Equity Shares
are listed, our Company may, upon at least seven working days’ (excluding the date of intimation and the record
date) advance notice to such stock exchanges, set a record date and/or close the register of shareholders in order
to ascertain the identity of shareholders. The trading of Equity Shares and the delivery of certificates in respect
thereof may continue while the register of shareholders is closed.
Transfer of shares
Shares held through depositories are transferred in the form of book entries or in electronic form in accordance
with the regulations laid down by the SEBI. These provisions provide the regime for the functioning of the
depositories and the participants and set out in the manner in which the records are to be kept and maintained and
the safeguards to be followed in this system. We have entered into an agreement for such depository services with
NSDL and CDSL. SEBI requires that our shares for trading and settlement purposes be in book-entry form for all
investors, except for transactions that are not made on a stock exchange and transactions that are not required to
be reported to the stock exchange. The registrar and transfer agent shall keep a book in which every transfer or
transmission of shares will be entered. In addition to complying with the Companies Act, 2013 and the other
applicable laws, our Company is also required to comply with the provisions of the SEBI Listing Regulations for
effecting the transfer of shares. In terms of the SEBI Listing Regulations, except in case of transmission or
transposition of shares, requests for effecting transfer of shares shall not be processed unless the shares are held
176
in the dematerialized form with a depository. The Equity Shares shall be freely transferable, subject to applicable
laws.
Directors
The Articles provide that the number of Directors shall not be less than three and not be more than fifteen. The
Directors shall be appointed by our Company in the general meeting subject to the provisions of the Companies
Act and the Articles. Two-thirds of the total number of Directors is subject to retirement by rotation. Of such
Directors, one-third, or if their number is not three or multiples of three, then the number nearest to one-third,
must retire every year. The Directors to retire are those who have been the longest in office.
As provided under Section 161 of the Companies Act, 2013, the Director may be appointed by the Board or by
the general meeting of the Shareholders. The Directors have the power to appoint any other persons as an
additional Director but any Director so appointed shall hold office only up to the date of the next following AGM
of our Company but the total number of Directors shall not at any time exceed the maximum strength. The Board
shall also have the power to appoint any person to act as an alternate Director for a Director during the latter’s
absence for a period of not less than three months from India. The alternate Director shall vacate the office if and
when the original Director returns to India and in case the office of the original Director is determined before he
returns, the provisions of the Companies Act, 2013, and the Articles for automatic reappointment shall apply to
the original Director and not the alternate Director.
In terms of the Articles of Association, the Investor is entitled to nominate one director on the Board of the
Directors of the Company as its nominee and such right of the Investor shall continue until the Investor holds at
least 10% of the equity share capital of the Company (on a fully diluted basis). Such director on the Board of
Directors nominated by the Investor shall be referred to as the ‘Investor Nominee Director’ and shall be a non-
executive Director who shall not be liable to retire by rotation. The Investor Nominee Director shall also have the
right to be a voting member of the audit committee and the nomination and remuneration committee, and such
other key committees as may be constituted by the Board of Directors from time to time, with respect to financial,
business-related, strategic and regulatory matters (together, the “Identified Committees”). Additionally, the
Investor also has the right to appoint one director on the Board of our subsidiary, Zydus Wellness Products Limited
and all such rights and obligations of the Investor Nominee Director with regard to the Company also apply to
such director on the board of Zydus Wellness Products Limited.
In case the Investor does not appoint any person as the Investor Nominee Director, the Investor shall have the
right to appoint one representative as its observer on the Board of the Company. The observer, so appointed, shall
have the right to attend each meeting of the Board and each of the Identified Committees (whether in person, by
telephone, via videoconference or otherwise), in a non-voting, non-participative observer capacity.
The Articles of Association also provide that as long as any money is owed by the Company to any financial
institution or to any other finance corporation or credit corporation or to any other financing company or body or
any bank (“Financing Entity”) for any loans granted by such Financing Entity to the Company or so long as any
such Financing Entity hold (a) debentures of the Company by direct subscription or private placement, or hold
Equity Shares of the Company as a result of underwriting or direct subscription or so long as any liability of the
Company arising out of any guarantee furnished by any such Financing Entity, on behalf of the Company, is
outstanding, such Financing Entity shall have a right to appoint any person or persons as a director on the Board
of the Company.
Liquidation rights
In the event of our winding up, if the assets available for distribution among the members as such shall be
insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that as nearly as may be,
the losses shall be borne by the members in proportion to the capital paid-up, or which ought to have been paid-
up, at the commencement of the winding up, on the shares held by them respectively. And if in a winding up the
assets available for distribution among the members shall be more than sufficient to repay the whole of the capital
paid-up at the commencement of the winding up, the excess shall be distributed amongst the members in
proportion to the capital, at the commencement of the winding up, paid-up or which ought to have been paid-up
on the shares held by them. On winding up, any preference shares issued by our Company, shall rank in priority
to Equity Shares but shall not be entitled to any further participation in profits or assets.
177
Buy back
Our Company may buy back its own Equity Shares or other specified securities subject to the provisions of the
Companies Act, 2013 and the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018
issued in connection therewith.
178
STATEMENT OF SPECIAL TAX BENEFITS
To,
The Board of Directors
Zydus Wellness Limited
Zydus Corporate Park, Scheme No. 63,
Survey No.536, Khoraj (Gandhinagar),
Near Vaishnodevi Circle,
Ahmedabad 382481
Dear Sirs,
Sub: Qualified institutions placement of equity shares of face value ₹ 10 each (“Equity Shares”) (such
placement, the “Issue”) by Zydus Wellness Limited (the “Company”)
1. The accompanying Special and Possible Tax Statement in relation to the Company and its Shareholders
(hereinafter referred to as the “Statement”) under the Income Tax Act, 1961 (read with Income Tax Rules,
circulars, notifications) as amended by the Finance Act, 2020 (hereinafter referred to as the “Income Tax
Regulations”) presently in force in India. has been prepared by the management of the Company in
connection with the proposed Issue, which we have initialed for identification purposes.
Management’s Responsibility
2. The preparation of this Statement as of the date of our report which is to be included in the Preliminary
Placement Document and the Placement Document is the responsibility of the management for the purpose
set out in paragraph 9 below.
3. The management’s responsibility includes designing, implementing and maintaining internal control
relevant to the preparation and presentation of the Statement, and applying an appropriate basis of
preparation; and making estimates that are reasonable in the circumstances. The Management is also
responsible for identifying and ensuring that the Company complies with the laws and regulations applicable
to its activities.
Auditor’s Responsibility
4. Our work has been carried out in accordance with Standards on Auditing, the ‘Guidance Note on Reports or
Certificates for Special Purposes (Revised 2016)’ and other applicable authoritative pronouncements issued
by the Institute of Chartered Accountants of India.
5. Pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations 2018, as amended (the “SEBI ICDR Regulations”) and the Companies Act 2013, as amended
(“Act”), it is our responsibility to report whether the Statement prepared by the Company, presents, in all
material respects, the possible special tax benefits available as of September 23, 2020 to the Company and
the shareholders of the Company, in accordance with the Income Tax Regulations as at the date of our report.
6. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance
with the Act and the SEBI ICDR Regulations in connection with the proposed Issue.
7. Our confirmation is based on the information, explanations and representations obtained from the Company
and on the basis of our understanding of the business activities and operations of the Company.
179
Inherent Limitations
8. We draw attention to the fact that the Statement includes certain inherent limitations that can influence the
reliability of the information.
9. Several of the benefits mentioned in the accompanying statement are dependent on the Company or its
shareholders or material subsidiaries fulfilling the conditions prescribed under the relevant provisions of the
tax laws. Hence, the ability of the Company or its shareholders or material subsidiaries to derive the tax
benefits is dependent upon fulfilling such conditions, which may or may not be fulfilled. The benefits
discussed in the accompanying statement are not exhaustive.
10. The Statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax
consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant
with respect to the specific tax implications arising out of their participation in the proposed offer of qualified
institutions placement for sale of equity shares by the Company. Neither are we suggesting nor are we
advising the investor to invest money based on this Annexure.
11. Our views are based on the existing provisions of law and its interpretation, which are subject to change
from time to time. We do not assume responsibility to update the views consequent to such changes.
Opinion
12. In our opinion, the Statement prepared by the Company presents, in all material respects, the possible special
tax benefits available as of September 23, 2020, to the Company and its shareholders and material
subsidiaries, in accordance with the Income Tax Regulations as at the date of our report.
Considering the matter referred to in paragraph 5 above, we are unable to express any opinion or provide
any assurance as to whether:
(i) The Company or its shareholders will continue to obtain the benefits per the Statement in future; or
(ii) The conditions prescribed for availing the benefits per the Statement have been/ would be met with;
or
(iii) The revenue authorities/courts will concur with the views expressed herein.
Restriction on Use
13. We hereby confirm that the aforesaid information is true, complete and not misleading. This report is
addressed to and is provided to enable the Board of Directors of the Company to include this report in the
Preliminary Placement Document and the Placement Document (together, the “Placement Documents”),
prepared in connection with the Issue to be filed by the Company with the concerned stock exchanges on
which the Equity Shares of the Company are listed (the “Stock Exchanges”), and the Registrar of
Companies, Gujarat at Ahmedabad, and any other authority and such other documents as may be prepared
in connection with the Issue.
14. The aforesaid information may be relied upon by the BRLMs and legal counsels appointed pursuant to the
Issue and may be submitted to the Stock Exchanges, the Securities and Exchange Board of India, and any
other regulatory or statutory authority in respect of the Issue. The BRLMs may also rely on the information
contained herein for the purpose of conducting due-diligence and maintaining records by the BRLMs in
connection with the Issue and for any defense, the BRLMs may advance in any claim or proceeding or any
other matter in connection with the contents of the Placement Documents.
180
15. We undertake to immediately inform the BRLMs and legal counsels in case of any changes to the above
until the date when the Equity Shares pursuant to the Issue commence trading on the Stock Exchanges. In
the absence of any such communication, you may assume that there is no change in respect of the matters
covered in this certificate.
For M/s. Mukesh M. Shah & Co.
Chartered Accountants
Firm Registration No. 106625W
Chandresh S. Shah
Partner
Membership Number: 042132
Ahmedabad
Date: September 23, 2020
UDIN: 20042132AAAAZF4353
181
ANNEXURE 1
Statement of possible tax benefits available to Zydus Wellness Limited and its shareholders under the
income-tax act, 1961 (‘the act’)
A. TAX BENEFITS AVAILABLE TO THE COMPANY
I POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY
1. Deductions from Gross Total Income
Deduction in respect of employment of new employees:
Subject to the fulfilment of prescribed conditions, the Company is entitled to claim deduction of an
amount equal to thirty per cent of additional employee cost (relating to specified category of employees)
incurred in the course of business in the previous year, for three assessment years including the
assessment year relevant to the previous year in which such employment is provided under section
80JJAA of the Act.
Deduction in respect of donation to certain funds, charitable institution, etc
Donations made by the company towards certain specified funds and charitable institution as prescribed
under section 80G of the Act shall be eligible for 100%/50% deduction subject to the conditions as
prescribed.
Section 80M: Deduction on inter-corporate dividends
The Dividend Distribution Tax (DDT) applicable to Companies on declaration of dividend has been
deleted by the Finance Act 2020 with effect from 1st April 2020. Dividend income shall be taxable in the
hands of shareholders with effect from AY 2021-22.
The Finance Act, 2020 has inserted section 80M effective 1st April 2020 to eliminate the cascading tax
effect in case of inter-corporate dividends by providing a deduction in respect of dividends received by
a domestic company, to the extent such dividend is distributed by it on or before the due date. In this
case, due date means one month prior to the date for furnishing the return of income under sub -section
(1) of section 139 of the Act.
B. TAX BENEFITS AVAILABLE TO THE SHAREHOLDER OF THE COMPANY
The shareholders of the Company are not entitled to any special tax benefits under the Act.
Dividend taxation in case of Non-resident Shareholders:
The dividend income will be subject to tax in the hands of the non-residents at the rate of 20% (plus
applicable surcharge and cess) as per the provisions of section 115AD (for FPI’s) and section 115A (other
non-residents) of the Act. The shareholder may choose to be governed by the provisions of Double Taxation
Avoidance Agreement, to the extent they are more beneficial subject to fulfillment of certain conditions.
The Company is required to withhold taxes while remitting dividend to non-resident shareholders at the rate
of 20% or the rate prescribed under the Double Taxation Avoidance Agreement, whichever is more
beneficial to the shareholder.
182
Notes:
1. These special tax benefits are dependent on the Company or its shareholders or material subsidiaries
fulfilling the conditions prescribed under the relevant provisions of the Act. Hence, the ability of the
Company or its shareholders or material subsidiaries to derive the tax benefits is dependent upon
fulfilling such conditions, which based on the business imperatives, the Company or its shareholders or
material subsidiaries may or may not choose to fulfil.
2. As per section 115BAA of the Act, the Company has an option to pay income tax in respect of its total
income at a concessional tax rate of 25.168% (including applicable surcharge and cess) subject to
satisfaction of certain conditions with effect from Financial Year 2019-20 (i.e. Assessment Year 2020-
21). Such option once exercised shall apply to subsequent assessment years. In such a case, the Company
may not be allowed to claim any of the following deductions/exemptions:
i) Deduction under the provisions of section 10AA (deduction for units in Special Economic Zone
ii) Deduction under clause (iia) of sub-section (1) of section 32 (Additional depreciation)
iii) Deduction under section 32AD or section 33AB or section 33ABA (Investment allowance in
backward areas, Investment deposit account, site restoration fund)
iv) Deduction under sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-
section (2AA) or sub-section (2AB) of section 35 (Expenditure on scientific research)
v) Deduction under section 35AD or section 35CCC (Deduction for specified business, agricultural
extension project)
vi) Deduction under section 35CCD (Expenditure on skill development)
vii) Deduction under any provisions of Chapter VI-A other than the provisions of section 80JJAA or
Section 80M
viii) No set off of any loss carried forward or depreciation from any earlier assessment year, if such
loss or depreciation is attributable to any of the deductions referred from clause i) to vii) above
ix) No set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A, if
such loss or depreciation is attributable to any of the deductions referred from clause i) to vii)
above
Further, it was clarified by CBDT vide Circular No. 29/ 2019 dated 2 October 2019 that if the Company
opts for concessional income tax rate under section 115BAA, the provisions of section 115JB regarding
Minimum Alternate Tax (MAT) are not applicable. Further, such Company will not be entitled to claim
tax credit relating to MAT
3. The tax benefits discussed in the Statement are not exhaustive and is only intended to provide general
information to the investors and hence, is neither designed nor intended to be a substitute for professional
tax advice. In view of the individual nature of the tax consequences aid the changing tax laws, each
investor is advised to consult his or her own tax consultant with respect to the specific tax implications
arising out of their participation in the issue.
4. The Statement has been prepared on the basis that the shares of the Company are listed on a recognized
stock exchange in India and the Company will be issuing shares.
5. The Statement is prepared on the basis of information available with the Management of the Company
and there is no assurance that:
i. the Company or its shareholders or material subsidiaries will continue to obtain these benefits
in future;
ii. the conditions prescribed for availing the benefits have been/ would be met with; and
iii. the revenue authorities/courts will concur with the view expressed herein.
183
6. The above views are based on the existing provisions of law and its interpretation, which are subject to
change from time to time.
For Zydus Wellness Limited
Umesh Parikh
Chief Financial Officer
Place: Ahmedabad
Date: September 23, 2020
184
LEGAL PROCEEDINGS Our Company is involved in various legal proceedings from time to time, which involve matters pertaining to, amongst others, trademark infringement proceedings, criminal proceedings, civil proceedings, consumer disputes, regulatory proceedings under Legal Metrology Act, 2009 and Food Safety And Standards Act, 2006 and tax disputes, which are pending before various adjudicating fora. In terms of our Company’s “Policy for determination and disclosure of materiality an event or information” (“Materiality Policy”) framed in accordance with Regulation 30 of the SEBI Listing Regulations, there are no outstanding litigations involving our Company that have been disclosed to the Stock Exchanges. However, solely for the purpose of the Issue, our Company has disclosed in this section (i) all outstanding criminal proceedings against our Company and its Subsidiaries; (ii) all outstanding actions by statutory or regulatory authorities against our Company, its Subsidiaries, Promoters and Directors; (iii) outstanding civil and tax litigations involving our Company and its Subsidiaries, where the amount involved in such proceeding exceeds `708.60 lakhs (approximately 5% of the profit after tax of our Company based on the Consolidated Audited Financial Statements for the Fiscal 2020) (“Materiality Threshold”); and (iv) any other outstanding litigation involving our Company and its Subsidiaries wherein the amount involved cannot be determined or is below the Materiality Threshold, but an adverse outcome of which could materially and adversely affect the reputation, operations or financial position of our Company. Further, all outstanding litigations involving our Directors, an adverse outcome of which could materially and adversely affect the business or operations of our Company or the director’s ability to be on the Board, have been disclosed herein. It is clarified that for the purposes of the above, pre-litigation notices received by our Company from third parties (excluding show cause notices issued by statutory/regulatory/tax authorities) have not been disclosed in this Preliminary Placement Document unless our Company is impleaded as defendant or respondent in a litigation proceeding before any judicial fora or arbitral tribunal. Further, given the nature of our business, our Company and the Subsidiaries have received various notices and are involved in regulatory proceedings under the Prevention of Food Adulteration Act, 1955, Legal Metrology Act, 2009 and Food Safety And Standards Act, 2006 in their ordinary course of business and accordingly, we have included a consolidated disclosure for such cases. All terms defined in a particular litigation disclosure below are for that particular litigation only. Litigation involving our Company Litigations against our Company Civil Proceedings
1. One case is pending against our Company, in relation to, inter alia, alleged disparagement and/or restraint in
the use of intellectual property on the products being sold by our Company. The matter is currently pending
before the Madras High Court at Chennai.
Regulatory proceedings
1. Four cases are pending against our Company and/or some of our employees, in relation to, inter alia, alleged
adulteration and misbranding of packaging and labelling of food products, and consequent violation of the
applicable provisions of the Food Safety and Standards Act, 2006, as applicable, and the Food Safety and
Standard Rules, 2011, as applicable. These matters are pending at various stages of adjudication before
various adjudication forums. Litigations by our Company Civil Proceedings 1. Five cases have been filed by our Company against various parties, in relation to, inter alia, alleged
infringement and passing-off of our intellectual property on the products being sold by such parties. These matters are pending at various stages of adjudication before various adjudication forums.
185
Litigation involving our Subsidiaries Litigations against our Subsidiaries Civil Proceedings 1. Wipro Enterprises Limited (“Plaintiff”) filed a suit and an injunction application before the High Court of
Madras against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“ZWPL”) and others (“Defendants”) for alleged passing off in respect of one of our products, ‘GLUCON – D Volt’ on the basis that the Plaintiff is the absolute owner of the trademark ‘BOLTS’ which denotes its products exclusively. Our Company filed a written statement before the Court denying the allegations made by the Plaintiff and requesting the Court to dismiss the suit with appropriate orders. Subsequently, the Plaintiff and ZWPL entered into a joint memo of compromise, in January 2016, wherein ZWPL agreed to modify the label of its products to resolve the dispute amicably (“Memo of Compromise”). The Court passed a common order dated January 27, 2016, based on the Memo of Compromise, recording the compromise terms to be adhered to by the Plaintiff and our Company as an interim measure for a period of 90 days. The matter is currently pending.
2. Apart from (1) above, three cases are pending against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company), in relation to, inter alia, alleged disparagement and/or restraint in the use of intellectual property on the products being sold by our Company. These matters are pending at various stages of adjudication before various adjudication forums.
Criminal Proceedings
1. 14 cases are pending against Heinz India Private Limited (now owned by Zydus Wellness Products Limited,
one of the subsidiaries of our Company) and/or some of its employees, in relation to, inter alia, alleged
adulteration and misbranding of packaging and labelling of food products, and consequent violation of the
applicable provisions of the Prevention of Food Adulteration Act, 1954 and the Prevention of Food
Adulteration Rules, 1955, as applicable. These matters are pending at various stages of adjudication before
various adjudication forums.
Regulatory Proceedings
1. Mr. A. Halim (“Petitioner”) filed a public interest litigation before the High Court of Sikkim (“Court”)
alleging that APY Pharma had established their pharmaceutical medicines/drug factories at Singtam, East Sikkim which was discharging effluents and waste in the nearby Jhora used by public in the locality and thereby, endangering the human lives in the vicinity. The Court took suo moto action in the matter and vide an order dated December 5, 2017 directed the Member Secretary, State Pollution Control Board, Sikkim (“SPCB”) to visit the site and submit a report within two weeks. Subsequently, vide an order dated June 14, 2019, the Court impleaded all 48 pharma companies in the state of Sikkim as respondents in the matter. ZWPL was also issued notices on June 20, 2019, for both its units in Sikkim, stating that an inspection shall be conducted to, inter alia, examine the methods adopted by it for management of its solid waste. ZWPL submitted its compliance report before the Court stating that the report submitted by the SPCB to the Court did not indicate any non-compliance by ZWPL upon the inspection of its premises and accordingly, requested the Court for suitable orders. The matter is currently pending.
2. 17 cases are pending against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) and/or some of its employees, in relation to, inter alia, alleged adulteration and misbranding of packaging and labelling of food products, and consequent violation of the applicable provisions of the Food Safety and Standards Act, 2006, as applicable, and the Food Safety and Standard Rules, 2011, as applicable. These matters are pending at various stages of adjudication before various adjudication forums.
Tax Proceedings Zydus Wellness Products Limited
- Direct Tax
186
1. The Deputy Commissioner of Income Tax, Circle – 6(3), Mumbai (“IT Department”) passed an assessment order dated December 24, 2013 (“Impugned Order”) against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2009, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas subsidiaries of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Impugned Order, further increased the quantum of disallowance claimed by the Assessee under Section 14A of the Income Tax Act, 1961 by a retrospective application of Rule 8D of Income Tax Rules, 1962 and consequently, raised a demand for `1,648.29 lakhs from the Assessee. Subsequently, the IT Department issued a revised demand notice of `1,095.59 lakhs accounting for an incorrect computation of interest in the earlier notice. Pursuant to an appeal filed by the Assessee before the Income Tax Appellate Tribunal – “K” Bench, Mumbai (“ITAT”), the ITAT vide its order dated April 27, 2016 (“ITAT Order”) held that the AMP Expenses do not constitute an international transaction and that the provisions of Section 92 of the Income Tax Act, 1961 were not applicable in the matter. Subsequently, the IT Department filed an appeal before the High Court of Bombay against the ITAT Order which has been admitted by the court. The matter is currently pending.
2. The Deputy Commissioner of Income Tax, Circle – 7(1)(2), Mumbai (“IT Department”) passed an
assessment order dated December 8, 2014 (“Impugned Order”) against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2010, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas group companies of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Impugned Order, further disallowed the excess depreciation claimed by the Assessee on the assets transferred by it from Aligarh to Sitarganj and raised a demand, under Section 156 of the Income Tax Act, 1961, for `3,136.49 lakhs from the Assessee. The IT Department further revised the total income of the Assessee, vide its order dated December 19, 2014, on the basis of the recomputation order passed by DCIT, Transfer Pricing – I(6), Mumbai. Pursuant to an appeal filed by the Assessee before the Income Tax Appellate Tribunal – “K” Bench, Mumbai (“ITAT”), the ITAT vide its order dated April 27, 2016 (“ITAT Order”) (a) held that the AMP Expenses do not constitute an international transaction; (b) partly allowed certain deductions claimed by the Assessee, and (c) restored the issues to the assessing officer for further investigation and a fresh adjudication. Accordingly, basis the ITAT Order, the IT Department issued a revised refund of `813.70 lakhs. Subsequently, the IT Department also filed an appeal before the High Court of Bombay against the ITAT Order which has been admitted by the court. The matter is currently pending.
3. The Deputy Commissioner of Income Tax, Circle – 7(1)(1), Mumbai (“IT Department”) passed a draft assessment order dated March 18, 2015 (“Draft Order”) against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2011, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas group companies of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Draft Order, further decreased the claim of the Assessee for weighted deduction in its income from 200% to 100%, in the absence of necessary documents from the Department of Scientific & Industrial Research. Subsequently, the Assessee filed an appeal before the Dispute Resolution Panel, which vide their order dated December 28, 2015, allowed the relief to the Assessee (“DRP Order”). Accordingly, the IT Department, in their final assessment order dated January 28, 2016, upheld the DRP Order in relation to the alleged international transactions and raised a demand of Nil. Pursuant to an appeal filed by the Assessee before the Income Tax Appellate Tribunal – “K” Bench, Mumbai (“ITAT”), the ITAT vide its order dated November 6, 2017 (“ITAT Order”) concurred with the view taken by the ITAT for the Fiscals 2008-2010 on this issue, DRP Order and dismissed the appeal. The matter is currently pending.
4. The Deputy Commissioner of Income Tax, Circle – 7(1)(2), Mumbai (“IT Department”) passed an assessment order dated January 30, 2017 (“Impugned Order”) against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2012, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then group companies of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Impugned Order, further, inter alia, (a) decreased the claim of the Assessee for weighted deduction in its income from 200% to 100% in the absence of necessary documents from the Department of Scientific & Industrial Research; (b) included certain amounts paid by the Assessee, as reimbursements to foreign entities, to its total income due to non-deduction of TDS and (c) raised a demand, under Section 156 of the Income Tax Act, 1961, for `1,714.22 lakhs from the Assessee. Pursuant to an appeal filed by the Assessee before the Income Tax Appellate Tribunal – “K” Bench, Mumbai (“ITAT”), the ITAT vide its order dated February 9,
187
2018 (“ITAT Order”) partly allowed the appeal and concurred with the view taken by the ITAT for the Fiscals 2008-2011 on this issue and held that the AMP Expenses do not constitute an international transaction. The matter is currently pending.
5. The Assistant Commissioner of Income Tax, Circle – 12(2)(2), Mumbai (“IT Department”) passed an
assessment order dated February 13, 2018 (“Impugned Order”) against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2014, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas group companies of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Impugned Order, further, inter alia, (a) decreased the claim of the Assessee for weighted deduction in its income from 200% to 100% in the absence of necessary documents from the Department of Scientific & Industrial Research; (b) disallowed the deduction claimed by the Assessee for the cost of ESOPs granted to its employees; (c) disallowed certain deductions claimed by the Assessee under Section 80IC of the Income Tax Act, 1861 and raised a demand, under Section 156 of the Income Tax Act, 1961, for ̀ 1,491.22 lakhs from the Assessee. Subsequently, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) - XIII, challenging the Impugned Order. The matter is currently pending.
6. The Assistant Commissioner of Income Tax, Circle 12(2)(2), Mumbai (“IT Department”) passed a draft order dated October 22, 2019 (“Impugned Order”) under Section 143(3) read with Section 144C of the Income Tax Act, 1961 against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2015, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas group companies of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Impugned Order, further, inter alia, (a) decreased the claim of the Assessee for deductions claimed under Section 35(2AB) of the Income Tax Act, 1961; (b) disallowed certain deductions claimed by the Assessee under Section 80IC of the Income Tax Act, 1861 and raised a demand of `4,509.83 lakhs, under Section 156 of the Income Tax Act, 1961. Subsequently, the Assessee filed its objections, against the Impugned Order, before the Income Tax Appelate Tribunal. The matter is currently pending.
7. The Assistant Commissioner of Income Tax, Circle 12(2)(2), Mumbai (“IT Department”) passed a draft order dated December 10, 2019 (“Draft Order”) under Section 144C of the Income Tax Act, 1961 against Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging that, in Fiscal 2016, the Assessee had incurred substantial expenditure for advertising, marketing and sales promotion (“AMP Expenses”) for, inter alia, the brands owned by the then overseas subsidiaries of the Assessee and the Assessee was not compensated for such expenditure on an arms’ length basis. The IT Department, in the Draft Order, further, inter alia, (a) decreased the claim of the Assessee for weighted deduction in its income; and (b) disallowed certain deductions claimed by the Assessee under Section 80IC of the Income Tax Act, 1861. Subsequently, the Assessee filed its objections, against the Draft Order, before the Dispute Resolution Panel. The matter is currently pending.
- Indirect Tax
Zydus Wellness Products Limited
1. The Commissioner of Central Tax (Audit), Durgapur (“Commissioner”) issued a show cause-cum-demand
notice dated February 15, 2018 (“Notice”) against Zydus Wellness Products Limited (“ZWPL”) alleging that
ZWPL had availed self-credit of certain amounts in Fiscal 2015 and 2016 without fulfilling the conditions
laid down in clause 2B of the Notification no. 20/2007-CE dated April 25, 2007, as amended (“Notification”)
and accordingly, the Commissioner sought to recover the same from ZWPL under Section 11(A) of the
Income Tax Act, 1961 along with interest and penalty. ZWPL responded to the Notice clarifying the intention
of the Notification and that there was no actual loss to the exchequer. Subsequently, the Office of the
Commissioner, CGST & Central Excise, Siliguri (“CGST Department”) passed an order dated July 16, 2018
(“Order”) confirming the demand of excise duty of `912.90 lakhs under Section 11(A) of the Income Tax
Act, 1961 along with appropriate interest and imposition of a penalty of `912.90 lakhs, with a condition to
pay only 25% of the penalty amount if ZWPL fulfils the conditions prescribed under Section 11AC(1) of the
Central Excise Tax, 1944 (“Demand”). Subsequently, ZWPL filed an appeal before the Customs, Excise &
Service Tax, Appellate Tribunal, Kolkata seeking to set aside the Order and the Demand, respectively. The
matter is currently pending.
188
2. The Office of the Assistant Commissioner, T. Nagar Assessment Circle, Chennai – 600 028 (“IT
Department”) issued various notices all dated December 26, 2014 to Heinz India Private Limited (now
owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“Assessee”) alleging
that, for the period between Fiscals 2010-2015, the Assessee had paid tax on the sale of ‘Complan’ at the rate
of 5%, however ‘Complan’ allegedly being a food supplement/health drink was liable to be taxed at 14.5%.
Accordingly, the IT Department, vide its order dated May 4, 2015, proposed to revise the assessment of the
Assessee and seek sales tax at 14.5% on the respective turnover of the Assessee in the relevant years. Pursuant
to a writ of certiorarified mandamus being filed by the Assessee before the Madras High Court (“Court”),
the Court, vide its order dated March 19, 2015 called for records of the IT Department for the period between
Fiscals 2010-2015 and remitted the matter to the IT Department for fresh consideration. The Assessee, vide
a letter dated May 4, 2015 to the IT Department requested the IT Department to defer the further proceedings
in the matter until receipt of the orders of the advance ruling authority on the advance ruling application filed
by Glaxo Smithkline Consumer Healthcare Limited and consider the issue in line with a past judgement by
the Court in another matter of a similar nature. The matter is currently pending.
3. Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our
Company) (“Assessee”) were issued notices dated August 19, 2009 and July 12, 2010 by the Assistant
Commissioner of Commercial Taxes, T Nagar (East) (“IT Department”) alleging that, for the Fiscals 2008
and 2009, the Assessee had paid tax on the sale of ‘Complan’ at the rate of 4%, however ‘Complan’ allegedly
being a branded proprietary food was liable to be taxed at 12.5% and were subsequently issued orders dated
July 9, 2010 and August 12, 2010 (“Impugned Orders”). The Assessee filed an appeal against the Impugned
Orders before the Joint Commissioner (CT) (Appeals), Chennai who, vide a common order dated April 27,
2011, dismissed the appeals (“CT Order”). Pursuant to an appeal filed by the Assessee, before the Tamil
Nadu Sales Tax Appelate Tribunal (Main Bench) (“TNSTAT”), Chennai against the CT Order, the TNSTAT
set aside the Impugned Orders and the CT Order and allowed the appeal (“TNSTAT Order”). The Assessee,
vide letters dated August 19, 2016 and April 27, 2017, requested the IT Department to provide a refund
against the amount deposited by it on the basis of the TNSTAT Order. The matter is currently pending.
4. The Deputy Commissioner – Fifth, Sales Tax, Ghaziabad issued a demand notice of `1,523.19 lakhs to Heinz
India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our
Company) (“Assessee”) for, inter alia, alleged non-submission of Form ‘F’ while undertaking stock transfer
from one of their C&F Agents during Fiscal 2005. The matter is currently pending.
5. The Deputy Commissioner – Fifth, Sales Tax, Ghaziabad issued a demand notice of `1,335.00 lakhs to Heinz
India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our
Company) (“Assessee”) for, inter alia, alleged non-submission of Form ‘F’ while undertaking stock transfer
from one of their C&F Agents during Fiscal 2004. The matter is currently pending. Litigations by our Subsidiaries Civil Proceedings 1. A.D.M. (F&R), Aligarh (“Authority”) issued a joint notice dated January 1, 1996 to Heinz India Private
Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) (“ZWPL”) and Glaxo India Limited (“Glaxo”) under Section 33 and 47-A of the Indian Stamps Act, 1899 alleging that less stamp duty was paid on the documents on the basis of which Glaxo transferred it assets of the ‘family products division’ to ZWPL. Subsequently, the Authority, vide an order dated May 17, 2002, held that ZWPL shall be liable to pay a stamp duty of `2,828 lakhs (“Impugned Order”). ZWPL filed an appeal before the Chief Controlling Revenue Authority (“CCRA”), challenging the Impugned Order, which was dismissed by CCRA, vide it order dated July 7, 2005, while upholding the Authority’s order (“CCRA Order”). ZWPL filed a joint appeal before the Allahabad High Court (“Court”) challenging the Impugned Order and CCRA Order. The Court, vide its interim order dated January 16, 2006, set aside the Impugned Order and CCRA Order and remanded the matter back to the Authority. CCRA, vide its order dated May 29, 2012 upheld the Impugned Order and directed ZWPL to pay ̀ 1,833 lakhs. (“CCRA Order – II”) Thereafter, ZWPL filed a writ petition before the Court challenging the CCRA Order – II. The claim amount involved is `2,828 lakhs as on date. The matter is currently pending.
2. Four cases have been filed by Heinz India Private Limited (now owned by Zydus Wellness Products Limited, one of the subsidiaries of our Company) against various parties, in relation to, inter alia, alleged infringement and passing-off of our intellectual property on the products being sold by such parties. These matters are pending at various stages of adjudication before various adjudication forums.
189
Litigation involving our Promoters and Directors
Litigations involving our Directors
Sharvil Patel
1. The Drug Inspector, Food and Drug Administration, Jamshedpur has filed a complaint (No.21 of 2014) in
January, 2014 before Chief Judicial Magistrate Court against the directors of Cadila Healthcare Limited
(“CHL”), including Pankaj Patel and Sharvil R Patel for misbranding of a pharmaceutical product Zyrop,
manufactured by CHL, as in the inner zipper of the product, storage instructions were written as “Keep in
cool & dry place or between 2 degrees to 8 degrees Centigrade”, whereas in the outer container, it was only
written “keep in cool & dry place”. The Directors of CHL have challenged the said proceedings and the
matter is now pending before the High Court of Jharkhand vide Cr. MP No.2804/2018.
Dharmishta Raval
2. Pfizer Inc., filed a contempt case against Dharmishta Raval, in here capacity as the director of Cadila
Healthcare Limited (“CHL”) in Delhi High Court (“Court”) alleging infringement of patent no.241773 /
218212 by CHL and violation of the statement made to the Court in the patent suit no.1119 of 2016, citing
that CHL has received tentative approval from USFDA for the products covered under the said patents and
therefore CHL is in breach of their undertaking submitted to the Court.
In 2016, Pfizer Inc., filed a patent suit no.1119 of 2016 against CHL alleging infringement of Indian Patent
No.241773 and 218212 ‘Tofacitinib’ in the Court and also impleaded Dharmishta Raval being one of the
directors of CHL as a party to the suit. In the said matter, CHL submitted to the Court that no cause of action
had accrued as CHL was not manufacturing, selling and marketing the relevant products allegedly covered
under the said patents. The Court recorded the statement and accordingly disposed the suit on November 27,
2017. The matter is pending.
Litigations involving our Promoters
Cadila Healthcare Limited
1. The Drug Inspector, Food and Drug Administration, Jamshedpur filed a complaint (No.21 of 2014) in
January, 2014 before Chief Judicial Magistrate Court against Cadila Healthcare Limited (“CHL”), and its
directors including Pankaj Patel and Sharvil R Patel for misbranding of a pharmaceutical product ‘Zyrop’,
manufactured by CHL, as in the inner zipper of the product, storage instructions were written as “Keep in
cool & dry place or between 2 degrees to 8 degrees Centigrade”, whereas in the outer container, it was only
written “keep in cool & dry place”. The Directors of CHL have challenged the said proceedings and the
matter is now pending before the High Court of Jharkhand vide Cr. MP No.2804/2018.
2. The Drug Inspector, Food and Drug Administration, Nagpur filed a complaint (RCC No.1609 of 2006) in
the year 2006 before the Additional Chief Judicial Magistrate, Nagpur against Cadila Healthcare Limited
(“CHL”) and its officials for allegedly selling a sub-standard pharmaceutical product,‘Prot Syrup’
manufactured by Hema Laboratories and marketed by CHL. The matter is currently pending.
3. Reliance Medical Agency, the Informant, had filed a complaint in August, 2015 with the Competition
Commission of India (“CCI”) against the Chemists and Druggists Association of Baroda (“CDAB”) and
various pharmaceutical companies, including Cadila Healthcare Limited (“CHL”), alleging, inter alia, that
prior to being appointed as stockists, they were required to take No Objection Certificate (‘NOC’) from the
local Chemists and Druggists Association in the State of Gujarat. Based on the complaint, the CCI ordered
investigation by the Director General of CCI (“DG”) vide, its order dated November 17, 2015. After
investigation, the DG submitted a report on May 1, 2016 holding that CHL, inter alia, has contravened the
provisions of the Section 3(1) of the Competition Act, 2002 along with Pankaj Patel, the then chairman and
managing director of CHL, being the person in-charge of and responsible for conduct of the business of
CHL. CHL has challenged the jurisdiction of CCI and the matter is now pending before the Supreme Court
of India vide SLP (C) No.30641 of 2018.
190
Pankaj Patel
1. The Drug Inspector, Food and Drug Administration, Jammu has filed a complaint before Chief Judicial
Magistrate Court, Jammu against Cadila Healthcare Limited (“CHL”) and Pankaj Patel, Director, CHL
for not of standard quality of veterinary preparation, Esgipyrin N injection, based on the quality analysis
report of the government analyst. CHL challenged the report of the government analyst and the matter is
now pending for final hearing.
For further details in relation to the litigations involving Pankaj Patel, please see “– Litigation involving our
Promoters – Cadila Healthcare Limited” on page 189.
Sharvil Patel
For details in relation to the litigations involving Sharvil Patel, please see “ – Litigation involving our
Directors – Sharvil Patel” on page 189.
Litigation, inquiries, inspections, or investigations initiated or conducted under the Companies Act or any
previous company law against our Company and / or our Subsidiaries in the last three years
There are no litigations, inquiries, inspections or investigations initiated or conducted under the Companies Act
or any previous company law, against our Company and / or our Subsidiaries in the last three years immediately
preceding the date of this Preliminary Placement Document.
Prosecutions filed against, fines imposed on, or compounding of offences by our Company and / or our
Subsidiaries under the Companies Act in the last three years
There are no prosecutions filed against, fines imposed on, or compounding of offences by our Company and/or
our Subsidiaries under the Companies Act in the last three years immediately preceding the date of this
Preliminary Placement Document.
Details of acts of material fraud committed against our Company in the last three years, if any, and if so, the
action taken by our Company
There has been no material fraud committed against our Company in the last three years immediately preceding
the date of this Preliminary Placement Document.
Defaults by our Company in respect of dues payable including therein the amount involved, duration of default
and present status of repayment of statutory dues, debentures (including interest thereon), deposits (including
interest thereon) and loans (including interest thereon)
As of the date of this Preliminary Placement Document, there are no outstanding instances of defaults in payment
of undisputed or disputed statutory dues by the Company and its Subsidiaries.
Further, there are no outstanding defaults in repayment of debentures and interest thereon, repayment of deposits
and interest thereon, and repayment of loan from any bank or financial institution and interest thereon by our
Company and its Subsidiaries.
Litigation or legal action pending or taken against our Promoters by any Ministry or Department of the
Government or any statutory authority in the last three years immediately preceding the year of circulation of
this Preliminary Placement Document and directions issued by such Ministry or Department or statutory
authority upon conclusion of such litigation or legal action
There is no litigation or legal action pending or taken against our Promoters by any Ministry or Department of the
Government or any statutory authority in the last three years immediately preceding the year of circulation of this
Preliminary Placement Document and directions issued by such Ministry or Department or statutory authority
upon conclusion of such litigation or legal action.
Details of default in annual filings under the Companies Act or rules made thereunder
191
There has been no default by our Company in the annual filings under the Companies Act or the rules made
thereunder.
Details of significant and material orders passed by any Regulator, Court or Tribunal the going concern status
of our Company and its future operations
There have been no orders passed by any regulator, court or tribunal which impact the going concern status of
our Company and/or its future operations.
192
INDEPENDENT STATUTORY AUDITORS
M/s. Mukesh M. Shah & Co., Chartered Accountants, have been appointed as Statutory Auditors of our Company
by the shareholders at their AGM held on August 27, 2020, for a period of five years. The Statutory Auditors of
our Company are independent auditors with respect to our Company, as required by the Companies Act and in
accordance with the guidelines issued by the ICAI.
The Audited Consolidated Financial Statements and the Unaudited Interim Financial Results included in this
Preliminary Placement Document have been audited by the Previous Statutory Auditors, M/s. Dhirubhai Shah &
Co. LLP, Chartered Accountants.
193
GENERAL INFORMATION
1. Our Company was originally incorporated as “Carnation Health Foods Limited” under the Companies Act,
1956 pursuant to a certificate of incorporation dated November 1, 1994 issued by the Registrar of
Companies, Gujarat, Dadra and Nagar Haveli. Our Company commenced its business on November 25,
1994, pursuant to a certificate of commencement of business issued the Registrar of Companies, Gujarat,
Dadra and Nagar Haveli. Subsequently, the name of our Company was changed to “Carnation Nutra-
Analogue Foods Limited”, pursuant to a fresh certificate of incorporation consequent upon change of name
issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli dated December 6, 1995.
Subsequently, the name of our Company was changed to “Zydus Wellness Limited” pursuant to a fresh
certificate of incorporation consequent upon change of name issued by the RoC dated January 5, 2009. The
registration number of our Company is 023490 and our CIN is L15201GJ1994PLC023490. The Registered
Office of our Company is situated at Zydus Corporate Park, Scheme no. 63, Survey no. 536, Khoraj
(Gandhinagar), Near Vaishnodevi Circle, S.G. Highway, Ahmedabad - 382 481. The website of our
Company is www.zyduswellness.in.
2. The Issue was approved by the Board of Directors on August 27, 2020 and our Shareholders through a
special resolution passed in their extraordinary general meeting held on September 19, 2020.
3. The Equity Shares are listed on BSE and NSE.
4. Our Company has received in-principle approvals under Regulation 28(1) of the SEBI Listing Regulations
from both BSE and NSE on September 23, 2020. We will apply to the Stock Exchanges for the final listing
and trading approvals of the Equity Shares on the Stock Exchanges.
5. Copies of our Memorandum and Articles of Association will be available for inspection between 11:00 am
to 1:00 pm on any weekday (except public holidays) during the Bid/Issue Period at the Registered Office.
6. Our Company has obtained necessary consents, approvals and authorizations, wherever applicable, in
connection with the Issue.
7. Except as disclosed in this Preliminary Placement Document, there are no material litigation or arbitration
proceedings pending against or affecting us, or our assets or revenues, nor are we aware of any pending or
threatened litigation or arbitration proceedings, which may have a material adverse effect on the Issue. For
further details, see “Legal Proceedings” beginning on page 184.
8. There have been no defaults in the annual filings of our Company under the Companies Act or the rules
made thereunder.
9. Except as disclosed in this Preliminary Placement Document, there has been no material change in the
financial or trading position of our Company since the date of the Audited Consolidated Financial Statements
for the Fiscal 2020, which has been included in this Preliminary Placement Document.
10. Our Company confirms that it is in compliance with the requirement of minimum public shareholding
requirements as required under the terms of the SEBI Listing Regulations and SCRR.
11. The Floor Price for the Equity Shares under the Issue is `1,775.85 per Equity Share which has been
calculated in accordance with provisions of Chapter VI of the SEBI ICDR Regulations. Our Company may
offer a discount of not more than 5% on the Floor Price accordance with the approval of the shareholders
accorded through their special resolution passed in their extraordinary general meeting held on September
19, 2020 and in terms of Regulation 176(1) of the SEBI ICDR Regulations.
12. Our Company and the BRLM accept no responsibility for statements made otherwise than in this Preliminary
Placement Document and anyone placing reliance on any other source of information, including our website,
would be doing it at his or her own risk.
194
13. Details of the Company Secretary and Compliance Officer of our Company:
1. Unaudited interim financial results for the three-month period ended June 30, 2020 along
with the limited review report
196 to 201
2. Audited consolidated financial statements for Fiscal 2020 along with audit report issued 202 to 239
3. Audited consolidated financial statements for Fiscal 2019 along with audit report issued 240 to 275
4. Audited consolidated financial statements for Fiscal 2018 along with audit report issued 276 to 306
I Dhirubhai Shah & Co LLP CHARTERED ACCOUNTAN TS
4th Floor, Adi tya Building, Near Sardar Patel Seva Samaj, Mithakhali Six. Roads, Ellisbridge, Ahmedabad 380006.
Limited Review Report on Unaudited Quarterly Standalone Financial Results of Zydus Wellness Limited under Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015
To The Board of Directors of Zydus Wellness Limited
1. We have reviewed the accompanying Statement of unaudited standalone financial results
of Zydus Wellness Limited ('the Company') for the quarter ended 30th June, 2020 ('the
Statement'}.
2. This Statement, which is the responsibility of the Company's management and approved by
the Board of Directors, has been prepared in accordance with the recognition and
measurement principles laid down in Indian Accounting Standard 34 "Interim Financial
Reporting11 ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013, and other
accounting principles generally accepted in India and in compliance with Regult1tion 33 of the
Listing Regulations. Our responsibility is to issue a report on the Statement based on our
review.
3. We conducted our review of the Statement in accordance with the Standard on Review
Engagements (SRE} 2410 "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India.
This standard requires that we plan and perform the review to obtain moderate assurance as
to whether the Statement is free of material misstatement. A review is limited primarily to
inquiries of company personnel and analytical procedures applied to financial data and thus
provides less assurance than an audit. We have not performed an audit and accordingly, we
do not express an audit opinion.
4. Attention is drawn to the fact that the figures for the 3 months ended 31st March, 2020 as
reported in these financial results are the balancing figures between audited figures in respect
of the full previous financial year and the published year to date figures up to the third
quarter of the previous financial year. The figures up to the end of the third
previous financial year had only been reviewed and not subjected to audit.
qua
Phone : (079) 2640 3325/26 I Website : www.dbsgroup.in I E-Mail : info@dbsgro
Branch: 204 Sakar Complex, Opp Abs Tower, Old Padro Road, Vadodara: 390015 196
5. Based on our review conducted as above, nothing has come to our attention that causes us
to believe that the accompanying Statement, prepared in accordance with applicable
accounting standards and other recognised accounting practices and policies has not disclosed
the information ~equired to be disclosed in terms of Regulation 33 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 including the manner in which it
is to be disclosed, or that it contains any material misstatement.
Place: Ahmedabad Date: July 31, 2020
For, Dhirubhai Shah & Co LLP Chartered Accountants Firm Registration No. 102511W/W100298
SCL~ \ p
Samip Shah Partner Membership No: 128531 ICAI UDIN: ~ () 1 ~ ~'S' ~ 1 A A A A A "
197
I Dhirubhai Shah & Co lLP CHARTERED ACCOUNTANTS
4th Floor, Aditya Building , Near Sardar Patel Seva Samaj, Mithakhali Six Roads, Ellisbridge, Ahmedabad 380006.
Limited Review Report on Unaudited Quarterly Consolidated Financial Results of Zydus Wellness Limited under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
To the Board of Directors of Zydus Wellness Limited
1. We have reviewed the accompanying Statement of unaudited consolidated financial results of Zydus Wellness Limited ("the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group") for the quarter ended 30th June, 2020 ("the Statement"), being submitted by the Parent pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations").
2. This Statement, which is the responsibility of the Parent's management and approved by the Parent's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013, and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. Our responsibility is to express a conclusion on the Statement based on our review.
3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE} 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements} Regulations, 2015, as amended, to the extent applicable.
4. The Statement includes the financial results of following subsidiaries:
Zydus Wellness Products Limited
Liva Nutritions Limited
Liva Investment Limited
Zydus Wellness International DMCC Phone : (079) 2640 3325/26 I Website : www.dbsgroup.in I E-Mail : [email protected]
Branch : 204 Sakar Complex, Opp Abs Tower, Old Padro Road, Vadodara: 390015 198
5. Attention is drawn to the fact that the figures for the 3 months ended 31st March, 2020 as reported in these financial results are the balancing figures between audited figure in respect of the full previous financial year and the published year to date figures up to the third quarter of the previous financial year. The figures up to the end of the third quarter of previous financial year had only been reviewed and not subjected to audit.
6. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review report of other auditors referred to in paragraph 7 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.
7. We did not review the interim financial information of one (1) subsidiary, Zydus Wellness International DMCC, included in the Statement, whose interim financial information reflects total revenue of Rs. 822 Lakhs, total net profit after tax of Rs. 239 Lakhs and total comprehensive income of Rs. 239 Lakhs, for the quarter ended 30th June, 2020 as considered in the Statement. This interim financial information has been reviewed by other auditors whose report has been furnished to us by the management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of this subsidiary, is based solely on the report of the other auditors and the procedures performed by us as stated in paragraph 3 above.
Our conclusion on the Statement is not modified in respect of the above matter.
Place: Ahmedabad Date: July 31, 2020
For, Dhirubhai Shah & Co LLP Chartered Accountants Firm Registration No. 102511W/W100298
Samip Shah Partner Membership No: 128531 ICAI UDIN: ' ~ t> 1-~ ~~11 f\l\ A F\AH ~9
199
ZY.dUs Zydus Wellness Limited
Registered office : Zydus Corporate Park, Scheme No. 63, Survey No. 536 Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, S. G. Highway, Ahmedabad 382 481.
Wellnes: Tel. No. (+91-79) 48040000 Fax No.: (+91-79) 67775811 Website: www.zvduswellness.in CIN No: l15201GJ1994PLC023490 Statement of Unaudited Results for Quarter Ended June 30. 2020
fin Lakh fin Lakh CONSOLIDATED COMPANY
C >uarter Ended Year Ended Quarter Ended Year Ended June March June March Sr. No. Particulars June March June March
8 Other Comprehensive Income (OCI) 25 193 (5) 201 a Items that will not be reclassified to profit or loss (net of tax) (7) 14 (10) (29) (1) 17 - 17 b Items that will be reclassified to profit or loss {net of tax) - - . -24 210 (S' 218 Other Comprehensive Income (net of tax) (71 14 (101 (29
8,944 7,120 8,Q35 14,390 9 Total Comprehensive Income (7+8) (1,752) (549) (1,886) (4,102} 10 Total Comprehensive Income attributable to:
8,944 7,120 8,Q35 14,390 a Owners of the company (1,752) (549) (1,886) (4,102) . - - - b Non-Controlling Interests - . . -
5,766 5,766 5,766 5,766 11 Paid-up equity share capital (Face Value l 10 each) 5,766 5,766 5,766 5,766 340,300 12 Reserve excluding Revaluation Reserve as per balance sheet of 315,704
previous accounting year (i.e. Other Equity) 37,500 13 Debenture Redemption Reserve 37,500
14 Earnings per share [EPS]
[EPS for quarter ended is not annualised] 15.47 11.98 13.95 24.58 a Basic(~) (3.03) (0.98) (3.25) (7.06} 15.47 11.98 13.95 24.58 b Diluted (l) (3.03) (0.98) (3.25) (7.06)
0.44 15 Debt Equity Ratio 0.47 1.87 16 Debt Service Coverage Ratio 0.61 1.87 17 Interest Service Coveraqe Ratio 0.61
200
Notes: l 2
3
~ 5
6
7
8
9
The above financial results for the quarter ended June 30, 2020 were reviewed by the Audit Committee and then approved by the s.»rd of Directors at their meeting held on July 31, 2020. The Statutory Auditors of the Company have earned out a "Umired Review" of the abo'ie financial r=ilts for the quarter ended June 30, 2020 pursuant IO Regulation 33 of SEBI (Usbng Obliaation and Disclosure Reauire.mentsl ReQulatiQns. 2015. The above results have been prepared in accardance with the Companies [Indian AecClunling Star>dards] Rules, 2015 [Ind AS] pl1!5Cribed unde,- Seclicn 133 of the Companies Act, 2013 and other recoanised accountir<1 oractices and oolldes to the extent aoolicab1e. The Company operaies in one segmen~ namely ''ConS\lmer Products", The Company had is:.ued Secured Redeemable Non·Convertlble Debentures (NCDs) of, IS0,000 lakhs, which are repayable in lhree equal yei,r1y instalments starting from January 16, 2022. Toese NCDs have been secured by way of charge on specific brancls. The asset wver of the said NCDs as on June 30, 2020 e)CO!eds hundred pe,cent of the principal amount of the NCOS. The Company obtained long term credit ratlng for ISS1Jance of NCDs an<! w.,s assigned credit ratings of 'CRlSlL AA+/ Stable" from CR!SIL Limited and "CARE AA+/ Stable" from CARE Rating Limited. There is no chance In the ratinqs of me NCDs by any of the ratinq aQencies durina the quarter, Due to seasonality of some of me Company's products, Company's Rl!Yenues and Pmfits are skewed in t.,,,oo, or the fim and last quarters of the financial yei,r. Hence the performaOOI! of th= auarters Is rot reo,=ntatlve and cannot be aeneralised fo, other ouart.ers. In the process of integration and a:mduding the merger of the acquired entity, Company incurred various expenses 11'.JWards transition service ag~ment (TSA), a,nsultancy fees, Stall1) duties, legal and professional cha~es and other lncidenral charges, The Corrpany would not have incurred these - In the normal course of business and hence these expenses are dasslfied as Exceotional Items, The figures of the quarter ended Mar 31, 2020 are the oolandng figure between audited figlJl'eS In respect of me fu ll financial year and restated year to date figures upro the third quarter of the orevious financial vear. As per me cu~nt assessment of Ille situation based on the Internal and e'Ktemal Information available up to me date of approval of these financial results by tile s.»rd of Directors, the Company continues to believe that the Impact of Covid·19 on its business, asset5, Internal ftnandal controls, profitabllity and liquidity, both present and future, would be limited and mere is no Indication of a~ material •~ on the carrying amounts or inventories, goodwill, Intangible assets, trade receivables, Investments and other fifli!ncial assets. The eventual outcome oJ the Impact of the global health pandemic may be different from mose estimated as on the date of approval of mese financial =,Its and the Company will dOsely monl10t any material changes to the economic environment and their imllllct on Its business In the times to come.
10 Agures of~ reporting perlods have been regrouped/ ~l\ed whereller necessary to correspond with the figures of the current reporting period.
Place: Ahmedab3d Date: July 31, 2020
By Order of e bttl. For Zvdus Welln ss Umited,
Dr. Sharvi P. atel airman
201
C/4\
Independent Auditors' Report
To the Members of Zydus Wellness limited
Report on the Audit of the Consolidated Financial Statements
Opinion
I Dhirubhai Shah & Co LLP CHARTERED ACCOUNTANTS
4th Floor, Aditya Building, Near Sardar Patel Seva Samaj, Mithakhali Six Roads, Ellisbridge, Ahmedabad 380006.
We have audited the accompanying consolidated financial statements of Zydus Wellness Limited ("the Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as 'the Group'), which comprises of the consolidated balance sheet as at 31st March 2020, and the consolidated stc.tement of Profit and Loss (including other comprehensive income), and the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies {Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the consolidated state of affairs of- the Group as at 31 March 2020, and its consolidated profit, total consolidated comprehensive income, its consolidated cash flows and the consolidated changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAl's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements.
Phone : (079) 2640 3325/26 I Website : www.dbsgroup .in I E-Mail : [email protected]
Branch : 204 Sakor Complex, Opp Abs Tower, Old Padro Road, Yadodoro : 390015 202
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter Description Response to Key Audit Matter
Assessment of impairment of goodwill Principal Audit Procedures
amounting to Rs. 3,92,002 Lakhs and Procedures performed by us have been
Intangible assets having indefinite useful life enumerated herein below:
amounting to Rs. 53,868 Lakhs respectively (Refer Note {5] to the consolidated financial statements)
The Group's evaluation of goodwill and intangible assets for impairment testing, involves the comparison of its recoverable amount to its carrying amount as at 31 March 2020, the Group's carrying value of intangible assets includes intangible assets having indefinite useful life aggregating to Rs. 53,868 Lakhs in its consolidated financial statements relating to Consumer Health & Wellness Cash Generating Units ("CGU's"}. These intangibles are subject to test of impairment by the management in accordance with the applicable accounting standards.
The carrying value of goodwill and intangible assets will be recovered through future cash flows and there is a risk that the goodwill and assets will be impaired if these cash flows do not meet the Group's expectations.
• Assessed the appropriateness of the accounting policies in respect of impairment by comparing with applicable accounting standards.
• Evaluated the design, tested the implementation and operating effectiveness of the internal controls over impairment assessment process, including those over the forecast of future revenues, operating margins, growth rate and terminal values, external market conditions and the selection of the appropriate discount rate.
• Tested the reasonableness of the key business projections and valuation assumptions carried out by the management / independent valuer in determining the fair value of the CGU, discount rate, revenue growth rate, EBITDA growth rate, terminal growth rate used in computing the fair value of the components.
In addition to significance of the amounts involved, management's assessment process is • complex as it involves significant judgement in determining the assumptions to be used to estimate the future cash flow.
Performed retrospective review of projections by comparison with historical performance, inquiries with management and forecast trends in the industry.
It inter-alia involves forecasts, principally Considered sensitivity to reasonable possibility relating to long-term revenue growth rates, of changes in the key assumptions and inputs terminal values, EBIDTA margins, external to ascertain whether these possible changes
have a material effect on the fair value.
203
market conditions and the discount rate used.
Considering the materiality of amounts involved together with the inherent subjectivity related to principal assumptions, which are dependent on current and future economic factors and trading conditions varying for different economic and geographical territories, assessment of carrying value of goodwill and intangible assets is considered to be complex and determined to be a key audit matter in our current period audit.
Information other than the Consolidated Financial Statements and Auditor's Report thereon
The Holding Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
The Holding Company's Management and Board of Directors are responsible for the matters stated in section 134(5} of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS} specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
204
In preparing the consolidated financial statements, respective company's management and Board of Directors of the entities included in the Group are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless respective company's management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Respective company's Board of Directors are also responsible for overseeing the Group's financial reporting process.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of Holding Company management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
205
Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
A. As required by Section 143 (3) of the Act, based on our audit, we report, to the extent applicable that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b. In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books.
c. The consolidated balance sheet, the consolidated statement of profit and loss, the consolidated cash flow statement and consolidated statement of changes in equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements.
d. In our opinion, the aforesaid consolidated financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the directors of the Holding Company as on 3pt March 2020 taken on record by the Board of Directors of the Holding Company and on the basis of written representations received by the management from directors of its subsidiaries as on 31st March, 2020, none of the directors of Holding Company and its subsidiary is disqualified as on 31st March 2020 from being appointed as a director in terms of Section 164 (2) of the Act.
206
f. With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and its subsidiaries, and the operating effectiveness of such controls, refer to our separate report in "Annexure A".
B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group - Refer Note 28 to the consolidated financial statements;
ii. The Group has did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Group during the year ended 31st
March, 2020.
C. With respect to the matter to be included in the Auditors' report under Section 197(16) of the Act:
In our opinion and according to the information and explanation given to us, the remuneration paid during the current year by the Holding Company and its subsidiaries to its directors is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director by the Holding Company and its subsidiaries are not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16} of the Act which are required to be commented upon by us.
For, Dhirubhai Shah & Co LLP Chartered Accountants Firm's registration number: 102511W/W100298
r ~Jpt~ Harish B. Patel Partner Membership number: 014427 UDIN:20014427AAAAZP7619
Place: Ahmedabad Date: 02.06.2020
207
Annexure - A to the Auditors' Report
. . Report on the Internal Financial Controls under Clause {i) of Sub-section 3 of Section 143 of the Companies Act, 2013 {"the Act")
We have audited the internal financial controls over financial reporting of Zydus Wellness Limited ("the Company") as of 31st March 2020 in conjunction with our audit of the consolidated financial statements of the Group for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The respective company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI') . These responsibilities include the design, Implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Group's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Group's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Group's internal financial controls system over financial reporting.
208
Meaning of Internal Financial Controls over Financial Reporting
Group's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiaries has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2020, based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Dhirubhai Shah & Co LLP Chartered Accountants Firm's registration number: 19,2511W/W100298
~t-r~ Harish B. Patel Partner Membership number: 014427 UDIN: 20014427AAAAZP7619
Place: Ahmedabad Date: 02.06.2020
... ~.,,,.,.,-. ... ~
~~ sy.~~-.:tr~: F .,_ '\"
._. r: ·• '-,:::_, l. , l \\•. '\')",; _;i:,
• ~ (. ~ • I.
\ -;-.• . \~ ·.~'i:,~-.'J
>-· · · o li
209
Particulars
Zydus Wellness limited Consolidated Balance Sheet as at March 31, 2020
Note No.
, in Lakh
As at March 31 2020 2019
ASSETS: Non-current assets:
Property, plant and equipment capital work-in-progress Right-of-use assets Goodwill Other intangible assets Financial assets:
Other financial assets Other non-current assets Deferred tax asset [net] Assets for tax [net]
Current assets: Inventories Financial assets:
Investments Trade receivables Cash and cash eQuivalents Bank balance other than cash and cash equivalents
Other current assets
Total EQUITY AND LIABILITIES: Equity:
Equity share capital other equity
Liabilities: Non-current Ila bilities:
financial liabilities: Borrowings Lease liabilities Other financial liabilities
Provisions other non-current liabilities
Current liabilities: Financial liabilities:
Borrowings Trade payables:
Due to Micro, Small and Medium EnterPrises Due to other than Micro, Small and Medium Enterprises
Lease Liabilities Other nnancial liabilities
Other current liabilities Provisions Current tax liabilities [net]
Total Significant accounting policies Notes to the consolidated financial statements As per our report of even date For Dhlrubhai Shah & Co LLP Chartered Accountants
..\..t\o~A i ~~~$HAHct ~ - ..... ,p. -r~'-7 ~t'q...-::
-=:::, FR~' . ~ 1 * l02511W/l\'10029S * )
Partner ~':J:: AHIAcDAR4D~1;=-:,
Membership Number: 014427 . , -Place: Ahmedabad • ~ Date : June 2, 2020 ro ACC\)'\'i '
Harish e. Patel ~ Umesh V. Parikh
Chief Financial Officer
3
4 5 5
6 7 8 9
10
11 12 13 14 15
16 17
18 19 20 21 22
23
24 24 19 25 26 27 9
2 1 to 47
18,877 353
1,590 3g2,002
54,883
977 465
12,079 163
481,389
29,234
11,041 11,820
5,448 2,794
17242 77,579
558 968
5,766 340 300 346,066
150,000 64 Sl
2,437 168
152 720
1,905
654 48,458
14 4,277 3,390 1,484 .
60182 558 968
For and oh behalf nf thP Bnard
D~~rv~
~ ~-;q~ ., .... ; , ... ,., A. .. ,. """ Company Secretary ,.. ±::le Time Director
20,742 1,031
381,974 54,026
667 4,054
10,299 3289
476,082
23,307
4,610 9,604
13,815 2,614
15 820 69770
545 852
5,766 332 862 338 628
150,000
63 2,283
252 152 598
6,925
989 38,240
3,948 3,174 1,074
276 54 626
545 852
210
Zvdus Wellness Limited Consolidated Statement of Profit and Loss for the year ended March 31, 2020
Particulars
REVENUE:
Revenue from operations Other income Total income
EXPENSES: Cost of materials consumed Purchases of stock-in-trade Changes In inventories of finished goods, work-in-Progress and stock-in-trade Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses
Total expenses
Profit before exceptional items and tax Exceptional items
Profit before tax Less: Tax expense:
Current tax Deferred tax •
Profit for the year Other Comprehensive Income
Items that will not be reclassified to profit or loss: Re-measurement gains on post employment defined benefit plans, net of tax
!terns ttiat will be reclassmed to profit or loss: Exchange differences on transaction of financial statement of a foreign subsidary
Other Comprehensive Income for the year [net of tax] Total Comprehensive Income for the Vear[net of tax] Net profit c1ttributable to:
Owne~ of the parent Non-controlling interests
Other Comprehensive Income Attributable to: Owners of the parent Non·controlling interests
Total Comprehensive Income Attributable to: Owners of the parent Non-controlling interests
Basic &. diluted earning per equity share [EPS] [in '1 Significant accounting policies Notes to the Consolidated financial statements As per our report of even date For Dhirubhai Sh"h & Co LLP Chartered Accountants
~::~:~~:dNa~:t· 014427 ~lo ACCf:l~~"t: Date: June 2, 2020
w I
U mesh II. Parikh
Chief Financial Officer
Note
No.
30 31
32 33 3'l 35 35
3, 4, 5 37
38
8 8
39 2
1 to 47
'in Lakh Year ended March 31
2020
176,682 1,071
177,753
75,382 8,249
(5,754) 17,469 13,991
2,639 49,230
161 206
16,547 {4 420) 12,127
(265) (1 780) (2,045) 14172
201
1.7 218
14390
14,172 .
218 -
14,390 .
24.58
For and on behalf of the Board
Dr. Sharvil P. Patel
~ · °"j~~ , Tatun G. Arora
Company Secretary Whole Time Director
Z019
84,282 3888
88,170
29,263 3,002
(2,428) 8,560 3,009 1,251
27 405 70 062
18,108 fl 045) 17,0£3
3,109 (3 170
(61 17 124
2
-2
17 126
15,914 210
2 -
16,916 210
40.10
211
Zydus Wellness Umlted Consolidated Cash flow Statement for the year ended March 31, 2020
Particulars , in Lakh Year ended March 31
2020 2019
~ t~i:zh flowf from o,2erating activities
Profit before tax 12,127 17,063 Adjustments to reconcile the profit for the year to net cash generated from operating activities:
Depreciation and amortisation e•pense 2,639 1,251 Loss on sate of assets [net] 2 -Profit on sale of investments [net} (522) (1,842)
Interest income (535) (2,039)
Fair value gain on financial instrument at fair value through statement of profit and Loss (14) (7) rnterest expense 13,991 3,009 Profit elimination of acquired business - (1,139)
Changes in operating "ssets and liabilities; net of effects from acquisitions: Increase In trade receivables (1,898) (703)
Increase in other assets (3,493) (3,877)
[Increase] / Decrease In Inventories (5,927) 24 Increase In trade payables and other liabilities 9,287 8,501 Re-measurement of Employees benefits [net] 428 2,312 Change In Non- controlling interest - (1,316)
Cash generated from operations 26,D85 21,237 Direct taxes paid [net of refunds] (160) (6,299)
Net cash from operating actMtles 25 925 14 938
~ Cash flows from Investing activities: Purchase of property, plant and equipment and other Intangible assets (2,463) {1,707) Proceeds from sale of property , plant and equipment 13 1 Purchase of Non Current Investments in a subsidiary [net] - (464,292) Profit from sale of current investments 522 1,642
Proceeds from sale of current investments - ID, 153 Investment in mutual funds [net) (6,417)
Proceeds from fi-ed deposit [net] - 35,799 Investment in Fixed Deposit [net] (513)
Interest receised 535 2,039 Net cash used in investing activities (8 323} (416 1651
!;_ Cash flows from financing activities: Proceeds from issued of equity share capital - 1,859 Proceeds from share premium - 255,641 Proceeds of Long term borrowing - 150,000 Current borrowings [net] (5,020) 4,425
Interest paid (14,006) (3,009)
Dividends paid (5,758) (3,121) Ta• on dividend paid (1,185) (642)
Net (decrease)/ increase in cash and cash equivalents (8,367) 3,926
Cash and cash equivalents at the beginning of the year 13,815 2,959
Cash and cash equivalents of acquired Business - 6,930 Cash and cash equivalents at the end of the year 5 448 13 815
Notes to the Cash flow Statement
1 The above cash now statement has been prepared under the " Indirect method" as set out In Ind AS-7 "Statement of Cash Flows"
2 All figures in brackets are outflows.
3 Previous year's figures have been regrouped wherever necessary_
4 Cash and cash equivalents comprise of : l in Lakh
Particulars As at March 31
2020 2019 2018
a Cash In Hand 6 4 2
b Balances with Banks 5,442 13,811 2,957
Total 5 448 ,... 13 815 2 959
A~ m:c our rego[t Qf even date Fnr "'"'"' nn H h~lf nf thP Bn~rrl
For Dhirubhai Shah & Co LLP
Dr, S~J.)
Chartered Accountants w Firm Registration Number: lOZSllW/Wl~
~b, ~ Chairmafl..,.,-
~ ~t ~- t'o
~ ~ nm . -~ /4~ Harish B, Patel I * 1025ll\\'I\Yi00298 * } Umesh V- Parikh Dhanraj P. Dagar Tar n G. Arora
Part,ier
~ '""'""" <-,
Chief Financial Officer Company Secretary Who e Time Director Membership Number: 014427
~ Place: Ahmedabad
Date: June 2, 2020 'tf£1 ACC\J
212
Zydus Wellness Limited Statement of Change in Consolidated Equity for the year ended March 31, 2020
a Equity Share Capital:
No. of Shares , in Lakh
Equity Shares of, 10/- each, Issued, Subscribed and Fully Paid-up:
As at March 31, 201B 39,072,0B9 3,907
Add : Shares issued during the year 18,592,055 1,859
As at March 31, 2019 . 57,664,144 5,766
As at March 31, 2020 57 664 144 5 766
b Other Equity: t in Lak.h
Particulars Reserves and Surplus Items of OCI
Debentures General Retained Foreign
FVTOCI Securities currency Total
Premium Redemption Reserve Earnings
translation Reserve
Reserve reserves
As at March 31, 2018 - 4,500 60,713 (1) 65,212 Add: Profit for the year - - 16,914 - 16,914 Add: Other Comprehensive income - - - - 2 2
Total comprehensive income - 16,914 - 2 16,916 Less: Profit elimination of acquired business (1,139) - (1,139} Transfer from Retained Earnings to Debenture Redemption
37,500 {37,500) - - -Reserve Add: Addition pursuant to Issue of shares 255,641 - 255,641 Transactions with Owners In their capacity as owners:
As at March 31, 2019 255 641 37 500 4 500 35 220 - 1 332 862
Add: Profit for the year - 14,172 - 14,172
Add: Other Comprehensive income - - 17 201 218
Total Comprehensive Income - - - 14,172 17 201 14,390 Transactions with owners in their capacity as owners:
Dividends (5,767) (5,767}
Corporate Dividend Tax on Dividend - (1,185) - (1,185) As at March 31, 2020 255 641 37 500 4 500 42 -440 17 202 340 300
A~ Qtr oyr !J:(!!![I Q( i:ve:a di!!!: For •nrl on f;\.h,lf of th<> P.n-,rl
For Dhirubhai Shah & Co LLP .. ~~ Chartered Accountants
Firm Registration Number: 102511 W /W l~B
~ --- Chairman
~ ~ f'A½ c. HAHJ
~ jj~ · r~ jJl F?.rl . ~
Harish B. Patel j ; 102511 V,' I\\' 100296 * I Umesh V. Parikh ~anraj P. Dagar Taru G. Arora \
Partner ~ AHimAOAO ~
Chief Financia I Officer Company Secretary Whole Time Director
Membership Number: 014427 # Place: Ahmedabad
Date: June 2, 2020 ?t11ro ACC~i~ --
213
Zydus Wellness Limited Note: 1 - Group Overview
The consolidated financial statements comprise financial statements or Zydus Wellness Limited ["the Parent"] and its Subsidiaries [collectively, "the Group"] for the year ended
and as at March 31, 2020. The Group operates as an integrated consumer Group with business encompassing the entire value chain in the development, production, marketing
and distribution of health and wellness products. The product portfolio of the Group includes brands like Sugar free, Sugar lite, Everyuth, l'lutralite, Complan, Glucon D, Nycil
and samprili Ghee . The Parent's shares are listed on the National Stock Exchange of India Limited (NSEJ and BSE Limited (BSEJ.
The registered off,ce of the Parent is located at Zydus Corporate Park, Scheme No. 63, survey No. 536 Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, S. G, Highway,
Ahmedabad 382 481. These financial statements were authorised fllr issue in accordance with a resolution passed by Bllard or the Directors at Its meeting held on June 2, 2020.
Note: 2 - Significant Accounting Pollcles
A The following note provides list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented unless otherwise stated.
1 Basis of preparation: A The fonanclal statements are in compliance with the Tndian Accounting Standards [Ind AS] notified under the Companies (Indian Accounting 'Standards] Rules,
2015, as amended and other relevant provislons of the Companies Act, 2013.
For all periods up to and including the year ended March 31, 2016, the Company had prepared its financial statements In accordance with the accounting standards
notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies [Accounts] Rules, 2014 [Indian GAAPJ. Effeclive from
Aprfl !, 2016, the Company has adopted Ind AS as per Companies [Indian Accounting Standards] [Ind AS] Rules, 2015 as notified under section 133 of the
Companies Act, 2013. The adoption was carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards.
B The financial statements have been prepared on historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:
I Derivative financial instruments
ii Certain financial assets and liabilities measured at fair value [rerer accounting policy regarding financial Instruments]
iii Defined benefit plans
2 Basis of consolidation: A The consolidated financial statements comprise the financial statements of the Parent and its subsidiaries as at March 31, 2020. Control is achieved when the Group
Is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: a Power over the Investee [ I.e. existing rights that give it the current ability to direct the relevant activities of the Investee]
b Exposure, or rights, to variable returns from Its involvement with the Investee and
c The ability to use its power over the investee to aflect its returns and
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and ·when the Group has less than a majority or the
voting or similar rights of an investee, the Group considers all relevant racts and circumstances in assessing whether It has power over an investee, Including:
a The contractual arrangement with the other vote holders of the Investee.
b Rights arising from other contractual arrangements.
c The Group's voling rights and potential voting rights.
d The size of the group's holding of voting rights relative to the size and dispersion of the holdings of the other voting rights holders.
B The Company re-assesses whether or not it controls an Investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements rrum the date the
Group gains control until the date the Group ceases to control the subsidiary. C Consolidated f,nanclal statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a member of the
group uses accounting policles other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to that group member's financial statements In preparing the consolidated financial statements to ensure conformity with the group's accounting policies.
O The financial statements of all entiUes used for the purpose of consolidation are drawn up to same reporting date as that or the Group, I.e., year ended on March
31. When tfle end or the reporting period of the parent is different from that or a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial
information as.of the same date as tfle financial statements of the parent to enable the parent to consolidate the financial inrormation of the subsidiary.
J Use of Estimates: The preparation of the consolidated 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 or contingent
assets afld liabilities at the date of the financial statements and reported amounts of income and expenses during the period. Application or accounting policies that
require critical accounting estimates Involving complex and subjective Judgments are provided below. 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 consolidated nnanclal statements in the period In which changes are made and, If material,
their errects are disclosed In the notes to the consolidated financial statements.
214
Critical estimates and judgments A Income Taxes:
Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions
and possibility of utilisation of Minimum Alternate Tax [MAT] credit in future.
B Property, plant and equipment: Property, plant and equipment represent a significant proportion of the asset base of the Group. 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 or its Ille. Management reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each reporting period end and any revision to these is recognised prospectively
In current and future periods. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their
life, such as chancJes in technoioQv. C Employee Benefits:
Significant judgments are involved in making estimates about the life expectancy, discounting rate, salary increase, etc. which significantly affect the working
of the present value of future liabilities on account of employee benefits by way of defined benefit plans.
D Leases: When the entity has the option to extend a lease, management uses its judgement to determine whether or not an option would be reasonably certain to be exercised. Management considers all facts and cifcumstances including their past practice and any cost that will be inrnrred to change the asset If an option
to extend Is not taken, to help them determine the lease term.
£ Product warranty and expiry claims:
Significant judgments are Involved In determining the estimated stock lying in the market with product shelf life and estimates of likely claims on account of expiry of such unsold goods lying with stockist.
F [mpairment of assets and investments: Significant Judgment Is Involved in determining the estimated future cash flows from the investments, Property, Plant and Equipment. other Intangible assets
and Goodwill to determine its value in use to assess whether there is any Impairment in Its carrying amount as reflected In the financials.
4 Foreign Currency Transactions: The Group's consolidated financial statements are presented in Indian Rupees [l], which is the functional currency of the Parent Company. For each entity, the
Group determines the functional currency and items Included in the financial statements of each entity are measured using that functional currency.
A The transactions in foreign currencies Me translated Into functional currency at the rates of exchange prevailing on the dates of transactions. e Foreign Exchange gains and losses resulting from settlement of such transactions and from the translatioo of monetary assets and liabilities denominated in foreign
currencies at the year end exchange rates are recognised in the Statement of Profit and Loss. C Foreign exchange differences regarded as an adjustment to bonrowing costs are presented in the statement of Pront and Loss within finance costs. All the other
foreiQn exchanqe qains and losses are presented in the statement of Profit and Loss on a net basis. D Investments In foreign subsidiaries and other companies are recorded in INR [functional currency) at the rates of exchange prevailing at the time when the
investments were made. 5 Revenue Recognition:
A The Group has applied Ind AS I JS - Revenue horn Contracts with Customers which is effective for an annual period beginning on or after April 1, 2.018. The following is the significant accounting policy related to revenue recognition under Ind AS 11S.
a Sale of Goods: Revenue from the sale of goods is recognized as revenue on the basis of customer contracts and the performance obligations contained therein. Revenue is
recognised at a point in time when the control of goods or services is transferred to a customer. Control Mes with the customer 1r the customer can
Independently determine the use of and consume the benefit derived from a product or service. Revenues from product deliveries are recognised at a point In
time based on an overall assessment of the existence of a right to payment, the allocation of ownership rights, the transfer or significant risks and rewards
and acceptance by the customer. The goods are often sold with volume discounts/ pricing incentives and customers have a right to return damaged or
expired products. Revenue from sales is based on the price in the sales contracts, net of discounts. When a performance obligation Is satisfied, Revenue Is
recognised with the amount of the transaction priee (excluding estimates of variable conslderaUon] that Is allocated to that performance obligation. Historieal
experience, specific contractual terms and future expectations of sales returns are used to estimate and provide for damage or expiry claims. No element of
financing Is deemed present as the sales are made with the normal credit terms as per prevalent trade practice and credit poMcv followed by the Group.
b Service Income: Service income is recognised as per the terms of contracts with the customers when the related se,vlces are performed as per the stage of completion or on
the achievement of agreed milestones and are net of Indirect taxes, wherever applicable.
e Goods c111d Service Ta~ [GSTJ is not received by the Group on its own account. Rather, it is tax collected on value added to the goods by the Group on behalf of the
qovemment. Accordinqly, it is excluded from revenue. C The specific recognition criteria described below must also be met before revenue is recognised:
a Interest Income: For all debt instruments measurt!d at amortised cost, Interest income is recorded using the effective Interest rate [EIR]. EIR Is the rate that 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 or the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Group estimates the expected
cash flows by considering all the contr.,ctual terms of the ftnancial instrument but does not c_onsider the expected credit losses.
b Dividend: Dividend income is recognised when the Group's right to receive the payment is established.
c Other Income:
Other income Is recognised when no signifocant uncertainty as to its determination or realisation exists.
215
6 Govemment Grants: A Government grants are recognised in accordance with the terms of the respeaive grant on accrual basis considering the status of compliance of prescribed
conditions and ascertainment that the orant will be received. e Government grants related to revenue are recognised on a systematic and gross basis in the Statement of Profit and Loss over the period during which the related
costs intended to be comoensated are incurred. C Government grants related to assets are recognised as income in equal amounts over the expected useful life of the related asset.
D When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of
this favourable interest Is regarded as a government grant. The loan or assistance is initially recognised and measured at fair value and the government grant is
measured as the difference between the Initial carrying value of the loan and the proceeds received. The loan is subseQuently measured as per the accounting
policy applicable to financial liabilities. However, In accordance with the exemption as per Ind AS 101, for such loans that existed on April 1, 2015 the Group uses
the previous GAAP carrying amount of the loan at the date of transition as the carrying amount of loan.
7 Taxes on Income:
Tax expenses comprise of current and deferred tax.
A Current Ta,r:
a Current tax Is measured at the amount expected to be paid on the basis of reliefs and deductions available in accordance with the provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
b current tax items are recognised in correlation to the underlying transaction either in Statement of Profit and Loss, Other Comprehensive Income {00) or directly in equity.
B Deferred Tax: a Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabiliUes and their carrying amounts for
financial reporting purposes at the reporting date.
b Deferred tax liabilities are recognised for all taxable temporary difrerences.
c Deferred tax assets are recognised for all deductible temporary differences including the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit wUI be available against which the deductible temporary differences, the
carry forward of unused tax credits and unused tax losses can be utilized. d The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
e Deferred tax assets and liabilities are-measured at the tax rates [and tax laws] that have been enacted or substantively enacted at the reporting date and are expected to apply in the year when the asset is realised or the liability is settled .
f Deferred tax items are recognised in correlation to the underlying transaaion either in DCI or directly in equity.
g Deferred taK assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities. h Minimum Alternate Tax [MAT] paid In a year is charged to the Statement of Profit and Loss as current tax.
The Group reco9ni2es MAT credit available as an asset based on historical experience of actual utilisation of such credit and only when and to the extent lliere is a convincing evidence that the Group wi!I pay normal income tax during the specified period i.e., the period for which MAT credit Is allowed to be carried forward. Such asset, If any recognised, is reviewed at each balance sheet date and the carrying amount is written down to the extent there is no longer a convincing evidence that the Group will be liable to pay normal tax during the specified period.
8 Property, Plant and Equipment: A Freehold land is carried at historical cost. All other Items of Property, Plant and Equipment are stated at historical cost of acquisition/construction less accumulated
depreciation and impairment loss. Historical cost (Net of Input tax credit received/ receivable] includes related expenditure and pre-operative & project expenses
for the period up to completion of construction/ assets are ready for its intended use, if the recognition criteria are met and the present value of the expected cost
for the decommissioning of an asset after Its use Is Included In the cost of the respective asset if the recognition criteria for a provision are met. The carrying
amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance costs charged to the statement of
profit and loss during the reporting period in which they are incurred, unless they meet the recognition criteria for capitalisation under Property, Plant and
Equipment . On transition to Ind AS, the Group has elected to continue with the carrying value of all its property, plant and equipment recognised as at April 1, 2015
measured as per the previous GAAP and use that carrying value as the deemed cost or the property, plan and equipment.
8 Where components of an asset are significant in value In relation to the total value of the asset as a whole, and they have substantially different economic lives as compared to principal item of the asset, they are recognised separately as independent Items and are depreciated over their estimated economic useful lives.
C Depreciation on tangible assets is provided on "straight line method" based on the useful lives as prescribed under Schedule II of the Companies Act, 2013. The
management believes that these estimated useful lives are realistic and renect fair approximation of the period over which the assets are likely to be used. However, management reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future periods.
D Depreciation on impaired assets is calculated on Its residual value, If any, on a systematic basis over its remaining useful life.
E Depreciation on additions/ disposals of the Property, Plant and Equipment during the year Is provided on pro-rata basis according to the period during which assets are used.
F Where the actual cost of purchase or an asset is below { 10,000/-, the depreciation is provided at 100%.
G Capital work In progress is stated at cost less accumulated impairment loss, if any.
H An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between the net disposal proceeds and the carrying amount of the asset] Is Included in the income statement when the asset is derecognised.
216
9 Intangible Assets: A Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value
at the date of acquisition. Following initial recognition, intangible assets are earned at cost less any accumulated amortisation and accumulated impairment losses.
e Internally generated intangibles are not capitalised and the related expenditure is reflected In statement of profit and loss in the period in which the expenditure is
Incurred.
c Goodwill arising on acquisition of business is assessed at each balance sheet date for any impairment loss. D Technical Know-how Fees and other similar rights are amortised over their estimated economic life.
E Capitalised cost Incurred towards purchase/ development of software is amortised using straight line method over its useful life as estimated bv the management at the time of capltallsatlon.
F Intangible assets with in<lefinlte useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
G An item of intangible asset initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or clisposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between the net disposal proceeds and the canying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
10 Research and Development Cost: A Expenditure on research and development is charged to .the Statement of Profit and Loss of the year in which it is Incurred.
B Capital expenditure on research and development is given the same treatment as Propertv, Plant and Equipment.
11 Borrowing Costs: A Borrowing costs consist of Interest and other borrowing costs that are incurred in connection with the borrowing of funds. Other borrowing costs include ancillary
charges at the time of acquisition or a financial liability, which is n:cognised as per EIR method,
B Borrowing costs that are directly attributable to the acquisition/ construction of a qualifying asset are capitalised as part of the cost of such assets, up to the date the assets are ready far their intended use.
12 Expenditure during the Construction Period: The expenditure incidental to the expansion/ new projects are allocated to Propertv, Plant and Equipment In the year of commencement of the commercial production.
13 Impairment of Assets: The Propertv, Plant and Equipment and intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impalnment, the assets are grouped at the lowest
levels for which there are separately identifiable cash nows which are largely independent or the cash innows From other assets or groups of assets [cash
generating units]. Non-financial assets other than goodwill tnat suffered an Impairment loss are reviewed for possible reversal of Impairment at the end af each
reporting period. An Impairment loss Is charged to the Statement of Profit and Loss in the year in which an asset Is Identified as Impaired. The impairment loss
recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
14 Business combin~tions and Goodwill:
A Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred at
acquisition date !air value. B At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. for this purpose, the liabilities
assumed include contingent liabilities representing present obligation and they are measured at tneir acquisition date fair values i<respective of the fact that outflow of resources embodying economic benefits is not probable. However, the Deferred tax assets or liabilities and the assets or liabilities related to employee benefit
arrangements acquired in a business combination are recognised and measured in accordance with Ind AS-12 "Income Tax• and Ind AS-19 "Employee Benefits" resoectivelv.
C When the Group acquires a business, it assesses the nnancial assets and llabllltles assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This Includes the separation of embedded derivatives in host contracts by the acquire.
D Goodwill is Initially measured at the excess of the aggregate of the acquisition cost and the amount recognised for non-controlling interests, and any previous
interest held, over the Group's net identinable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate of
acquisition cost, the Group re-assesses whether It has correctly identified all of the assets acquired and all of the liabllities assumed and reviews the procedures
used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as Capital Reserve. However, if there is no clear evidence of
bargain purchase, the entity recognises the gain directly In equity as Capital Reserve, without routinQ the same through OC!.
E After initial recognition, Goodwill ts not amortised. Goodwlll is accordingly recognised at original value less any accumulated impairment. For the purpose of
impairment testing, Goodwill acquired In a business combination is, from the acquisition date, allocated to each or the Group's cash-generating units that are
expected to benent from the combination, Irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
F A cash generating unit to which Goodwill has been allocated is tested for impairment annually, or more frequently when there Is an lndlcation that the unit may be
impaired. If the recoverable amount of the cash generating unit is less than its carrying amount. the impairment loss is allocated first to reduce the carrving amount
of any Goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrvlng amount of each asset in the unit. Any impairment loss
for Goodwill is recognised in Statement of prom and loss. An Impairment loss recognised for Goodwill is nat reversed in subsequent periods.
G If the initial accounting for a business combination is incomplete by the end of the reporting period In which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provlslonal amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not
exceed one year from the acauisition date. H Wherever any business combination is governed by the Scheme approved by the Hon'ble High Court/ National Company Law Tribunal [ NCLTJ, the business
combination is accounted for as per the accounting treatment sanctioned in the Scheme. Goodwill arising on such business combination is amortised over the period, as provided in the Scheme, as approved by the Hon'ble High Court or NCLT.
217
1s Inventories:
Inventories are valued at the low~ or cost and net realisable value. Costs Incurred In bringing each product to its present locatlo<l and condition are accounted for as roClows:
A Raw Materials, Stores&. Spare Parts, Packing Materials, Anlshed Goods, Stock-in-Trade and Wori<s-in-Progress are valued at lower of cost and net reaUsable value.
B Cost (Net of Input ta• credit availed) of Raw Materials, Stores&. Spare Parts, Packing Materials, Finished Goods&. Stock-in-Trade Is determined on Moving Average Method.
C Costs of Finished Goods and Works-in-Progress are determined by taking material cost [Net of Input ta• credit availed), labour and relevant appropriate overheads based on the normal opera Ung capacity, but excluding borrowing costs.
Net realisable 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. Write down or Inventories to net realisable value Is recognised as an expenses and Included on "Changes In Inventories or Finished goods, Work-inprogress and Stock-In-Trade' and 'Cost of Material Consumed" In the relevant note In the Statement of Prom and Loss.
16 Cash and Cash Equivalents: Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the
original maturity Is three months or less.
17 Provisions, Contingent liabilities and Contingent Assets: A Provisions are recognised when the Group has a present obligation as a result or past events and it is probable that the outflow of resources will be required to
settle the obllgatlon and in respect of which reliable estimates can be made. A disclosure for contingent liablllty Is made when there Is a possible obligatlo<l, that
may, but probably wm not require an outflow of resO\Jrces. When there Is a possible obhgation or a present obligation In respect of which the likelihood of outflow
of resources is remote, no provision/ disclosure is made. Provisions and contingencies are reviewed at each balance sheet date and adjusted to rellect the correct
management estimates. COntlngent assets are not recognised but are disclosed separately in financial statements.
B If the effect of the time value of money is material, provisions are discounted using a current p,e-tax rate that renects, when appropriate, the risks speclf,c to the
liability. 18 Provision for Product Expiry Claims:
Provisions for product expiry related costs are recognised when the product Is sold to the customer. Initial recognition Is based on historical experience. The initial estimate of product expiry claim related costs Is revised annually.
19 Employee Benefits:
A Short term obligations: Liabilities for wages and salaries, Including leave encashment that are expected to be settled wholly within 12 months after the end of the period In which the employees render the related service are recognised in respect of employees' services up to the end of the reporting and are measured ay the amounts expected to be paid when the liabKilies are settled. The llabllltles are presented as current employee benefit obligations In the balance Sheet.
B long term employee benefits obligations:
a leave Wages and Sick Leave:
The llablllUes for earned leave and sick leave are not expected to be settled wholly within 12 months period after the end of the period In which the
employees render the related service. They are therelore, measured at the present value of expected future payments to be made In respect of services
provided by employees up to the end of the reporting period using the projected unit credit method, as determined by actuarial valuation, performed by an
Independent actuary. The benefits are discounted using the market yields at the end of reporting period that have the terms approximating to the terms of
the related obligation. Gains and losses through re-measurements are recognised In statement of profit and loss.
b Deflnl!d Benefit Plans:
Gratuity:
The Group operates a defined benefit gratuity plan with contributiOns to be made to a separately administered fund through life Insurance Corporation of
India through Employees Group Gratuity Plan. The Liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present
vallJe of the defined benefit plan obligation at the end or the reporting period less the fair value of the plan assets. The Llabllllles with regard to the Gratuity
Plan are determined by actuarial valuation, performed by an Independent actuary, at each balance sheet date using the prnjected unit credit method.
The present value of the defined beneflt obligation denominated In ~ Is determined by discounting the estimated future cash outflows by reference to the market yields at the reporting period on government bonds that have tenns approximating to the terms of the related obligation. The net Jnte~st cost in calculated by applying the discounting rate to the net balance of the def.,ed benefit obligation and the fair value of plan assets. Such costs are included in employee benefit expenses In the statement or Profit and Loss.
Re-measurements gains or losses arising from experience adjustments and changes in actuarial assumptions are recognised Immediately In the period in which they occur dlrectJy in "Other comprehensive Income· and are Included In retained earnings In the Statement or Changes In Equity and In the balance sheet. Re-measurements are not reclassifted to profit or loss In subsequent periods.
The Group recognises the following changes in the net defined benellt obligation as an expense In the statement or profit and loss:
i Service costs comprising current service costs, past-service costs, gains and losses on rurtailments and non routine settlements; ii Net interest expense or income.
Company administered Provident Fund:
In case of a specllled dass of employees, such contributions are deposited to Heinz India Private limited Employee Provident Fund. The rate at which the annual Interest Is payable to the beneficiaries by the trust Is being administered by the government. The Company has an obligation to make good the shortfa0, if any, between the return from the investments of the Trust and the notified Interest rate. Contributions to such provident fund are recognised as employee benefits expenses when they are due In the statement of profit and loss.
c D"flned Contribution Plans - Provident Fund Contribution:
Eligible employees of the Group receive benefits from a provident fund, which is a defined conlrlbutlon plan. Both the eligible employee and the Group make monthly contributions to the provident fund plan equal to a specified percenrage of the covered employee's salary. Amounts coflected under the providerlt fund plan are deposited in a government administered provident rund. The Group have no further ob!Jgatlo<l to the plan beyond its monthly contributions. Such contributions are accounted for as defined contribution plans and are recognised as employees benefit expenses when t hey are due in the statement of profit and loss.
c Employee Separation Costs:
The compensation paid to the employees under Voluntary Retirement Scheme Is expensed In the year of payment.
218
20 Dividends: The final dividend on shares is recorded as a liability on the date of approval by the shareholders and Interim dividend Is recorded as liability on the date of declaration by the Parent's Board or Directors.
21 Financial Instruments: A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
A Financial assets:
a Initial recognition and measurement: All financial assets are recognised initially at fair value plus, In the case of financial assets not recorded at fair vatue through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place [regular way trades] are recognised on the settlement date, i.e., the date that tihe Group settle to
ourcttase or ~II the asset. b Subsequent measurement:
For purposes of subsequent measurement, financial assets are classified as follows:
Debt Instruments at amortised cost: A 'debt instrument' is measured at the amortised cost if both the following conditions are met:
- The asset is held with an objective of collecting contractual cash flows - Contractual terms of the asset give rise on specified dates to cash nows that are "solely payments of principal and tntenest" [SPPI] on the princlpa I amount outstandinq.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate [EIR] method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs tllat are an Integral part of the EIR, The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from Impairment are recognised In the Statement of profit and loss.
ii Debt instruments at fair value throu!Jh other comprehensive income [FVTOCI]: A 'debt instrument' is classified as at the FVTOO if both of the following criteria are met: - The asset is held with objectives of both collecting contractual cash nows and selling the financial assets - The asset's contractual cash nows represent SPPI. Debt instruments Included within the FVT0CI category are measured initially as well as at each reporting date at fair value. Fair value movements i>re
recognized In the 0CI. However, the Company recognizes interest income, impairment losses &. reversals and foreign e.change gain or loss in the Statement
of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised In 0CI is reclassified from the equity to Statement of Profit
and Loss. Interest earned whilst holding FVT0CI debt instrument is reported as interest income using the EIR method.
iii Debt instruments and derivatives at fair value through profit or loss [FVTI>LJ: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortiied cost or as FVTOCI,
is classified as at FVTPL. Instruments Included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and LOSS,
iv Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other
equity Instruments, the Company may make an irrevocable election to present subsequent changes in the filir value In other comprehensive Income • The
Compariy has made such election on an Instrument by Instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVT0CI, then all ralr value changes on the Instrument, excluding dividends, are recognized In the oa. There is no necvclinq of the amounts from OCI to Statement of Profit and Loss, even on sale of invesbnent. However, the Company may transfer the cumulative gain or loss within equity. Equity Instruments included within the FVTPL category are measured at fair value with all changes recognized In the Statement of Profit and Loss.
c Derecognition: A financial asset [or, where applicable, a part of a financial asset] is primarily derecognlsed [i.e. removed from the Group's balance sheet] when:
The rights to receive cash nows from the asset have expired, or
The Group has transferred Its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows In rull without material delay to a third party under a 'pass-through' arrangement; and either [a] the Group has transferred substantially all the risks and rewards of the asset, or [b] the Group has neither transferred nor retained substantially all the risks and rewards or the asset, but has transferred control of the asset.
When the Group has transferred Its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it
has retained the risks and rewi>rds of ownership. When it has neither transferred nor retained substantially all of the risks and rewards or the asset, nor transferred
control of the asset, the Group continues to recognise the transferred asset to the e)(lent of the Group's continuing Involvement. In that case, the Group also
recognises an associated liability. The transferred asset and the associated liability are measured on a basis that renects the rights and obligations that the Group
has retained. When the Group has transferred the risk and rewards of ownership of the llnancial asset, the same Is derecognlsed.
d Impairment of financial assets: In accordance with Ind AS 109, the Group applies expected credit loss [ECL] model for measurement and recognition of Impairment loss on the following financial assets and credit risk exposure:
a Financial assets that are debt instruments, and are measured at amortised cost b Trade receivables or any contractual right to receive cash or another financial asset
c Financial assets that are debt instruments and are measured as at FVT0CI
The Group follows 'simplified approach' for recognition of impairment loss allowance on Point c provided above. The application of simplified approach does not require the Group to track changes in credit risk_ Rather, it requires the Group to recognise the impairment loss allowance based on lifetime ECLS at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and ri~k exposure, the Group detennines that whether there has been a significant increase in the credit
risk since initial recognition. If credit risk has riot increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent period credit quality of the instrument improves such tflat there is no longer a significant increase in credit
risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
219
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial Instrument. The 12-month ECL is a portion
of the ~fetlme ECL which results from default events tllat are possible within 12 months after the reporting date ECL is the difference between all contractual cash flows that are due to the Group in accordance wltll the contract and all the cash flows that the entity expects to receive [i.e., all cash shortfalls], discounted at the
original EIR.
ECL impairment loss allowance [or reversal) recognized during the period iS recognized as income/ expense In the statement of profit and loss. The balance sheet
presentation for various financial Instruments Is described below:
Financial assets measured as at amortised cost and contractual revenue receivables: ECL is presented as an allowance , i.e., as an integral part of the measurement
of those assets In the balance sheet, which reduces the net carrylnq amount. Until the asset meets write-off criteria, tile Group does not reduce impairment
allowance from the gr05s carryirn;i amount.
For assessing Increase in c,edit risk and impairment loss, the Group combines financial instruments on the basis of shared credit risk characteristics. B Financial liabilities:
a Initial recognition and meuurement: financial liabilities are classified, at initial recognition, as f01andal llabillties at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments In an effecUve hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case
of loans and borrowings and payables, net of directly attributable transaction costs.
b Subsequent mea5urement:
Subsequently all financial liabilities are measured as amortised cost, using EIR method. Gains and losses are recognised in Statement ot profit and loss when
the liabilities are derecognised as well as through the EIR amortlsatio<> process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an Integral part or the EIR. The EIR amortisation is included as finance costs In the Statement of profit and loss.
c Derecognltion:
A financial liability is derecognised when the obligation under the liability is diSCharged or cancelled or expires. When an existing financial liability is replaced
by another from the same lender on substantlally different terms, or the terms of an existing iability are substantially modirled, such an exchange or modification IS treated as the derecognl~on or the original Nabllity and the recognition of a new liability. The difference in the respective carrying amounts Is
recognised in the statement of profit or loss.
d Embedded derivatives: An embedded derivative is a component of a hybrid [combined) instrument that also includes a non-derivative host contract - with the effect that some of the
cash nows of the combined Instrument vary In a way similar to a standalone denvative. Derivatives embedded in all other host contracts are accounted for as
separate derivatives and recorded at fair value If their economic characteristics and risks are not closely related to those oft~ ~ost contracts and the host
contracts are not held for trading or designated at fair value though profit or toss. These embedded derivatives are measured at fair value with changes in fair
value recognised In profit or loss, unless designated as effective hedging Instruments.
C Reclassification of financial assets: The Group determines classification or financial assets and liabilities on Initial recognition. After initial recognition, no reclassification IS made for financial
assets which are equity instruments and financial liabilities. For nnanclal assets which are debt instruments, a reclassirlcation Is made only if there is a change
In the business model for managing those assets. Changes to the business model are expected to be Infrequent.The Group's senior management determines
change in the business model as a result of external or Internal changes which are significant to the Group's operations. Such changes are evident to external
parties. A change In the business model occurs when the Group either begins or ceases to perform an activity that Is slgnlrocant to Its operauons. If the Group
reclassifies fr,ancial assets, it applies the reclassificauon prospectlvely from the reclassif1Cation date which is the first day ot the Immediately next reporting
period folowlng the change In business model as per Ind AS 109.
D Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount Is reported in the balance sheet if there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
22 Fair Value Measurement:
Fair value is the price that would be received to sell an asset or paid to transfer a llablHty in an orderly transaction between market participants at the measurement
date. The fair value measurement Is based on the presumpUon that the transaction to sell the asset or transfer the llabllity takes place either:
a In the principal market for the asset or ijability, or b In the absence of a principal market, In the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability Is measured using the assumptions that market participants would use when pricing ltle asset or liability, assuming that
market participants act In their economic best Interest. A fair value measurement of a non-financial asset takes Into account a market participant's ability to
generate economic benefits 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 are available to measure fair value,
maximising the use of relevant observable Inputs and minimising the use of unobservable Inputs.
All assets and liabiliUes for which fair value is measured or disclosed in the financial statements are categorised within the lair value hierarchy, described as follows, based on the lowest level input that Is slgnlrocant to the fair value measurement as a whole:
a Level I - Quoted [unadjusted] market prices In actl\le markets for Identical assets or liabilities
b Level 2 - Valuation techniques for which the lowest level Input that IS significant to the fair value measurement Is direcUy or Indirectly observable
c Level 3 - Valuation techniques for which the lowest level Input tllat Is significant to the fair value measurement Is unobservable
for assets and liabilities that are recognised in the fiMnclal statements on a recurring basis, the Group determines whether transfers have occurred between levels
In the hierarchy by re-assessing categorisation [based on the lowest level input that Is slgnlfocant to the fan- value measurement as a whole) at the end of each reportinq period.
220
23 Leases: Ttle Group has adopted Ind AS 116 "leases' whleh Is effective for an annual period beginning on or after from April I , 2019. The following is the slgnirlcant accounting policy related to Ind AS 116. Ttle adOj)llon of this new Standartl has resulted in the Group recognising a right-of-use asset and related lease liability in connection with au former Oj)eratlng leases eKcept for those Identified as low-value or having a remaining lease term of less than 12 months ffom the date of Initial application.
The new Standard has been applied using the modlfled retrospective approach, with the cumulative effect of adopting Ind AS 116 did not have any impact to be recognised In equity as an adjustment to the Oj)ening balance of retained earnings for the current period. Prior periods have not been restated. For contracts in
place at the date of initial appllcatlon, the Company has elected to apply the definiUon of lease from Ind AS 17 and has not applied Ind AS 116 to arrangements that were previously not ldentiried as lease under Ind AS 17. The Group has elected not to Include initial direct costs in the measurement of the right-of-use asset
for opera«ng leases in existence at the date of Initial applica~on of Ind AS 116, being April 1, 2019. At this date, the Group has also elected to measure the right -ofuse assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition.
On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 rnonths and for leases of low-value assets the Group has applied the optional eKemptions to not recognise right-of-use assets but to account for the lease expense on a straight-line basis over the remaining
lease term . For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at t he date of initial appficatlon at the same amounts as under Ind AS 17 Immediately before the date of Initial application.
As a lessee: For any new contracts entered into on or after April J 2019, the Group considers whether a contract Is, or contains a lease. A lease Is defined as 'a contract. or part of a contract, that conveys the right to use an asset {the underlying asset) for a period of time in exchange for consideration'.
Measuremer1t ar1d recognition of leases as a lessee: At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost,
which Is made up of the Initial measurement of the lease liablllty, any Initial d irect costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any lncent!Ves received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of· use asset or the end of the lease term. The Group also assesses the right-of -use asset for Impairment when such Indicators exist. At the commencement date, the
Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate Implicit In the lease if that rate is readlly available or the Company's incremental borrowing rate.
Lease payments included In the measurement of the lease llabllity are made up of fixed payments (including In substance fixed], variable payments based on an lndeK or rate, amounts eKpected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to Initial measurement, the liabITity will be reduced for payments made and increased for Interest. It Is remeasured to reflect any reassessment or modification, or If there are changes to the In-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment Is reflected in the
right-of-use asset, or profit and loss If the right-of-use asset Is akeady reduced to zero. Tile Group has elected to account for short-term leases and leases or lowvalue assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an
expense in Statement of Profit and Loss on a straight-line basis over the lease term.
As a lessor: The Group's accounting policy under Ind AS 116 has not changed from the comparative period. As a lessor the Group classlnes Its leases as either operating or
finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards Incidental to ownership of the underlying asset, and classnied as an ooeratino lease if It cloes not.
24 Se9ment Reporting:
Operating segments are reported in a manner consistent with the Internal reporting provided to the Chief Operating Decision Maker (CODM) of the Group.
25 Earnings per Share:
Basic earnings per share are calculated by dividing the net pront Of loss [excluding other coml)(ehensive Income] for the year attributable to equity shareholders by
the weighted average number of equity shares outstanding during the year, The weighted average nt.mber d equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element In a right issue, shares split and reserve share splits [consolidation of shares] that have changed the number of
eouity shares outstandln<1, without a correspondlnQ chanae in resources. For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive Income] for the year attributable to eQulty share
holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dlluUve potential equity shares.
B Recent Accounting Pronouncements: The Ministry of Corporate Affairs notifies new standards or amendments to tile existing standards. There is no such notlfocation which would have been applicable effective from April 1, 2020.
221
Note: 3 • Property, plant and equipment:
l in Lakh
Freehold Leasehold Plant and Furniture
Office Particulars
Land Buildings
Equipment and Vehicles
Equipment Total
Land i:::-.,-r
Gross Block: As at March 31, 2018 49 570 3,485 8,218 30'1 244 230 13,llJO
As at March 31, 2019 4,337 1,607 9,461 18,296 617 338 253 34,909 Reclassrncation on adoption of Ind AS 116 (1607) - - - (16D7) As at April 1, 2019 4,337 - 9,461 18,296 617 338 253 33,302
Additions - 35 1,983 40 18 2.1 2,097
Disposals - - - (40) (5) (9) - {54) As at March 31, 2020 4 337 - 9 496 20 239 652 347 27'1 35 345
Depreciation and Impairment: As at March 31, 2018 - 49 515 4,033 137 104 172 s,010
Depreciation for the year - 6 160 972 37 32 22 1,229 As at March 31, 2019 - 92 1,734 11,638 347 162 194 14,167
Reclassification on adoption of Ind AS 116 - (92) - - - {92)
As at April 1, 2019 - - 1,734 11,638 347 162 19'1 14,075
Depreciation for tne year 441 1,854 76 43 1B 2,432
Disposals - - (32) (3) (4) - (39)
As at March 31, 2020 2 175 13 460 420 201 212 16 468
Net Block: As at March 31, 2019 4,337 1,515 7,727 6,658 270 176 59 20,742
As at March 31, 2020 4 337 7 321 6779 232 146 62 18 877
Note: 4 • Right-of-use assets:
tin Lakh Particulal"S Land Buildinas Total Gross Block:
As at April 1, 2019 (Refer Note 3) 1,607 1,607
Additions 16 84 100 As at March 31, 2020 1623 84 1 707
Depreciation and Impairment: As at April 1, 2019 (Refer Note l) 92 92
Depreciation for the year 18 7 25
As at March 31, 2020 110 7 117 Net Block:
As at March 31, 2020 1,513 77 1,590
Note: 5 - Goodwill and Other intangible assets: l In Lakh
Other intangible assets Particulars Goodwill Brand/ Softwares Commercial Technical
Trade Mari< Rights Know-how Total Gross Block:
As at March 31, 2018 2,282 5 4] 10 2 60 Acquired Subsidiaries - 53,060 355 - 54,223
Additions 379,692 8 8 As at March 31, 2019 381,974 53,873 406 10 2 54,291
Additions 1,040 - 1,040
Additions pursuant to Ind AS 103 - measurement period 10,028 - - -As at March 31, 2020 392 002 53 873 I 446 10 2 55 331
Amortisation and Impairment: As at March 31, 2018 - 5 28 10 1 44
Acquired Subsidiaries - - 199 - 199
Amortisation for the year . - 22 22
As at March 31, 2019 - 5 250 10 1 265
Amortisa~on for the year - 181 1 182
As at March 31, 2020 - 5 '131 10 2 447
Net Block: As at March 31, 2019 381,974 53,868 156 - 1 54,026 As at March 31, 2020 392 002 53 868 l 015 54 883
222
Goodwill: 1 Goodwill acquired In business combination is allocated, at acqulsilloo, to the cash generating units [CGUs] those are expected to get benefit from that business
combination. The Cilrrylng amount of goodwill has been allocated to Consumer Health &. Wellness. 2 The recoverable amount of a CGU Is the higher of Its fair value less cost to sell and its value-in-use. The value-in-use is determined based on specific calculaUons. These
calculations use pre-tax caSh now projections for a CGU/ groups of CGU over a period of five years. An average of the range of key assumptions used is mentioned below. As of March 31, 2020 the estimated recoverable amount of the CGU exceeded Its carrying amount. The carrying amount of the CGU was computed by affocatlng the net assets to operating segments for the purpose of Impairment testing. The key assumptions used lor the calculations are as follows :
Particulars As at March 31 2020
Long Tenn Growth Rate 6.50% Discount Rate 10.000/o The above discounted rate is based on the Weighted Average Cost of Capital (WACC]. These estimates are likely to differ from ful\Jre actual results of operations and
cash nows. 3 For details or assets pledge as security Refer Note 18.
Note: 6 • Other financial assets: , In Lakh
As at March 31
2020 2019
[Unsecured, Considered Good unless otherwise stated)
Security Deposits 580 603 Fixed Deposits 397 64
977 667
No~: 7 • Other non-current asseu: , in Lakh
As at March 31
2020 2019
(Unsecured, Considered Good unless otherwise stated]
Capital Advances 304 315
Balances with Statutory Authorities 161 3,739
465 4 054
Note: 8 • Deferred tax:
A. Break up of deferred tax liabilities and assets into major components or u,e respective balances are as under: , In Lakh
AS at Olarge for As at Charoe for As at
March 31 Acquired
the previous March 31 the current March 31 Subsidiaries
B. The net deferred tax assets of, 1,780 lakh [March 31, 2019: , 3,170 lakh) for the year has been credited In the consolidated Statement of Pront and Loss.
C. The Group offsets tax assets and liabilities if and only if It has a legally enforceable right to set off current tax asset5 and current tax liabilities and the deferred tax assets and deferred tax llabtr.ties relate to income taxes levied by the same tax authority.
D. The major components of income tax expense for the year ended Marcil 31 , 2020 and March 31, 2019 are: , in Lakh
Year ended March 31
Profit or loss section: 2020 2019
Current income tax:
Current lnc.ome tax charge 3,098 Adiustments In respect of current income tax of oreviollS year (2651 11
(265) 3,109 DeferTed tax: Deferred tax relating to origination and reversal of temporary differences (1,780) (3,170)
Total expenses reported in the statement of profit or loss (2,045) (61)
223
E. Reconciliation of tax expense and accounting profit multiplied by India's domestic tax rate:
'( in Lakh
As At March 31
2020 2019
Profit before tax: 12,127 17,063
Enacted Tax Rate In India (%) 26.000/o 34.94% Expected Tax Expl!nses 3,153 5,962 Adjustments for:
Adjustments In respect of current Income tax of previous years (265) 11 Effect of Non-taxable Income (65) -Effect of Special tax deductions - 11 Effect ol Special tax deductions section 80IE of the Company - (230)
Adjustments In respect of Income exempt from tax (includes Share of profit from partnership firm} - (2,627) Effect of MAT Credit not accounted for - 893 Effect of differences in tax rate (2,760} Effect or unrecognised deferred tax assets/ liabilities (2,652} (3,517}
Effect of other n0<1·deductible expenses 492 28
OU,ers 52 (S92
Total (2045, (61 Total expenses reported in the statement of profit or loss (2 045] (61
MAT credit of, 5,414 lakh and l 5,805 lakh for March 31, 2020 and March 31, 2019, respectively, that are available for set off against future tax liabilities have not been recognised and the same will be eligible for set off up to fifteen years from the year In which the same arises.
Note: g - Assets for tax [net] and tax liabilities [net]:
, in lakh
As at March 31
2020 2019
Advance payment of tax (Net of provision for taxation) 163 3,013
163 3 013
Out of above: Disdosed as Assets for tax [ net] 163 3,289 Disclosed as Tax liabilities [ net] - 276
Note: 10 - Inventories:
Inventories consist or the following valued at lower of cost or net realisable value
{ in lakh
As At March 31
2020 2019 Raw Materials 3,138 3,179 Work-in-progress 9,199 6,796
2020 2019 Investment in Mutual Funds [Quoted) [Valued at fair value through profit or loss]
ICICI prudential overnight fund direct plan growth 1,02,47,307 [OJ 11,041 -l(olak liquid direct plan growth O [ 1,21,805] 4,610
11 041 4 610 [•] In ·Nos.· figures of previous year are stated in [ ).
Note: 12 -Trade receivables:
{ In Lakh
As At March 31
2020 2019
Unsecured - Considered good 11,820 9,604
11820 9 604
224
Note: 13 - Cash and casll equivalents: '{ In Lakh
As At March 31
2020 2019
Balances with Banks - Current accounts 5,442 13,811
cash on hand 6 4
5 448 13 815
Note: 14 • Bank balance other than cash and cash equivalents:
" In Lakh As At March 31
2020 2019
Earmarked balances with bank for Unpaid dividend 80 71
fixed Deposit with banks [ ~1 2,714 2,543
2 794 2 614
[*] For details of lien on Fixed Deposits refer Note 23.
Note: 15 - Other current assets: fin lakh
As At March 31
2020 2019
[Unsecured, Considered Good unless otherwise stated] Balances with statutory authorities 12,444 14,363 Advances to suppliers 1,384 320 Prepaid e,cpenses 133 266
Other receivables 3 281 871 17 242 15 820
Note: 16 • Equity share capital: As At March 31
2020 2019
Authorised: 10,00,00,000 [as at March 31, 2019: 10,00,00,000] equity shares of ( JO each ~ in Laich 10,000 10,000
10,000 10 000
Issued, Subscr-ibed and fully Paid-up;
5,76,64,144 [as at March 31, 2019: 5,76,64,144) equity share of f 10 each f In lakh 5,766 5,766
5 766 5 766
A. The reconciliation in number of equity share is as under:
Number of shares at the beginning of the year 57,664,144 39,072,089
Add: Shares issued during the year - 18,592,055
Number of shares at the end of the year 57 664144 57 66'1 WI
B, The Parent has only one class of equity shares having a par value of l 10 each per share . Each holder of equity share ls entitled to one vote per share. The dividend proposed by the Board or Directors is subject to the approval of the shareholders in the Annual General Meeting, el(cept in the case of Interim dividend. In the event of liquidation of the Parent CrJmpany, the equity shareholders shall be entitled to proportionate share of their holding in the assets remaining after distribution of all preferential amounts and all
liabilities.
C. Details of Shareholder holding more than 5% of total equity shares of the Company
cadlla Healthcare Limited
Number of Shares 36,647,509 36,647,509
o/o to total share holding 63,SS'Yo 63.55%
Threpsl Care LLP (True North)
Number of Shares 7,220,216 7,220,216
% to total share holding 12.52% 12.52%
0 . Number of Shares held by Holding Company
Cadila Healthcare Limited 36,647,509 36,647,509
225
Note: 17 - Other equity: 1{ in Lakh
As At March 31
2020 2019 General reser,,e: [*]
Balance as per last Balance Sheet 4,500 4,S00 4,500 4,500
Foreign Currency transaction Reser,,e
Balance as per last Balance Sheet
Add: Credited during the year 17
17 Fair 'llc111ue through other comprehensi\le Income [FVTOCI] Reserve:
Balance as per last balance sheet 1 (1)
Add: Credited during the year 201 2
202 1
Debentures Redemption Reser,,es: [**] Balance as per last Balance Sheet 37,500
Add: Transfer from Retained Earnings - 37,500
37,500 37,500
Securities Premium[•••]
Balance as per last Balance Sheet 255,641
Add: Addition pursuant to issue of shares - 255,641
255,641 255,641
Retained Earnings:
Balance as per last balance sheet 35,220 60,713
Add; Profit for the year 14,172 16,914
Less: Profit elimination of acquired business - (1,139)
49,392 76,488
Less:
Dividends (5,767) (3,126)
Corporate Dividend Tax on Dividend fNet of CDT CreditJ (1,185) (642)
Transfer to Debentures Redemption Reserve ~ (37,500)
(6,952) (41,268)
42,440 35,220
340 300 332. 862
[*] General Reserve can be used for the purposes and as per guidelines prescribed in the Companies Act, 2013.
[**] The Group has created Debenture Redemption Reserve as per the provisions of Companies Act, 2013 and the captioned reserve has
been created out of profits of the company available for payment of dividend. ["'**] Securities premium is created due to premium on issue of shares. This reserve can be utilised in accordance with the provisions of
[•] Securities and Terms of Repayment for Secured Borrowings (i) 9.14% Secured Redeemable Nan-Convertible Debentures (with semi-annually interest pay-out] issued by creating a charge on
specific brands of the subsidiary company.
(ii) The NCDs are repayable in three equal yearly instalments starting from January 16, 2022 along with accrued interest for the
period. (iii)The outstanding amount of NCDs as at March 31, 2020 is~ 1,50,000 Lalc;h fas at March 31, 2019 : l 1,50,000 Lakh].
226
Note: 19 - Lease Liabilities: , in Lakh
Non-current Current
As At March 31 As At March 31 2020 I 2019 2020 2019
Lease liabilities 64 I 14
64 I 14
~ In Lakh As At March 31
2020 2019
A. Movement in lease liabilities are as below:
Lease liability recognised as on April 1 ,2019 - -Additions 84 -Finance cost accrued during the year 3 -Payment/ Payable of lease liabilities (9) -Lease liability as at March 31, 2020 78
B. The table provide details regarding the contractual maturities of lease liabilities as of March 31, 2020 on an undiscounted basls:
Less than one year 22
One to five year 71
99
c. The Group does not face a significant liquidity risk with regards to Its lease ltabltitles as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
Note: 20 - Other financial liabilities: { in Lakh
As At March 31
2020 2019
Trade deposits 5 21
Others 46 42
51 63
Note: 21 - Provisions: ~ in Lakh
As At March 31
2020 2019
Provision for employee benefits 1,103 949
Provision for VAT/ GST accrual 1,334 1,334
2,437 2 283
Defined benefit plan and long term employment benefit
A General description:
Leave wages [Long term employment benefit]: The leave encashment scheme is administered through Life Insurance Corporation of India's Employees' Group leave Encashment cum Life Assurance [cash
Accumulation) Scheme. The employees of the Group are entitled to leave as per the leave policy of the Group. The liability on account of accumulated leave as on
last day of the accounting year is recognised [net of the fair value of plan assets as at the balance sheet date] at present value of the defined obligation at the
balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.
Gratuity [Defined benefit plan]: The Group has a denned benefit gratuity plan, Every employee who has completed continuous services of five years or more gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary] for each completed year of service. The scheme Is funded with an Insurance company In the form of a qualifying insurance policy. The olans tvoically exoose the Company to actuarial risks such as: investment risk, interest rate risk, lonQevity risk and salary increment risk.
Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which Is determined by reference to market yields at the end of the reportinQ period on ciovemment bonds. Interest risk: A decrease in the bond Interest rate will increase ttie plan liability; however, this will be partially offset by an increase In the return on the plan's debt investments. Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their emolovment. An increase in the life exoectancy of the plan particioants will increase the plan's liabilitv. Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the olan n::.rticioants will in,..n:>::.<:<> the nl,m's ti::.hi1itv
227
, in Lakh March 31, 2020 March 31, 2019
Medical Leave Leave Wages Gratuity Medical leave Leave Wages Gratuity
B Change in the present value of the defined benefit obligation: Opening defined benefit obligation 50 1,048 2,141 43 238 290 Transfer in/ (out) obligation 182 (182) (10) 5 767 1,797
Current service cost 44 176 235 3 40 61
Interest cost 17 75 151 2 18 25
l\ctuarial (gains)/ losses on obligation 123 243 {187) (53) (30)
Benefits paid (103) (122) {148) (3} 38 (2)
Closing defined benefit obligation 313 1 238 2.102 so l 048 2 141
C Change In the fair value of plan assets: Opening fair value of plan assets . 179 1,945 - 166 279
Transfer In/ (out) obligatlon . . (11) - 2 1,632
Interest income . 3 142 - . Return on planned assets . 10 14 11 24
Contributions by employer . . 257 44
Benefil! paid . (148) (30}
Actuarial (losses)/galn on plan assets . - . (4)
Closing fair "alue of plan assets . 192 2,199 179 1,945
Total actuarial (losses) / gains ta be recognised 123 233 (201\ 3 (38) (2)
D Actual return on plan assets:
Actual return on plan assets . 13 156 11 20
E Amount recognised in the balance sheet:
Liabilities/ [Assets] at the end of tile year 313 1,238 2,182 so 1,048 2,141
Fair value of plan assel! at the end or the year . (192) {2,199) (179) (1,945)
Liabilities/ [Assets] recognised in the Balance Sheet 313 1 046 (i.71 so 869 196
F E><penses / [Incomes) recognised in the Statement of Profit and Lass:
Current ;er,lce cost 44 176 235 3 40 61 Interest cost on benefit obligation 17 75 151 2 18 25 Expected return on plan assets . (3) (142) . (11) (24)
Net actuarial [gains] / losses in the year 123 233 - (3) 3B
Net upenses / [benefits] 184 481 244 2 85 62 Net actuarial (gains)/ losses in tile year . . (201) 2
Amounts recognized in ocr . - ,201, . . 2
G Movement in net liabilities recognised in Balance Sheet:
Expenses as above [P & L Charge] 184 481 244 2 85 62
Contribution ta Plan assets . . (201) 2
Amount recagniseo in OCI . . (257) (43)
Benefits Paid (103) (122) D (53) ( 1)
Liabilities/ [Assets] recognised in the Balance Sheet 313 1046 (171 50 869 196
H Principal actuilrial assumptions for defined benefit plan and long term employment benefit plan: Particulars March 31, 2020 March 3 l, 2019
Discount rate [•] 6.70% 7.20%
Annual increase In salary cost [ l] 12% p.a. for 1 years, 12% for next 2 years, 9% p.a. thereafter 9% thereafter
[•]The rate of discount is considered based on market yield on Government Bonds having currency and terms in consistence with the currency and terms of the post employment benefit obligations .
[~] The estimates of ruture salary increases are considered in actuarial valuation, taking into account innation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
I The categories of plan ,1ssets as a% of total plan asseu are:
Particulars Medical Leave Leave Wages Gratuity Medical Leave Leave Wages Gratuity
In su ran ce plan 0% 100% 100% 0% 100% 100%
228
J Amount recognised ln current and previous four years:
"In Lakh
Gratuity: As at March 31
2020 2019 2018 2017 2016
Defined benefit obligatfon 2;182 2,1'11 290 257 231
Fair value of Plan Assets 2,199 1,9'15 279 242 216
Deficit/ [Surplus] in the plan (17) 196 12 15 15 Actuarial Loss/ [Gain] on Plan Obligation (187) (2) (15) (24) 15
Actuarial Loss/ [Gain] on Plan Assets - (4) (1) (1) The expected contributions for Defined Benefit Plan for the ne>i:t financial year will be in line with FY 2019-20 The average duration of future service of defined benefit plan obligation at the end of the year is 23.34 [as at March 31, 2019 : 23.99 years].
Sensitivity analysis;
A quantitative sensitivity analysis for significant assumption as is as shown below :
A Medical Leave:
~ in Lakh
As at March 31, 2020 As at March 31, 2019
Assumption Discount rate
Sensitivity Level - Discount Rate 0.5% O.S% 0.5%
0.5% decrease increase decrease increase
Impact on defined benefit obligation ['·lakhs] (9) 9 (3) 1
Assumption Annual Increase in salary cost
Sensitivity Level- Salary Growth 0.5% 0.5% 0.5%
0 .5% decrease increase decrease Increase
Impact on defined benefit obligation [l-Lakhs} 9 (9) 1 (3)
B Leave Wages :
~ in Lakh
As at March 31, 2020 As at March 31, 2019
Assumption Discount rate
Sensitivity Level - Discount Rate 0.5% 0.5% 0.5%
0.5% decrease increase decrease increase
Impact on defined benefit obliaation r, in Lakhs] (35) 34 (10) 8 Assumption Annual increase in salary cost
Sensitivity Level- Salary Growth 0.5% 0.5% 0.5%
0.5% decrease increase decrease increase
Impact on defined benefit obligation [' in Lak.hs] 34 (35) 7 10
C Gratuity:
'in Lakh As at March 31, 2020 As at March 31, 2019
Impact on defined benefit obligation [:( in Lakhs] (55) 60 (11) 13
Assumption Annual increase in salary c::ost
Sensitivity Level- Salary Growth 0.5% 0.5% 0.5%
0.5% decrease increase decrease increase
Impact on defined benefit obligation [~ In Lakhs] 60 (55) 12 (10)
The following payments are expected contributions to the defined benefit plan in future years:
"in Lakll
As at March 31
2,020 2,019
Within the next 12 months [ne>i:t annual reporting period] 677 356
Between 2. and 5 years 1,865 1,520
Between 5 and 10 years 1,373 1,533
Total expected payments 3 914 3 409
Note: 22 - Other non current liabilities:
~ In Lakh
As At March 31
2020 2019 Deferred revenue on Government grants 168 252
168 252
229
Note~ 23 - Borrowings: { in Lakh
As At March 31
2020 2019
loans repayable on demand:
Working capital Loan5 from Banks (Secured] [*] 1,630 2,150
Working capital loans from banks [Unsecured] [ 0 } - .q,soo loans from lntercorporate [Unsecured] [***] 275 275
1905 6 925
[•] Security and Terms of Repayment for Secured Borrowings:
Working capital Loans which are In the form of overdraft facility is secured by fixed deposits placed by the Group with the bank. The value of such Fixed deposits classified under current assets as at March 31, 2020 is" 2,707 Lakh [as at March 31, 2019: :t 2,360
Lakh]. The outstanding amount of k>an as at Marc.h 31, 2020 is t 1,630 Lakh [as at Marth 31, 2019: "° 2,150 Lakh].
[U] Terms of Repayment for Unsecured Borrowings:
Working Capital loans whic.h are repayable on demand, The outstanding amount of loans as at Match 31, 2020 is =l' Nil [as at March 31, 2019: ~ 4,500 Lakh].
(H*] Terms of Repayment for Unsecured Borrowings:
The Company has borrowed unsecured interest bearing loans frorn 2ydus Healthcare Limited of" 27S Lakh. The servicing of repayment of the loans will be made as per terms of loan agreernent.
Note: 24 -Trade payables:
~ in Lakh As At March 31
2020 2019
Due to Micro, Small and Medium Enterprises • 654 989
Due to other than Micro, Small and Medium Enterprises 48,458 38,240
49112 39 229 [~] Disclosure in respect of Micro, Small and Medium Enterprises:
A. Principal amount remaining unpaid to any supplrer as at year end 654 969 B. Interest due thereon
C. Amount of Interest paid by the Company in tenns of section 16 of the MSMED Act, along with the amount of the payment made -to the supplier beyond the appointed day during the year.
o. Amount of interest due and payable for the year of delay In making payme11t (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act.
E, Amount of Interest accrued and remaining unpaid at the end of the accounting year.
F, Amount of further interest remaining due and payable in succeeding years. The above information has been compiled in respect of parties to the extent to which they could be identified as Micro, Small and Medium Enterprises on the basis of information available with the Company.
Note: 25 - Other financial liabilities-: f in Lakh
As At March 31
2020 2019
Interest accrued but not due on borrowings 2,822 2,a.qo Payable to employees 1,375 1,037 Unpaid dividends [*] 80 71
4.277 3 948
[•] There are no amounts due and outstanding to be credited to rnvestor Education and Protection Fund.
Note: 26 - Other current liiilbilities: ~ in Lakh
As At Miilrch 31
2020 2019
Payable to statutory authorities 2,221 2,337 Deferred revenue on Government grants 68 S4 Advances from cus.tome~ 1101 783
3 390 3 174
230
Note: 27 - Provisions: ~ in Lak.h
As At March 31
2020 2019
Provision for employee benefits(*] 239 166
Provision for claims for product expiry and return of goods [**] 1,245 908 1484 1074
[-] Refer nrite 21. [**) Provision for claims for product expiry and return of goods:
a. Provision for product e)(piry claims in respect of products sold during the year is made based on the management's estimates considering the estimated stock lying with retailer. The Group does not expect such claims to be reimbursed by any with retailer. The Group does not expect such claims to be reimbursed by any other party in future.
b. The movement in such provision is stated as under: Opening balance at the beginning of the financial year 908 70 Add: Acquired Subsidiaries - 732 Add: Provision created during the year 2,206 113 Less: Provision used during the year Cl 8691 m Closing balance at the end of the financial year 1245 908
Note: 28 - Continaent liabilities and commitments rto the extent not orovlded forl: ~ in lakh
As At March 31 2020 2019
A Contingent liabilities:
a Other money for which the Group is contingently liable: j rn respect of Sales Tax matters pending before appellate authorities 6,913 6,045
ii In respect of the demands raised by the Central Excise, State Excise &. Service Tax Authority 1,337 1,337
iii In respect of Income tax 16,571 13,452
iv In respect of Stamp Duty 4,363 1,863
The Company has signed tax indemnity with erstwhile seller shareholder of acquired Hein2 India Private Limited that purchasing buyer shall have the rights to make an tax indemnity claim to e~tent of ttie loss suffered by the Company for the period prior to acquisition. Of the above :t 24,467 lakh and ~ 20,527 lakh as at March 31, 2020 and March 31, 2019, respectively, is covered under agreed tax indemnity clause and reimbursable from erstwhile shareholder of the Hein2 India Private Limited on the amount being crystalized.
B Commitments:
Estimated amount of contracts remaining to be executed on capital account and not provided for: 354 671
Note: 29 - Dividends: The Board of Directors, at its meeting held on March 13, 2020, dedared and paid the interim dividend of~ 5 per equity share of~ 10/· each.
Note: 30 - Revenue from operations: t In Lakh
Year ended March 31
2020 2019
Sale of products 173,419 80,821
Other operating revenues:
Net gain on foreign amency transactions and translation 53 44
Miscellaneous income 3,210 3,417 176 682 84 282
Note: 31 - Other income: ~ in Lakh
Yearenaea March 31
2020 2019 Finance Income:
Interest income on financial assets measured at amortised cost 535 2,039
Net gain on investments measured at Fair value through Prom and Loss 14 7 Net gain on sale of investments 522 1842
1 071 3 888
231
Note: 3 2 • Cost of material$ consumed: tin Lakh
Tear enoea M~- 31
2020 2019 Raw materials :
Stock at commencement 3,179 1,385
Add: Acquired subsidiaries 5,827
Add: Purchases 61,126 17,037
64,30S 24,249 Less: Stock at close (3,138) (3,179)
2020 2019 Salaries and wages 15,474 7,976 Contribution to provident and other funds [*] 1,355 380 Staff welfare expenses 640 204
17469 8 560 Of the above includes Whole-time Director's Rem~neration 372 331
[•] The Company's contribution towards the defined contribution plan 723 179
232
Note: 36 - Finance cost:
Interest e:itpense [•]
Bank commission and charges
(*] Interest expenses Includes:
On working capltal loans
On Non-convertible Debentures
On lease
Others
Note: 37 - Other expenses:
Consumption of stores and spare parts
Power and fuel
Labour charges
Rent
Repairs to buildrngs
Repairs to plant and machinery
Repairs to others
Insurance
Rates and raxes
Com mission to directors
TraYeliog expenses
Leg a I and professional fees ["']
Commission on sales
Freight and forwarding on sales
Advertisement and sales promotions
Representative allowances
Other marketing expenses
Directors' fees
Net Loss on disposal of fixed assets
Miscellaneous expenses [ 0]
[*] Legal and professional fees Include:
a Payment to the Statutory Auditors [excluding Taxes]:
As Auditor
For Other Services
b Cost Auditor's Remuneration including fees for other services
[**] Miscellaneous expenses include:
a Expenditure on Corporate Social Responsibility [CSR] Activities as required u/s 135 of the Companies Act, 2013.
Note: 38 • Exceptional Items:
Exceptional items[*]
[ "'] In the process of Integration and concluding the merger of the acquired entity, Company incurred various expenses towards transition service agreement (TSA), consultancy rees, stamp duties, legal and professional charges and other incidental charges. The Company would not have incurred these expenses in the normal course of business and hence these expenses are classified as
Exceptional Items.
Year ended March 31
2020 13,935
56
13 991
172 13,748
3
12
13 935
Year ended March 31
2020
935 2,162 1,899 1,200
202 1,091
793 393 654
-2,001
910
1,845
6,131 23,802
777 2,300
36
2
2,097 49 230
26 5
31 3
221
Year ended March 31
2020
(4,420) f4 420}
t In Lakh
2019
2,992 17
3 009
171
2,817
-4
2992
"'in Lakh
2019
182
960 97S
461
70 2.98
96
12.4
350
73
740
688
1,265
Z,470
15,176 5-13
J,227
so -
1,657
27 405
17
52
69
2
228
l in lakh
2019
(1,045)
(1 045)
233
Note: 39 • Earnings per equity share [EPSJ: Year ended March 31
2020 2019
The numerators and denominators used to calculate the basic and diluted EPS are as follows:
A. Profit attributable to Shareholder.; ~- In Lakh 14,172 16,91<1
B. Basic and weighted average number or Equity Shares outstanding during the year Numbers 57,664,144 <12,179,254
C. Nominal value of equity share ' 10 10
D. Basic Br. DIiuted EPS ' 24.SB 40.10
Note: 4D - Segment Information: The Chief Operating Decision Maker [CODM] revlews the Group as a single "Consumer" segment. The Group operates In one segment only, namely "Consumer Products." The Group also exports its products to other countries. However the value being below threshold limit as prescribed under Ind AS provisions or "Segment Reporting", the reporting is not reauired.
Note: 41 - Related Party Transactions: A Name of the Related Parties and Nature of the Related Party Relationship:
a Holding Company: Cadlla Healthcare Limited
b Fellow Subsidiaries/ Concerns: Zydus Noveltech Inc., USA
'liolio Healthcare Limited
German Remedies Pharmaceuticals Private Limited (formerly known as Acme Pharmaceuticals Private Limited)
Zydus Technologies limited*
Zydus Healthcare Limited
Dialforhealth India Limited•
Dialforhealth Unity Limited
Dialforhealth Greencross Limited
Liva Pharmaceuticals Limited•
Alidac Pharmaceuticals Limited*
Zydus Pharmaceuticals Limited (Formerly known as Alidac Healthcare Limited)
Zydus foundation
Windlas Healthcare Private Limited""
Zydus International Private Limited, Ireland
Zydus Netherlands B. 'I ., the Netherlands
Zydus Lanka (Private} Limited, Sri Lanka
Zydus Healthcare Philippines Inc., Phlllpplnes
Zydus Phamiaceuticals USA Inc., USA
Zydus Healthcare SA (PTY) Limited, South Africa
• Merged with Cadita Healthcare Limited w.e.f. April I, 2019.
*' ceased to be the subsidiary of holding Company w.e.f. April 30, 2020.
c Directors: Dr. Sharvil P. Patel
Mr. Ganesh Nayak
Mr. Kulin S. L.albhai
Mr. Savyasachi 5. Sengupta
Mr. Ashish Bhargava
Mr. Srivishnu Raju Nandyala
Ms. Dharmishtaben N. Raval
d Key Managerial Personnel:
Mr. Tarun G. Arora
Mr. Umesh V. Parikh
Mr. Dhanraj P. Dagar
Mr. Dhaval N. Soni
e Enterprises significantly influenced by Directors and/ or their relatiYes •
Mukesh M. Patel & Co.
f Post Employment Benefits Plan-Zydus Wellness Limited Employee Group Gratuity Scheme
Zydus Wellness Sikkim Employee Group Gratuity Scheme
Heinz India Private limited Provident Fund [ w.e.f January 30, 2019]
Heinz India Private limited Employee Provident Fund [ w.e.f.January 30, 2019]
Heinz India Prfvate Limited Gratuity fund
Heinz India Private Limited Pension fund
Hereon Pharmaceutical USA LLC, USA
Nesher Pharmaceuticals (USA) Inc,USA
Zydus Anlmal Health and Investments Limited (formerly known as Viollo Pharmaceuticals and Investments Limited)
Simayla PharmaceutJcals Pty Limited, South Africa
Scrfpt Management Services Pty Umited, South Africa
Etna Biotech SRL, Italy
Zydus France SAS, France
Laboratorios Combi,c S.L., Spain
Zydus Nikkho Farmaceutlca Ltda. ,Brazil
Zydus Pharmaceuticals Mexico SA de CV, Mexico
Zydus Pharmaceuticals Mexico Services SA de CV, Mexico
Zydus Worldwide DMCC, Dubai
Zydus Discovery DMCC, Dubai
Alldac Pharmaceuticals (Myanmar) Limited, Myanmar
Sentynl Therapeutics Inc., USA
Viona Pharmaceuticals Inc., USA
Biochem Pharmaceutical Private limited
Zydus Healthcare USA LLC, USA
Non -Executive Chairman
Non-Executive Director
Independent Director
Independent Director w.e.f November 2, 2018
Nominee Director w.e.f. January 30, 2019
Independent Director w.e.f. March, 11, 2019
Independent Director w.e.f. March, 11, 2019
Chief Executive Officer & Whole Time Director
Executive Officer (Chief Financial Officer)
Executive Officer [Company Secretary] w.e.f. February 6, 2019
Executive Officer [Company Secretary) up to February 6, 2019
Enterprises controlled by Key Managerial pe~onnel of holding Company
g M/s. Zydus Wellness - Sikkim, a partnership firm, was converted Into a company, namely Zydus Wellness Products Limited (formerly known as Zydus Nutritions
limited), with effect from February 28, 2019, pursuant to which, it became a subsidiary of the company. Pursuant to the Scheme of Amalgamation between two subsidiaries of the company i.e. Zydus wellness products Limited and Heinz India Private Limited (HIPL) which was sanctioned by the Hon'ble National Company Law Tribunal [NCLT] vide its order dated May 10, 2019 and effective date being May 24, 2019, HIPL has been merged with ZNL w.e.f. the appointed date of March 1, 2019.
234
6 Transactions with Related Parties: The following transactions were carried out with the related parties in the ordinary course of business:
a Details relating to parties referred to in Note 41 - A (a, b & r] , in lakh
Value of the Transactions Holding Company Fellow Subsidiaries Post Emplovment Benefits Plan
Heinz India Private limited e mplovee Provident Fund [ w .e.f - - 341 54 Januarv 30, 20191 Heinz India Private Limited Gratuity fund - - 200 Heinz India Private Limited Pension fund - - 66 Dividend Paid
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
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 mark.et is determined using valuation techniques which maximise the use ofobservable market data rely as little as possible on entity specific estimates.
Level J: If one or more of the significant inputs is not based on observable market data, the instrument Is Included in level 3.
(ii} Financial assets and liabilities measured at fair value - recurring fair value measurements:
~ in lakh Particulars As at March 31, 2020 As at March 31, 2019
Level 1 Level2 Level3 Total level 1 Level2 Level 3 Total
financial assets
Investments at FVTPL
Mutual funds 11,041 - - 11,041 4,610 '1,610
Total financial assets 11,041 - - 11,041 -4,610 4,610
Financial Liabilities - - - - -(iii) Fair value of instruments measured at amortised cost:
Financial assets and liabitlties measured at amortised cost for which fair values are disclosed. Flnanclal Assets: The canying amounts of trade receivables and other financial assets [other than derivatives], cash and cash equivalents are considered to be the aooroximatelv eoual to the fair values. Financial Liabilities: Fair values of loans from banks, other financial liabilities and trade payables are considered to be approximately equal to the carrying values.
Note: 43 - Flnandal risk management:
(I) Financial instruments by category:
1': in lakh
Particulars As at March 31, 2020 As at March 31, 2019
FVTPL FVOCI Amortised Total FVTPL FVOCI Amortised Total Cost Cost
Financial assets
Investments 11,041 - 11,041 4,610 4,610
Trade receivables - - 11,820 11,820 9,604 9,604
Cash and Cash equivalents - - 5,448 5,448 13,B15 13,815
Bank balance other than cash and cash - - 2,794 2,794 - 2,614 2,614
(ii) Risk Management: The Group's activities e1<pose It to market risk, liquidity risk and credit risk. 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.
The Group's risk management is managed ln close co-ordination with the board of directrirs and focuses on actively securing the Group's short, medium and long-term cash nows by minimizing the exposure to volatile financial marke~. Long-term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is e1<posed are described below;
236
A. Credit risk: Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Group Is exposed to credit risk from trade receivables, bank deposits and other financial assets. The Group periodically assesses the financial reliability of the counter party taking Into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual customer limits are set accordingly.
Bank deposits : The Group maintains Its Cash and cash equivalents and Bank deposits with reputed and highly rated banks Hence, there is no significant credit risk on such
deoosits.
Loans to related parties : They are given for business purposes. The Company reassesses the recoverability of loans periodically. Interest recoveries from these loans are
reaular and there is no event of defaults.
Trade Rttelvable: The Group trades with recognized and credit worthy third parties. It Is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an on-going basis with the result that the Group's exposure to bad debts Is not slgnlflcant. There are no signmcant credit risks with related parties of the Group. The Group Is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with respect to trade receivables is mitigated by the Group's large customer base. Adequate expected credit losses are recognized as per the assessments.
The history of trade receivables shows an allowance for ood and doubtful debts of Nil [Nil as at March JI, 2019]. The Group has made allowance of Nil [Nil as at March 31, 2019], against trade receivables of, 11,820 lakh and , 9,60~ lakh as at March 31, 2020 and March 31, 2019, respectively.
B. Liquidity risk: a Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit
facilities to meet obligations when due. Due to the nature of the business, the Group maintains flexibility in funding by maintaining availability under committed facllltles.
b Management monitors rolling forecasts or the Group's liquidity position and cash and cash equivalents on the basis of expected cash fiows. The Group account the liquidity of the market In which the entity operates. In addition, the Group's liquidity management policy involves projecting cash nows In major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
Maturitie< of financial liabilities : The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturiUes for all non-derivative 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
C Foreign currency risk The Group is exposed to foreign exchange risk ar1slng from foreign currency transactions, primarily with respect to the US Dollar, Euro and GSP. foreign exchange risk arises from recognised assets and liabilities denominated In a currency that is not the Group's Functional currency. The Group's operations in foreign currency is insignificant and hence
there is no materia I risk.
237
a Foreign currency risk exposure:
The Groups exposure to foreign currency risk at the end of the reporting period expressed as follows:
Sensitivity The sensltlvity of profit or loss and equity to cha1>9i!s In the exchange rates arises mainly from foreign currency denominated financial Instruments.
, in lakh
Particulars As at March 31 2020 As at March 31 2019
Movement Impact on Movement in Impact on
in Rate PAT Rate PAT
USD 90/o 12 7% 7
USD -9't/o (12) -7% (7)
EUR 7% 9 7% 16
EUR -7% {9) -7¾ (16) Other; 50/o 2 5% (0)
Other; -50/o (2) -5% 0
b Interest rate risk: Liabilities: [•J The Group's policy Is to minimise interest rate cash now risk exposures on long-term financing. As at March 31, 2020, the Group is exposed to changes In market Interest rates through bank borrowings at variable interest rates. The Group's Investments in Fixed Deposits are at fixed Interest rates.
Below is the sen~livity of profit or loss and equity changes in interest rates:
, In lakh
Particulars Movement in As at March 31
Rate 2020 2019
Interest rates +D.50% {7) {23)
Interest rates (0.50%) 7 23
• Holding aU other variables constant
c Price Risk (a) Exposure
The Group's exposure to price risk arises from Investments in equity and mutual fund hekl by the group and classified in the balance sheet as fair value through OCI and at fair value through profit or loss respectlvely, to manage Its price risk arising from Investments In equity securities and mutual fund, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the group.
(b) Sensitivity- Mutual Fund [•] The table below summarises the impact of increases/decreases of the index on the Group's equity and profit and loss for the period. The analysis Is based on the assumption that the price of the Instrument has increased by 2% or decreased by 2% with all other vMables held constant.
( in lakh Particular Movement in As at March 31
Rate 2020 2019 Mutual Funds [Quoted]
[ncrease 2% +2% 221 92
Decrease 2% -2% {221) (92) [ * ] Holding all other variables constant.
Note 44: Capital management: The Group's capita l management objectives all!
- to ensure the Group's ability to continue as a going concern
- to provide an adequate retum to shareholders
- maintain an optimal capital structure to reduce the cost of capital.
Management assesses the Group's capital requirements In order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Group's various classes of debt. The Group manages the capital structure and makes adjustments to it In the light of changes In economic
conditions and the risk characteristics of the underlying assets.
Particulars As at March 31 2020 2019
Gross debts ~ in lakh 151,905 156,925 Total eouitv ~ in lakh 346,066 338,626 Gross debt to eauitv ratio rNo. of timesl 0.44 0.46
Lo~n coven ants The Company has taken loan for working capital requirement and long term borrowings and as at March 31, 2020, the ratio of nnancial lndebtness net of cash and cash equivalents to shareholder's fund is 0.39, Interest Service Coverage Ratio Is 2.37 and financial indebtness net of cash and cash equiValents to Earnings before interest, tax, deprecia tion and amortisation {EBITDA) is 1.10, based on consolidated financial Information as per Company's debenl1Jre trust deed.
238
Note: 45 - Group Information:
Consolidated Financial Statements as at March 31, 2020 comprise the Financial Statements [FS] of Zydus Wellness Limited and its subsidiaries, which are as under:
Name Principal activities Country of Status of FS at % Share of Interest As at Incorporation March 31, March 31, March 31, 2019
2020 2020 Liva Investment Limited Investment India Audited 100% 100%
Liva Nutritions limited Consumer Health & Wellness India Audited 100% 100%
Zydus Wellness Products Limited Consumer Health &. Wellness India Audited 100% (Formerly known as Zydus Nutritions Limited] [Refer Note 41 A (g)]
Zydus Wellness International DMCC Consumer Health &. Wellness Dubai Audited 100% -IrDate of incorporation: Mav 28 20191 Heinz India Private limited Consumer Health &. Wellness India Audited 100% (Merged with Zydus Nutritions Limited w.ef. May 24, 2019)
Zydus Wellness Sikkim Consumer Health & Wellness India Audited 100% I Refer Note 41 A (g)] Zydus Nutritions Limited Consumer Health & Wellness India Audited 100% (Erstwhile known as Zydus Wellness Sikkim - Partnership Firm)
Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Stab!ments to Schedule III to the Companies Act, 2013:
Net Assets i.e. totat assets Share in Profit / [Loss]
Share in other Share In total minus total liabilities Comprehensive income Comprehensive Income
Aso/oot As% of As% of Consolidated As% of total
Consolidated , in lakh Consotldated { in lakh other '!' in takh Comprehensive , In lakh
Net Assets Prolit / [Loss] Comprehensi Income VP ,.,,-,,,..,D
Note: 46: COVID-19 Impact: The ministry of Home Affairs vide order No.40-3/2020 dated March 24, 2020, notified first ever nationwide lockdown in India to contain the outbreak of Covid Pandemic. As a result, our operations were completely shut down during initial days of the Lockdown. However, subsequently we could quickly get the required approvals for re•srarUng our manufacturing plants and operating our warehouses. Majority of the distributors could also get pennisslons from local authorities to re-open their business places. With ensuring necessary safety precautions to be taken, our majority of last mile field force and front line staff have atso come forward and supported the business. Though initially the entire economy faced shortage of labour and transportation facilities, progressively the government's support for the movement of essential commodities helped resolve the transportation and labour Issues to some extent. We are faced with the same uncertainties as faced by our country in general and FMCG Industry in particular due to current COVID 19 pandemic. However as stated before, operations are gradually moving towards near normalcy now and are in relatively better shape compared to what they were during the last week of March 20 and major part of April :w.
As per our current assessment of the situation based on internal and external Information available up to the date of approval of these financlal results by the Board of Directors, there Is no Indication of any material impact on the carrying amounts of Inventories, goodwill, intangible assets, trade receivables, Investments and other financial assets. The eventual outcome of the Impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results and the Company will closely monitor any material changes to the economic environment and their Impact on the business.
Note: 47: Fiaures of nrevious renortina oeriods have been renrouoed/ reclassified wherever necessarv to corresoond with the fioures of the current renortina neriod.
Signatures to Significant Accounting Policies and Notes 1 to 47 to the Financial Statements -A~ 12!::r i;iur re11oct Qf ev!rn tlil~ For and nnl ~ .. h:,lf of the Bn=-rrl
For Dhirubhai Shah & Co LLP
o,~ ~
Chartered Accountants w Firm Registration Number: 102S11W/Wl0029_8 __
~s\\~H & co Chairman
~* ~ \ ·tt,· ~ ~ ~ ;wr ,, .._
Harish B. Patel I ~ \~1~\\~li'-:1\t~ti> ".r.> ) Umesh v. Parikh Dhanraj P. Dagar n G. Arora
Partner ._ ~\\~~\,l)hi. ~ Chief Financial Officer Company Secretary e Time Director
,1 ri: Floor, /\, n h 1a Bu!kllnq Jr Sardc1 Seva St r
lliakhali ~,1x : ', ·, :,js, Ellisbt ,Jqc,
Ahnmrl 1t)c1d 38000(,.
We have audited the accompanying consolidated financial statements of Zydus Wellness Limited ("the Holding Company") and its subsidiaries {the Holding Company and its subsidiaries together referred to as 'the Group'), which comprises of the consolidated balance sheet as at 31st March 2019, and the consolidated statement of Profit and Loss (including other comprehensive income), and the consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31 March 2019, and its consolidated profit, total consolidated comprehensive income, its consolidated cash flows and the consolidated changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing {SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAl's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropria tp::::::::: .. ":-
provide a basis for our opinion on the consolidated financial statements. ~}~- 1!
Phone: (079) 2640 3325/26 I Website: www.dbsgroup.in I E-Mail : info@dbsg :====·-····"-·'-··· ··-· -·-• ===•-·-·
1st Floor Coma Chambers, 23 Nagindas Mosler Road,
Mumbai : 400023
204 Sakar Complex, Opp Abs I ower, Old Podra Road
Vcdodara: 3900i 5 240
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidatP.d financial st111tements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we. do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
----------«--•·-···· ... ····--·· A. Business Combination and Goodwill Pr[oclpa/ Auglt procedures
owing to acquisition of Heinz India Pvt. Our procedures included, amongst others, Ltd. the following:
Pursuant to the definitive agreements (i) entered into by the Company on October 24, 2018 to acquire Heinz India Private Limited [HIPL], the Company along with its wholly-owned entity, M/s. Zydus Wellness - Sikkim [a partnership firm] have (ii) completed the acquisition of HIPL on January 30, 2019. In view of tlwse, the operations of HIPL have been consolidated with that of the Group's Consolidated
(iii) Financial Statements.
(iv)
Ensured that the accounting of business combination are in line with the Accounting Standard requirements;
Assessed the independent valuation expert's methods, competency and objectivity;
We obtained the signed agreements and contracts relating to the acquisition, and identified the pertinent terms relevant to the accounting for the transaction.
Ensured that accounting principles on Consolidation have been correctly applied including accounting of Goodwill.
Business Combinations are accounted for as per Ind AS 103. The cost of an acquisition is measured as the aggregate of the consideration transferred at acquisition date fair value. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition date fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.
Based on the above procedures performed, we noted that the Management's assessment of accounting of value of Investments and Goodwill are in consonance with the Accounting Norms and are aligned with the Accounting Standard norms.
241
I I
~
I I
,-.---~·---·-··-•--·· ···~·· -- --··-·•-·--·· Goodwill amounting to INR 3, 79,692 Lakh arising on the acquisition of HIPL represents the excess of the cost of acquisition ovE.'r the Group's interest in the net fair value of the identifiable assets, liabilltlcs and contingent liabilities of the entity recognised at the date of acquisition.
We have reported this as a key audit matter because the accounting of business combination requires the exercise of significant management judgement and estimation, also the value of investment made by the Company is significant.
Information other than the Consolidated Financial Statements and Auditor's Report thereon
The Holding Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the consolidated financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appe,us to he materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application~:":.~t::apprQpriate
~>, ~:\\\>'&, -.,,, '/~~
242
..
implementation and maintenance of accounting policies; making Judgme,,ts and estimates that are reasonable and prudent; and design, in1plementatlon and maintenance of <1d<~quate internal financial controls1 that wc~re oper,1ting effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the cansolidated financial statement that giv~ a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, respective company's management ls responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters rel<Jted to going concern and using the going concern basis of accounting unless respective company's management either intends to llquldate the Group or to cease operations, or has no realistic alternative but to do so. Respective company's Board of Directors are also responsible for overseeing the Group's financial reporting process.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that Includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exi::;l:i. Misstatements can arise from fraud or error and are considered material if, individually or In the aggresate, they could reasomihly be experted to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i} of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of Holding Company management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material
✓1f,~\ J
243
l ' I
..
uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a f{Oing concern. If we conclude that ct rrniterial uncertainty exists, we are required to draw ,ittention in our auditor's report to the related disclosures in the financial statements or) if such disclosures are Inadequate, to modify our opinion. our conclusions are based on the audit evid~nce obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficier1cies in internal control that we Identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine Lhose matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion proper books of ;:iccount ns required by law have been kept hy,,:~~Group so far as it appears from our examination of those books;
244
c. The consolidated balance sheet, the consolidated statement ot profit and loss, tht' consolidated cash flow statement and consolldated statement of changes in equity dealt with by this Report are in agreement with the books of account maintained by the Group;
d. In our opinion, the aforesaid consolidated financial statements comply with th(• Indian Accounting Standards specified under Section 133 of the Act, read With Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of the written representations received from the directors of the Holding Company as on 31st March 2019 taken on record by the Board of Directors of the Holding Company, none of the directors of Holding Company and its subsidiary is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and Its subsidiaries, and the operating effectiveness of such controls, refer to our separate report In "Annexure A"; and
g. With respect to the other matters to be included in the Auditor's Report in accordance with Huie 11 of the Companies (Audit and Audilur s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group - Refer Note 29 to the consolidated financial statements;
ii. The Group has did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Group.
For, Dhirubhai Shah & Co LLP Chartered Accountants Firm's registration numb~r:~2511W/W100298
~ t. \½">
Harish B. Patel Partner Membership number: 014427
Place: Ahmedabad Date: 28th May 2019
245
Annexure - A to the Auditors' Report
Report on the Internal Flnanelal Controls under Clause (I) of Sub•section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Zydus Wellness Limited ("the Company") as of 31st March 2019 In conjunction with our audit of the consolidated financial statements of the Group for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The respective company's management ls responsible for establishing and maintaining Internal financial controls based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of Its business, including adherence to Group's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors' ResponsibUlty
Our responsibility is to express an opinion on the Group's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
246
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system ovN financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting Included obtaining an understanding of internal financial controls over financial reporting, assessing th<' risk that a rn<1terial weakness exists, and testing and evaluatinp, the design and operating eff<'ctiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, Including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Group's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
Group's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparution of financial statements for external purposes in accordance with generally accepted accounting principles. A company's Internal financial control over financial reporting includes those policies r1nd procedures that (1} pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
247
Opinion
In our opinion, the Holding Company and Its subsidiaries has, in all material respects, an adequate Internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 201'), based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Dhirubhai Shah & Co LLP Chartered Accountants Firm's registration numbo/-: 1cp511W/W100298
Non ... cu1-.-ent a&$el~: Pt1Jp1'1ly, pliltit tmd t'q1uptrn·nl
CJpltal work•ln•progreu tloodwlll Other lntanQlble IIIHtS f'lnancial auets:
Loans Other financial assets
Other non-current um Deferred tax affl!t.[net] A'INt for Current Tax
Current assets: !nventor,c,
Financial ay;d '.,.
[nvc~;lnH·nt._, rrad(• r('1.e1vahles c1,;h ;11KI rasll 1~quiv<1lcnt,, Bank t),1l,1nu: othor th1m (<d1 and cash equlvitlents LOcHl',
OU11,~r curn~nl ;-1st;('!,,
Total EQUITY ANO LIABILITIES: Equity:
Liabilities:
Equity share capital Other equity Non controlling Interests
Non-current liabilities: Financial liabilities:
Borrowings Other financi<:'ll li<1h11i1 ic~
Provisions Other non current l1<1h1liUns
Deferred lax lii11l1li1.ics I nctj
Current liabilities: Financial liabilities:
Borrowings I rode payables
Due to Micro, Small and Medium Enterprise Due to other than Micro, Small and Medium Enterprise
Other financial llabllltles other current llabllltles Provisions Current tax liabilities [net]
Total Significant accounting policies Notes to the Consolidated financial statements As per our report of even date For Dhirubhai Shah & Co LLP Chartered Accountants Firm Registration Number: 102511W/W100298
Zyrlu, Wellnliifil Umlt.1,1 Ccm11olld11ted Stl!tenumt of Profit and u,,s ff»r th<t ur •ndl!d March 31, 1.019 ·"_ .• ,,.,.-, , .,,.,,"_" Note
~,iv.:mue from operatinnc , H;Mr income T•rtlll Income
EXl'l:!NSllS: <.,mt of materials 1.011su1111.<.1 Pureho~es of stock•ln•trade Ch¥1<Jt>s in Inventories Of finillhe,1 q()(,cl,;, wn,k•ln•Progrus and ito,k ,n \1 ad<!! flxc,se uuly on sales employee benNilll exp~n11e 1 ,nance costs ! i11preciation, amorl1·,,1tirH1 ,-111d impairmoot exp~•1i•,t", Other expenses
Tol,ll expenRS
Profit IH,fore tllX Les,,: '1 ax expen!l!l:
Current tax Deferred tax
Profit for the year Other comprehensive Income
Mms that will not be n ·rlassif1,m to profit or lo•,•,: Re•measuremcnl gums u11 poi!t employm,;;nl ctol1111.a.l u~nefit p1An$jnet ul WxJ
other Comprehensive Jncotne for the year [net of ta1<] Total COmprehensive Income for the Y,:;ar[net of tax] Net profit attributable to:
Owners of the parent
Non•controlllng lnlC'rest,, Other comprehensive Income Attributable to:
Owners of the parent Non•controlling interests
Total <aomprehenslve Inwme Attributable to: Owners of the parent Non-controlling interests
Basic a diluted earning per equity share [EPS] [In Rupees] Signlflc:llnt accounting policies Notes to the Consolidated financial statements As per our report of evenJ;lotc For Dl11rubhal Shah & Co U P Ch,irlercd Accountants Firm Registration Number: 102511W/W100298
Harlsh B. Patel Partner Membership Number: 014427 Ahmedabad, Dated: May 28, 2019
A i;;,tf111..tll!l!llll from ouratlng attivlties: Profit before Tax
Adjustments for:
Depreclatic>n, lrnp,1irn11•nf and AmortlS/ilti<ln expenses [Proflt]/'LO$S on ,,.,1r, "f ,.,,•,~ts [Net]
Profit on sale of Investments [Net]
Interest l11come
F·air value gain on financial IO$lrument at 1,111 value throuqh statement of proflt andlLoss
Interest expense$
Profit elimination of acquired business
Buel debts written off
Rc·mcasuramant of Fmploy@I!'! benefits (net) Other comprehensive incom<i
Provisions for proliable product expiry claims and return of goods
Total
Operating profit before working capital chdl19es
Adjustments for:
[Increase] in trade receivables
[Increase] in other assets
[Increase] In Inventories
Increase in trade payables
[Decrease]/ Increase In other liabilities
Change in Non-Controlling Interest
Total
Cash generated from operations
Direct taxes paid [Net of refunds]
Net cash from operating activities
ft cash flows from invest;lna activities: Purchase of property, plant and equipment
Purchase of non current investment In subsidiary[Nct of cash and cash 1iiQ11ivalents of acquired m 1hcirli:iry J
Proceeds from sale of Property, plant and equipment
Profit on 5ales of Mutual Fund· Fair Value
Profit from sale of current Investments
Proceeds from sale of Current Investments
Investment in Mutual Funds (net)
Investment in Fixed Deposit (net)
Interest received
dividend
Net cash used in investing activities
Cash flows from financing activities;
Current Borrowings [Net]
Long Term borrowing
Interest paid
Dividends paid
Proceeds from issued of Equity Share Capital
Proceeds from Share Premium
Tax on dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents of the acquired subsidiaries
Cash and cash equivalents at the end of the year
11,063
14,938
BBS
2
(J,(11,11)
(JIM)
J70
4
11
(2)
(479) (4619)
(32!)
1,0?9
(414)
(788)
11
104
(11,754)
3,456
3,059
(170)
(12)
14,lit'I
(2,091)
12,883
(4,805)
8,078
(1,172)
6,906
(5,912)
(182)
812
2,147
2,959
251
lYOOl!I WIILLNl!IS UMl1'1£D
---------~-C_11_11h_Fl_o_w_~~tlll~!.~~for the y11111r e~cl,~~l_f!i"rclt 31, 20:HI ~~~;.,;;i""···c"··" now 6tlllt11m1.mt
1 I he• above cash flow statement has been prep,u,•cl "'"h" m,:!111><1'' .,,:;,;~ out lo Ind A•,·:;
Al! 1,gure!I In brackets arc outflows •
.:I t'revlous year's figures have been rewouped wherever nlll'.c;;,;,iry,
4 Cllllh ,,nd cash equivalents comprise of:
J
b
Cash on Hand
Balances with Banks
Total
1w:w ot,r rn,tf)Jt of even date For Dhirubhai Shah & Co LLP
Chatl<"red Accountants
~1m1 Registration Number: 102511W/W100298
Harlsh fl. Patel
P11rtner
Mt:mbership Number: 014427
Ahmedabad, Dated: May 28, 2019
Um,._h V, Parikh
Cl11d Hn,H1cial Officer
n1 i~nroj P, D.ig~r
company SecrM,irv
fl.s at March 31 20.l.ll 201!1
4
13,Sn
13,81'.,
Dr. Patel
Chairman
Whole Tlrrn· Director
2
2,!151
.>,959
252
ZydUI W1IIM11 Umlt:ed ltatam1nt of Chan • In ConlOlklatacl I II for tho 11r ended March 31 2011
a II II IIIUINI CII ltlh
lqulty llh1ru oflNR 10/• •■ch, 111118d, S11blcrlbecl Incl Pully Palcl•UPI Al at March 31, 2017 All et March 31, 2018 Add: Shares Issued during the year Al at March 31, 2019
b Other I
Al at March 11, 2017 Add: Profit for the year Add [Less]: Other Comprehensive Income Total Comprahenslve Income · Q It March 31, 2018 Add: Profit for the year Less: Profit elimination of acquired business Add [Less]: Other Comprehensive Income Transfer from Retained Earnings Less]: Transfer to Debenture Redemption Reserve Add: Addition pursuant to Issue of shares Total Comprehensive Income Transactions with Owners In their capacity as owners:
Dividends . Corporate Dividend Tax on Dividend
Q et March 31 20111 Ni P1r our report of even date For Dhlrubhai Shah & Co LLP Chartered Accountants Firm Registration Number: 10251lW/W100298
10lldated financial statements comprise flnanclal statements of Zydus Wellness Limited ("the Parent"] and Its Subskllarlu [collectlvely, "the Group"] for the year endld March 31, 2019, The Group operates as an Integrated consumer Group with buslnen 1111COmpasslng the en~re value chain In the development, produ~on, marketing and dlltrlbutlon of health and wellness products. The product portfolio of the Group Includes brands like Sugar free, Everyuth, Nutrallte, Comptan, Glucon D ,Nycll and S1mprltl Ghea • The Parent's shares ans listed on the Naijonal Stock Exchange of India Limited [NSE] and ase Llmltld, The nsglltafed office of the Parent 11 loc:atld at Hou&e no. 6 l ? , Sigma Commerce zone, Near !IICOn Temple, SarkheJ•Gandhlnagar Highway, Ahmedabad, Gujarat • 380015, Th- ftnanclal 111:atement& were authorlNd for Issue In accordance with a re110lution passed by Board of the Directors at Its meetlnQ held on May 28, 2019,
Notal :I• A
1
:a
untln Polld•1 note provides 11st of the significant accounting polleles adopted In the preparetlon of theN financial atatements. Th- polldes hive bean consllltently applied t.o
111 the years presented unless otherwise stated, 1111118 of preparation: A The flnanclal statements have been prepared In accordance with Indian Accounting Standards [Ind AS] notlfted under the 'Companlu [lndlan Accounting Stllnd1rd1]
Rules, 2015, as amended and other relevant provisions of the Companlu Act., 2013, I For all periods up to and Including the year ended March 31, 2016, the Group had prepared Its flnanclal lltlllternents In accordance with the accounting lltllndards notified
under the IIC!Ctlon 133 of the Companies Act. 2013, reed t.ogether with paragraph 7 of the Companies [Accounts] Rules, 2014 [Indian GAAP], Efl'ectlve from April 1, 2016, the Group has adopted Ind AS as per companies [Indian Accounting Standards] [Ind AS] Rules, 2015 as notified under IIC!Ctlon 133 of the Compenlu Act., 2013, The adoption was carried out In accordance with Ind AS 101, Plrst•tlme Adoption of Indian Accounting Standards,
C The financial statements have been prepared on historical cost balls, llllcept: for the following asset& and llabllltles which have been measured at fair value or revalued amount: ,
I Derivative flnanclal Instruments II Certain financial assets and llabllltles measured at fair value [rater accounting policy regarding financial Instruments] ill Defined benefit plans
lul8 of consolidation: A The consolidated financial statements comprise the financial statements of the Parent and Its sub8idlarles u at March 31, 2019. Control Is achieved when the Group Is
exposed, or has rights, to variable returns from It& Involvement with the Investee and has the ability t.o a!Teet thON returns through It& power over the Investee. Specifically, the Group controls an Investee If and only If the Group has: a Power over the Investee [I.e. existing rights that give It the current ability to direct the relevant activities of the Investee] b Exposure, or rights, to variable returns from It& Involvement with the Investee and c The ablllty to use Its power over the Investee t.o afTeet Its returns and Generally, there Is a presumptlOn that a majority of voting rights result In control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances In assessing whether It has power over an Investee, Including:
a The contractual arrangement with the other vote holders of the Investee. b Rights arising from other contractual arrangements. c The Group's voting right& and potential voting rights. d The size of the group's holding of voting rights relative to the llze and dispersion of the holdings of the other voting rights holders,
I Consolidated flnanc!al statements are prepared using uniform accounting polldes for Ilka transactions and other events In Similar circumstances. If a member of the group uses accounting policies other than those adopted In the consolidated nnandal statements for Ilka transactions and events In llmllar circumstances, appropriate adjustments are made to that group member's financial statements In preparing the consolidated flnanclal statements to ensure conformity with the group's accounting polldes.
C The financial statements of all entitles used for the purpose of consolidation are drawn up to same reporting date as that of the Group, I.e., year ended on March 31. When the end of the reporting period of the parent Is different from that of a sub&ldlary, the subsidiary prepares, for consolidation purposes, additional flnanclal information as of the same date as the financial statements of the parent t.o enable the parent to consolidate the financial Information of the subsidiary,
3 Un of E$tlmates: The preparation of the consolidated financial statements In conformity with Ind AS requires management to make estimates, Judgments and assumptlOns, These estimates, Judgments and assumptions affect the application of accounting policies and the reported amounts of assets and llablllttes, the dlsdosures of contingent assets and liabilities at the date of the financial statements and reported amounts of Income and expenses during the period. Application of accounting policies that require critical accounting estimates Involving complex and subjective Judgments are provided below. 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. Changc9 in estimates arc reflected in the consolideted flnencial statements In the period In which changes ere m1de and, if meterlal, their effeets ere dlllCIOled In the notes to the consolidated financial statements. Critical estimates and judgments
e Income Taxes: Significant judgments are involved in determining the provision for income taxes, Including amount expected to be paid/ recovered for uncertain tax positions.
b Property, plant and equipment: Property, plant and equipment represent a significant proportion of the asset base of the Group. 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. Management reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future periods. The lives are based on historical experience with similar assets as well as anticipation of future events, which may jmpact their life, such as changes in technology. ,
c Employee Benefits: Significant judgments are involved in making estimates about the life expectancy, discounting rate, salary increase, etc. which significantly affect the working of the present value of future liabilities on account of employee benefits by way of defined benefit plans.
d Product warranty and expiry claims: Significant judgments are involved in determining the estimated stock lying in the market with product shelf life and estimates of likely claims on account of expiry of such unsold goods lying with stockist.
e Impairment of assets and investments: Significant judgment is involved in determining the estimated future cash flows from the investments, Property, Plant and Equipment and Goodwill to determine its value in use to assess whether there is any impairment in its carrying amount as reflected in the financials.
4 Foreign Currency Transad:ions: The Group's consolidated financial statements are presented in Indian Rupees [INR], which is the functional currency of the Parent Company. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.
A The transactions in foreign currencies are translated into functional currency by the Groups' entities at their respective functional currency rates of 'exchange prevailing on the dates of transactions.
B Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the Statement of Profit and Loss.
C Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of Profit and Loss within finance costs. All the other foreign exchange gains and losses are presented in the statement of Profit and Loss on a net basis.
IIAN ' .. , : ~~
"II';
•} ,,,/ ;;
--··
254
•· co,1tlnue1h Re<.:O!Jnit um:
A llu_· Ci1nup h,_1'·, ilpj_ilicd Ind/\', 11s • RlttV~nue from Contracts with r:w.1nn1,·1. vvl111 !1 1', 1•lft't!1v,· 1o,r .in a:noual period beginning on or «llf:r /\11111 1, ·111H 11w fr11low1nq is
the •,1<J111llt,mt d( r rn111t11111 J!( iii( y idatru-j to nwenue recognition undvr 11111 11..,·, 1 I 1,
Sale of Good-..;
Kcvcnuc fruni u,c wlc ol yMtis 1s mr()(Jnlzed ,s revPnit@ ,,11 U1 .. 1i • .i, or ,u.l.v111;;1 w11U,i,tq ~nd th@ p@rfnrmanee oblll!~tl.(JJ1. w11l.l111ci.l Llic:1c111. Rcvcuui.;;J I• recognised at a point In timt whc11 ltil' (ootn)I of goods 111 •,ervlces Is transrarrlld to a cust:om,·r cnr,tml lie, w1tJ, !:Me cw;twllc,r If the customer rin lndependeritly determine the use of and consi .. ,w I.he i,,;nent denveo 11,1111 a product or serviet, l\evenue l'm111 p,ocl11<J t11'11veries ~1e rmTu)nlllld at a point In time bllllld on ,m overall assenment of thij exls1,,, ,w 01 " lliJl'll to pctyrn;,111, 111,, allocation of ownen1hlp rlghtli, th~ t, ,m,.t<-, ol r i•;k, and r1:w1u·ds, ,,nd acceptance by the culll:Omtr. ilrc: goods are often IIO!d with volurn,, distounl•:J pndnr1 ""·•·nliVilG tnd cw1tomm have a right to ,ijlur11 iliim,,,,.,<i ,;,, ,,x~lr~d product!II, Revenue from 1111tes iii bllsed on the price in the ules contraric./ MRI', Mt of r11,.rnunh. 11n;tor1c~I .ixperlence, speclffc contractual tt•m,•; a,111 future <:xp<ltt<Jt11w11 of !llllllil ire UNd to utimate 1nd provide for damage or expiry claims. No elrrn""I 01111v111<ing is dfflt!med present u the 111111!1 tw 11,;,1JQ wil:h tM rnJ1111iJI rred,t t:erms ~, per Pfll\llltnt tradl! practice and credit policy followed by ltw• C1rnup.
b Service In;:(!mt1 Service income Is recognised "" pc, IN, k1nh or contn,ct, with the cultOmer~ wh~n the relat,,d ,,,,,vtcfl are p,,rforn,cd a,:. pnr the stage of compltltian or on 1hr: achievement of agreed mileston""; ,u,,1 ""·' ,,et ot indirect 1ox1JS, wherever applicable, For the \It"" ,,rnforl March 31, 1018, the G3roup was recognli!lng revenue as pc, !Ill' rrikti.i'.. l)HlVlik·d in Tnd AS 18 '1Revenue, Rec0gnltio11'i, Noli· }(r;) f/.SkpilGc,1111 ,i((ot,llltin9 pohcit~ for Revtnue Recognislnq'1 (,111 lit' l('r(•rn:•d in 0-.(• flli'v'i1)U$
year's /\r11H1,il H·po1\ o! th1? Group. 8 Goods ;md ~){'!VI((' f ,I)( f(~()T] t, 11ot rE!'C<!!iVOO by the Group 011 its OW/l ('l(cmmt l{,1!l1!'1, !l !', 1:1x lOll~dffld on value added to the gornb by llw C11rn1p Oil lwh,111 or th<:
government. An or ilu 1qly, ii 1', vx1 luded from r~venuie,
C: The spcu!1{ n'roqnit,on t nh'.rtd 11t,scrlbed below must also be met b('ftl!i; rc•w~nu,· 1:., re( rnJiw.,,cJ:
.1 Interest Im::ome: For r11l rid)! 11)~;trn1111'nt:. nH'<l!iured at amortized cost lntt1mit' Hl((1n11• i·, 1c(o1dc•d us:ln~-l Uw 1·11fective interte.~l rabs: [EIR], EIR it, Ilic 1,1tt· Hi,il r·x;1dly dhtU~mf:~ the e~;t1mr1t(·d f11ltH1 · ( ,1:.11 J)•-1ymnnt~ or receipts over the expected h1t' nl tlH' f 1n,11H-1dl in);tru111f'11t ,w a shorter pariOd, where approprtdlt\ t<.1 l!H' (JI{)'-'; t ,)1 rymg <':1n1ount of
Lile fin.JncJ.il ,y,,,r,1 rn to thn amortl~ed cost-of a finan<:ial lit1bihly. Wlwn c,.iluil;il!nq llH-' 1,tfcci:ive lnb!test rate1 the Group e$lini.it«", !lw 1•xp1,f!r·d rtl!iih flow'., by consid121 inq ,.ill t!1t · ( 01111,a tuJI t:e:rms of the financial instnHrienl b1il· u,11•', 1101 u)n•;ul1'1 tlu•, ·x11<1Ct~I crndlt losses.
b Dividend: Dividend Income Is recognised when th,:- Group's ,•ighl 10 remve the p~yment Is established, which Is generally when sh<11eliolders approve the dividend.
c Other Income: Other Income is recognised when no siqnificant uncert,11n1y as to Its determinatlon or realisation ,,,isl<;,
6 Government Grants: A Government grants are r<!(()Qnised 01 awml1111u· with th" ,.,rm, of the respective grant on ~ecrual bilsl'' co11sr<l<',r111!J tM st,tu$ of (0111pllance of prescribed conditions ~nd
ascertainment that the grant will be received. B Government grants related to revenue are recr)gfll•,cci on a syr,;t~mauc and gross basis In the Statement of l'rofit and Loss ovm the period during which the related costs
Intended to be compensated are Incurred, C Government grants related to asset,, are mCO[Jl1i9'd as income rn equal amounts over tht expected U'«eful life Of th@ related asseL D When loans or ~lmil~r a~~l!rt'ance arc provided by governments or rl'lal'M ln'ltltutlons, with ~n ln~ro.t rate below the current appl1rahlt' mark@t rate, the efl'i'ct of this
favourable int.t!rc'.,t i:; n'.~Jdrdcd JS a governme11t grant, The loan or ,.1','il'il dncc 1s 1111l1c11ly rt)Coqni':.it)cl and measured at fair value and the qov(:rnmenl grant is mt:i.lsurl~d as the difference between the tnitiol carrying value of the loe1n and thr• prrn:r~eds rr~cc1vl'd. 7'1lt-: Jn,in is subsequently measured as per- ttw d{(01m1tn~1 polity i!pplw,1blt! to financial llab1l1t11,•,. I lowcvcr, in accordance with the exemption as pc, J11il A", Io I, lor ,,,,, Ii lo,,ns tt\Jt exi~ted on April 1, 2015 the Group "'""• Iii<! p!C•v,ou•, t,MI' Cdirying amount of the 10,,11 di tile date or transition as the carrying amount ot loan,
7 Talre$ on lnco,n.,, Tax expenses compnse of current. and deferred tax.
A Current Tax: a Current lax is rnei:.lsurc:d tJl. I.he amount expected to be paid on the h,:1s1s of rr:l1rfs and dC'tluc11ons available in accordance with the prov1~_,1ons of tht: Income Tax Act,
l'.Jul. 1 he tax raLes 21i1a tc1x iaws usect to compute the ali1ount dn: those tt1dt ;;re ~nactt•rl or c-,ubstantlvety enacted, at the reporbn~J (ldl<'..
b Current lax ilcms are recoqnised in correlation to the underlvinq tr'-m';,-icilon (~ith(;r m SL-1temcnt of Profit and Loss, OCI or directly in equity. B Deferred Tax:
a Deferred tax is provided uSing the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
b Deferred tax liabilities are recognised for all taxable temporary differences, c Deferred tax assets are recognised for all deductible temporary differences Including the carry forward of unused tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it Is probable that taxable profit will be available against which the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be utilized.
d The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred rax asset to be utilized. Unrecognised deferred tax assers are re~assessed at each reporting date and are recognised to the extent that It has become rrnbahle thar future taxable profits will allow the deferred tax asset to be recovered.
e Deferred tax assets and liabllrtles are measured at the tax rates [and tax laws] that have been enacted or substantively enacted at the reporting date and are expected to apply in the year when the asset is realised or the liability is settled. Deferred tax items arc recognised In correlation to the underlying transaction either in OC! or directly in equity.
g Deferred lax assets and deferred tax liabilities are offset If a legcllly enforceable right exists lo set off current tax assets against current tax liabilities. C MAT Crgdit Entitlement:
a Minimum Alternate Tax [MAT] paid in a year Is charged to the Statement of Profit and Loss as current tax. b The Group recognizes MAT credit available as an asset based on historical experience of actual utilisation of such credit and only when and to the extent there Is a
convincing evidence that the Group will pay normal income tax during the specified period i.e., the period for which MAT credit is allowed to be carried forward. Such asset, if any recognised, is reviewed at each balance sheet date and the carrying amounl is written down to the extent there is no longer a convincing evidence that the Group will be liable to pay normal tax during the specified period.
8 Property, Plant and Equipment: A Freehold land is carried at historical cost. All other Items of Property, Plant and Equipment are stated at historical cost of acquiSition/constructlon less accumulated
depreciation and Impairment loss. Historical cost [Net of Input tax credit received/ receivable] Includes related expenditure and pre-operative & project expenses for the period up to completion of construction/ assets are ready for its intended use, If the recognition criteria are met and the present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. The carrying amount of any component accounted for as a separate asset Is derecognised when replaced. All other repairs and maintenance costs charged to the statement of profit and loss during the reporting period In which they are incurred, unless they meet the recognition criteria for capitalisation under Property, Plant and Equipment. On transition to Ind AS, the Group has elected to continue with the carrying value of all its property, plant and equipment recognised as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plan and equipment.
B Where components of an asset are significant in value in relation to the total value of the asset as a whole, and they have substantially different economic lives as compared to principal item of the asset, they are recognised separately as independent items and are depreciated over their estimated economic useful lives.
C Depreciation on tangible assets is provided on "straight line method" based on the useful lives as prescribed under Schedule II of the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. However, management reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future periods.
D Depreciation on impaired assets is calculated on its residual value, if any, on a systematic basis over its remaining useful life. E Depreciation on additions/ disposals of the Property, Plant and Equipment dunng the year is provided on pro-rata basis according to the period dunng which assets are
used.
F Where the actual cost of purchase of an asset is below INR 10,000/·, the depreciation is provided l!l> 100%.
G Capital work in progress is stated at cost impairment loss, 1f any. H An item of property, plant and e initially recognised is derecognlsed upon disposal or when no future economic benefits are expected
from its use or disposal. Any f the asset [calculated as the difference between the net disposal proceeds and the carrying amount of
the asset is included in the i :;;d::::er:,::e:::cog=n:::ise=d:... ---------------------------------------'
255
• -_,dft~'.--1nt Au.:ount1_ng_"f:'-,~J!~fi(• .. ~~ co __ n __ tl_n __ u __ ed __ : __________ _ I lnt~tlu•hle A.-.~et<.:
A l11!_,111q1l,I(• .i•,,,!'I•-, ,1cqt1111 ·rl ·.qi.J1.i!f1ly ~re mtiltttured on lnitl.t1I recogrut11m .it { 11·.t 11w !.(,·,L c:if 111t',,1!'11111Jla in business I nn1t1111.-1l1(111 1•, thdi f,1ir v,_1hs11c ,J!. the d,-1!1· or dl(jlll'.",lllllri. fnll11vv1(1q 1nH1<1I i"t?CognltiOfi, int.angible urn ('.,)lfl1'1.1 ,1t I {I',\ h•'.,', ,·111y di r utrnitated an1,mti1mlcion IJ'IOd ICCUIYlUl/lb'.d 1rni1,11J!ll ◄ 'lll l<r.'.◄"
I Inl ◄ 'nMlly qerwr;Jlryj llll,l1lfjl[lh" not t.:flpltali!'™d and the rnlt'!kd t'Xpi'lHlit1111· I', tdl,·1 !1·d Ill •,1.-1ternonl or profit and IOS8 in th~ p,mo(l Ill vvlw 11 \Ill' t_>X.pPnrhl11n~ Is ir1( lffft'(L
(: (;,(!{ldWlll ,:irJ:·;Jnq on ,I( !jUhlllt1n tl l)U§fOf;'\;~$ itJ HHW!<JOO at t'."~ch txdari, I' ·.tw!'l 11.tb:l: h:11 .111y 11:q1,11111:,·1il lots, o rechnlcal Know-how Fees and oth,,, ,,,n111,11 rn,1ht,; .;mortised over their estimatll(J 11COnomlc llfll, ~ C!lpltallsed cost Incurred towardt µqoil,,·,,.•J d!,v,,lopm~~t ,,,11w.1re Is amortlsoo umng 1tr11gnt lln.i 11,c11ir,,.1 ovr,, ,ts u~eful hf~ ,'lltlmated by the m~nagement at t!1c
time of capll:llllsatlon, I' lnt,mglble assets with Indefinite "'"·'Ii" liv,,•; nut ;J1Mrl"o<J, but are ti!tted for Impairment 1mnu,1lly, ,·1!1101 1r1thv1dually or ~I tile cash•g-atlng unit level, iM
us11essment of Indefinite life Is rl!ll,,,wt;,l ,,nnq,llly 1<, ,1<;1rn111111•· wMth;,r the lndoftnlte life con~null!I to hr• ·.11ppo11<1t•h•. 1f not, t.hr· !l1ange In ulll!ful life from lndefinltij to finite Is made on a prospective bllr,b.
G An Item of intangible asset Initially rle11·r 09,,,,,.,1 ,,non dlSJ)Olllll or when no future ecot1111111t benefits are expc,ct,·d trom ll:li U$ll or dlSl)ONII Any gain or lo~s arising on de-recognition of the 11;-;,1\ ~•, the drfh,t,/<1U' between tile net dl9Pot111I proceet1•, m,c1 the ,anying ;m,nun1 of tNI a•tl 11 included In the lltil'.tlmt:nt of profit and loss when the HNt 11, ,1<,,,•n'kJ11becl.
111 Research and Development COtt1 A l:'xpnndltur0 nn rccr•.,rth :1n11 d,,v0lopm~nt is charged t-0 U1~ Staeem,0 nt nr rmr.t ;,nrf I me nf 11',c y,,.,r In whteh It 1• incurred. I C,;1p1tal expl'nd1lu11 • on H",<'i-ut h ttnd d1;1vtlopment Is given the samt! tn·.1!1w~n1 ,v·. P1(1JJ1 ·ity, 1-'l,mt ,1nd E:quipment.
11 Borrowing costs: A 8oi1owimJ co~,,,, 1.rn1,;1•-,1 01 m!(•t(,.,1- and oth@f' borrowing costs that lllt' 1ncurr<~t111111l[u11·1 !11)11 w1ll1 tl1C borrowing of funds, Other borrnw1r1q c_(1:~l::, m(l!H11· .11H 1ll.11y ( l1,1rgC$
at tile linlC\ or dC(Jlllf;!tl()f) n( d f111<111Cial liability, whit:1'1 is recognised. per f;"Il{ nidho(L
IJ 8011ow>11q w,1•. 11\at diw<lly llltrlbUtllbl~ to tht i!CQYISltlon/ C<>n<,1111111011 111 n q11,1lrfy111\1 .y.,,..r .ire capll:allsed part of the C<ISI ol •,11<:h ,,,:,.,,1•:, "I' Ir, II»· rid,.• tile a~,:;1.'ls circ 1c,1dy for their inlt-•1alcil use.
12 Expenditure during the Conslrncb<1n Period, 'The (~xpcnrlil.un,, 111nd1•nL---1l lo !lw expantion/ new projecb:: 1,1r~ ~llott'1tcd lo !'1opl·tty, Plr1111 ,111d 1-qu1pmo11t 1n the year of commenc@rtlttllt or llw 1 0111111\'H 1sil prnduchon,
13 Impairment of Assets: Tli~ Property, Pl,mL •ml L~111µ111~nt and Intangible M,et!< M~ te$1:~d lor 1mµ .. 11111<.11L wli~11"v"1 "v~11Ls or changes In rlrc11n,,t,mces in.:Jl!.:lllc u,.;L u,~ w11y111y wrnuunt ,nay not be recoverable. An Impairment loss is rnco911iscd for the, """"·",t by which the a•t's carrying amount ®<C1~ecb its recover;Jhle amount. The recoverable amount Is the higher of an asset's fair value less rnsts of clispoiwl ~nd value 111 us,1, For the purpOHs of assessing lrr1pi111me11t, the asset, at<: g,ouped at the lowest levels for which there are separately Identifiable cash ftows which are largely indepmclr:nt of the Cl!Sh inflows from other asseb or qroups of assets [cash qeneratlng units]. Non•ftnandal IS!;els other than goodwill tllat suffered ,m ,n,pc,irm,,nt loss are rew.·wed for possible reversal of impairment ot the• end of each reporting p,1riod, An Impairment loss Is chllf!Jcd to the Statement of Proflt and Loss i11 the y,,:.11 111 which "" ,,ssct IS Identified as Impaired. 1'he impwrment lo·,s recognised in prror accounting period Is reversed If tn<:rc has been a change In the estimate of recoverable an111unl.
14 Business c:omblnatlo11s and Goodwill, A Business combinations are accounted for using the acqu1sit1on method, B At the acquisition date, the Identifiable assets acquired and the llabllltles assumed are recognl&ecJ at their acquisition date fair values.For this purpose, the liabilities
assun,ed include contingent llablll11cs representing present obligation and they are measured at their acquisition date fair values irrespective of the fact tllat outflow of resources embody11)(J ecrn1on11c benefits is not probable.
C Wh(m the Group dCquirPs a businns!'i, it assesses the financial cl$$et~, dnd lk1bd1t1c:; as:,um(..'CI for .:ipproptlate classification and designation m&cordeinw with the contractual t.cn11',, 1.•c.nrl(J111ic circumstances and pertinent conditiom, <.1', ,,t tt1c ,H:(1u1',1t1011 c1,11e, fhls includes the separation of embedc!ttl ck'nv,1tivr-:;, 111 IHd c,ont.r,Jcl:; by the acquiree.
D When the Group dn1uires d hu~;iness, it assesses the financial ;;i,;sel:5 and habrl1tic:, d">'-,urncd for appropriate classification and dcs1gn.Jlion m dccrnd,-inrc w1t.h the contract:ual terms, CLonon-iic u1curnstanCel) and pertinl:mt conditions ,;11 Um ;;icq1w,1t1on datl',
I Goodwill is initially meJsurccl ,11 111e excess of the aggregate of the Jcquist1on cost Z·rncl the ;_umiunl n~cognised for non~controlling interests, ~md .1ny prcv1rn1'; mtert•st held,
ovf'r th1-' hr011p's m:.t: id<:.>nUfi,:-1!.'ir.' c1ss:ets acquirud and llabiliti@s lti£t1m(1d. Tl tho foir v:Jiluf) of th(' n(it asseats acquired Im in 0xc0es of tho ;1q1J111f_pt.u of ~1cqui:,il.ion cm.t, thta Group re-assesses whether it has correct1y identified all of the asseb, acciuin.'d ~ind c1II of lhi? !i,:1lnhtics assumed ;,nd reviews the procedures used t.o rncasur<: the amounts
to be recognised at the acquis1tron date. F A cash generating unit to which Goodwill hds been allocated Is tested fOr Impairment annually, or more frequently when there rs an lnd1cat10n tnat the unit may be
impaired. If the recoverable amount of the cash generating unit is less than Its carrying amount, the impairment loss is allocated first to reduce the carrying amount of dMY Got>dwlll allocated to the unit aM then to the other assets of the unit pro ratil based on tM carrying amount ot eacn asset II\ the unit, Any impairment IMS for Goodwill ls recognised In Statement of Profit and Loss.
G If the fair value of the net assets acquired is in excess of the agrwegate consideration transferred, thP r;rn"n m-asses'ifes whf<ther it h~s correctly Identified all of the asset.s acquired and all of the liabilities ossumed and reviews the procedures used to measure the amounts to be recognised at the acqulSition date, If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised In OCI and accumulated In equity as capital Reserve. However, if there is no clear evidence of bargain purchase, tne entity recognises the gain directly in equity as Capital Reserve, without routing the same throuqh OCI.
H If the initial accounting for a business combination 1s incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. ihose provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities arc recognised, to reflect new information obwrncd about facts and circumstances that existed at tile acquisition date that, if known, would have affected the amounts recognrzed at that date. These adjustments arc called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
I Wherever any business cornbludlion is governed by the Scheme approved by the Hon'ble li1gh court/ National Company Law Tribunal ll,CL rJ, the business comb1na11un Is actounlccJ for ;i·; rrr thr ;1:r:r.011nting tn~c1trnent sanctioned in the Scheme. tloodw1ll Jris1ng on such businesi combination is amolti$¢d over the period, J,; prnv1drd in the Scheme, as approved by the Hon'ble High Court or NCLT.
15 Inventories: Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition arc accounted for as follows:
A Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods, Stock-in-1'rade and Works-in-Progress are valued at lower of cost and net realisable value.
B Cost [Net of Input tax credit availed] of Raw Materials, Stores & Spare Parts, Packing Materials, Finished Goods & Stock-in-Trade is determined on Moving Average Method.
C Costs of Finished Goods and Works-in-Progress are determined by taking material cost [Net of Input tax credit availed], labour and relevant appropriate overheads based on the normal operating capacity, but excluding borrowing costs. Net realisable 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. Write down of inventories to net realisable value 1s recognised as an expenses and Included on "Changes in Inventories of Finished goods, Work-in-progress and Stock-in-Trade" and "Cost of Material Consumed" in the relevant note in the Statement of Profit and Loss.
16 Cash and· Cash Equivalents; Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less.
17 Leases: As a lessee: The determination of whether an arrangement is [or contains] a lease is based on the substance of the arrangement at the inception of the lease. Lease under which the Group assumes potentially all the risk and rewards of ownership are classified as finance lease. When acquired, such assets are capitalised at fair value or present value of the minimum lease payment at the inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expenses on straight line basis in Net Profit in the statement of profit and loss over the lease term, unless the payments are structured to increase in line with expected general inflation to compensate lessor's expected inflationary cost increases.
As a lessor:
Lease income from operating leases where the Group is lessor .is recognised in income on a straight line basis over the lease term unless the receipts are structured to
increase in line with expected general compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
256
No ; i II !!!!!~·mt Accounting Pollcli;!.~ > COl'!!'!!!<odl ,~,-, ii Pf<lvi;.ions, Contingent U11bmt11111 1111<1 cont1111111nt Aoi;:t,,
A r>rovi~lons dre recognled vvh,:11 th,, umup hH a presen1 11bliq,11tm a result or pa,,1 ,Msrlb """ ,t Is probable that th,., ou111,,w of resources will t,,1 rll{!ui,ed to settle the nhllgatlon dnd in resP«t Of Whl< ,, o>!labl~ esumatl!s Cllt1 '"' ma,iv A dliCIO~Ul'I! l'Or cnr,Un~i,nt h,if,,llty iii made wh,•n lhi;f(! IS posslblll obll9at.11m, that trwy, but probably will not require an outllow of 1 ,,,u,.11,,c,,, Whan th!!re Is pei$~lbl~ 11l<l!Qatlon or a Pi'lte<J ,t 61,1,~;;tion In rupect elf whi\11 the llktlil\Ood of outflow of '""""'"'~ it rtmobl, no Pi'(.JVision/ di•,(lry_,\I!<_' I', made, Prnvliiilor1•, ,·111d rC1(tlH11~0nt!IJ!t ;;lrEl; f~Vk;w1·1I .Jl t::dCh badance 1l,1!1• i)f11l ,!dj1J%t~ to rtt!kcl 1111- (()![t!(t mun~geme11t (·;,l1111d\l'')
C.ontlngent d':,d•, ,wo w11 recognl§:t;tci but ,11(· r1,,,\ 1,p,(•rl ieparately in fln,)1111.i1 ·.1,11t;t11l"!IOO,
I) If the effect ol t!1c 111rn·• v,,duc of money in.1k11. ii, prt1viS¾lons mre di~(n1111nJ u',11H1 ,l current prn~tJl1..: 1._ifp 111,:it 1dled!t when apprnpi 1,111 ·, th<-· dsks specific to U11 · !t,-1h1!1tv
19 P1'0Vl$IOn for Product I·, pny Cl11im11 Provisions For product ex1,11v ri'luttd c<lSII are tGCOgn1•.,cd when ll1i11 product la !IDld v, 11,,, cotlOl!lllr, !nltlal rct•>\llillli•II ,,, l)illed on hlstorie,~I ~'l<pc,11:r,<:e, The 1niua1 estimate 01 product expiry rlw,11 ,c,lat~d ,:ollts Is revised annwilly.
20 l!mployee llen11flts1 A Sllort term obllgatlon,:
Lii!bililie, f<Jr wMges ~nri "!Jlori,,s, it11;ludln~ l••v- ~ncA,hmw,l:. U1dt: al'~ ,.~,wt...-! tn be $6lltcd wtiolly within 1? month~ .,1t~1 lll~ """ of th• f"'nuci In which lM mmployrender the 1ddt1•d ',!-'!Vlt,.t:' ~re recognisttd Ill l(",jlt'( t ol (}mplnyc.~1 SeJl'\IHJ'.:& tlp In 11)1' end of tht'l rtp1.._lll1nq ,Jl](I measur&:1 ay ttw ,lfll0lJ1lt', l'X'peci:ed to b~ p,,wJ wli ◄ •n 1he liabilities an.: '.->1'tlh '(I. I l1P liablHtie, ara Pft";t•nl(:<) .1·,, t11 rent ~rnployee !u-n,-'ftt. cJ!Jlu_J,1!Jon11- In the- bl1!llH i • ·.!1(•10:t.
$ Long term employee h .. n,flw obllg111,ons: II Leave Wage" an,1 !lid< Ulillllll
The liablll~es for tlllrned lv;,v,, ,ind sick leave are not to be Nl:tled wholly will"" 12 months p!l!l,o<l ar1.vr l11e end of the per,od 111 whirl, 1ne employees render the relatl!d !Milrvl~e. Tlwy Ml! therefore, at 1 l1e pl'IIHnt value 91 expc,:t,,;<J futul'II paym,ml:!l 10 1111, 1n11d~ in respect of Ml'\lt,"5 pr,wi(lecl by llfflployeu upto the end of the ,,,porting pc,lod using the rHnjc,cted unit credit meth!l(I, ct,,1.,,rn111111d by actuarial valuulion, purformed by an independent tc:l:uary, The benefits are dlscounh'd u1,in9 the market yields at tt111 '""1 ,,1 rl!!portlng perlOd thill h,M1 the terms approximating tu I hP term$ of the related obligation, Gains aml losses through re•mt,asu1crne11ts ,we rl!CO!lnled In staten""'' of proflt and loss,
b Defined Benefit Plan,: Gratuity: The Group opi:~1r1tP~\ a defiof!d be111'!1t qt.JllJHy plan with contritHJt1w1•, ln h!_' made to a .-ttJrnm1stared fund th1oufJtl Lile' tnqJrtmte Corport1t1nn ol India through I 111ploye0, Group Gratuity ,,1,11,. 11,,. 11,illility ~r asset r<-<n<111ic.i;il 111 Ille ~alanee '" r,,spe,1 nf defined bene1,1 qri1l111ly plc1n Is the presen1 v,1h1,, nl the defined benefit plan obligation al the md of the report,nq peflod less the fair v,1lur• ,,r the pktn assets, The Liabilili0s with rngard to the Gratuity Plan are determinoo by actuarial valuatlon, perform,,cl by an Independent ,Klua1y, at tlllch balance i,t>o(')t d:itc uw1g the projected unit n,,<1it method,
The present value of thv rlel111NJ beneflt obligation c1,,nom1na\ed tn INR Is detc,rmlned by db,counting the er,t•irnatvd Mw,1 cash outflowi 1,y reli!rence to the market yields at the reporting pc,notl on government bonrb that have IHrms approxll!llltih9 to the te,ms of the relah:d oliligallon. The net Interest cost 111 ,;;ilculated l>y 8pplyinq thu ct1scou11t1ng r~tt> to the net balall(;c of thi;i dMflnM henAf1L ol1li9iltlon and the fair value o/ plan <lSStts, Such costs are indudnl in employee ben~flt e>q wn:>r":, in the statement of Prof11 ,ind I Re~mt\1'.;urcmcnb q,Uns or losses ansmq 11rn11 c•xperience adjustn1t1nb 11nd < 11.Jngtis in actuai1dl <1£;surnpt1rn1s ar~ recogniSPd 1111rncthdli'lY in the period 1n wh1d1 t11ey occur tlircctly in "other compreh0n,;iv<: 1n<.ornc," and are incllKkd in rctd111ed earnings iri UH-· ,,t/1k'.11!l:11t of changes: 111 cqu1t:y anCl in the balance ~heel. l{c~
measurement~, ..ire not n;classified 1o profit: Of l(v;'i in subsequent pcl!Ofk
The Gr.oup recognise,; lhc, following cnanges 1n the net defined benefit obligation"",,., expenR In the !lt'llten,ent of pront and loss: i Service costs comprising cummt service costs, past-service com, gains and losses on n1rtallm~nts and 110,1 routine settlements; ii Net interest expense 01 income.
c Defined Contribution Plans • Provident Funt! Contribution: Eligible emp1oye$ of the Group rPc,,lvP benefits from a provident ftmd, which Is a defined Nlntrlbutirm plan. Both th@ l'ilgible Pmnloyoe anti the Group make monthly conlnlJ,,lions to the provid<'nl fund pl;,n equal to a speul1ed percentage of the coverr'!I cmployc"'s salary. Amounts coll"ctc,J lll1der the providcnl lund plan are deposilcrl in a rJovernment adn11111stered provident fund, The ,;ro11p have no further obliqdl1on lo the nlan beyond its monthly contributions, Such con111bulions are accounted for ac, defined contrihu!Jon plan~ ,ir1d are recognised d'.; crnplnyees benefit expPw,cs wh('n th<ey are due in the .:;ldlnrn_,nt· of profit and los~ ..
C Employee Separation Costs: The compensation paid to the employees under Voluntary Retirement Scheme is expc,nsed In the year of payment.
21 Dividends : Th~ final rllvidend on sharc·s ;, r~cordc,d iii a liability on t,he elate, of approval by the nharcholdcrs and Interim dividend is recorded as liability on the date of deelmration by the Parent's Board of Directors.
22 l!xcise Duty: Excise duty is accounlccl at a concessional ,ate as per Notification No. J/1011-CE without availing CENV/\T credit in Zydus Wellness um,lcrl, whereas In the Partnership Firm same is accounted net of recredit benefits and CLNVAT availed on mputs, Cdpit.al goods and eligible ~crvkc:;;,
23 Financial Instruments: A financial l11sl.ro111eol" dny contract that gives rise lo a financial assel of one entity and a financial l1ab1l1ty or equity instrument of ,mother entity,
A Financial assets: 11 Initial recognition 1md •rnias11rement;
All financial assets are recognised Initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attnbUt~Ole to the acqu1s1tion ot the financial a5liet. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place [regular way trades] are recognised on the settlement date, Le., the date that the Group settle to purchase or sell the asset.
b Subsequent measurement: For purposes of subsequent measurement, financial assets are classified as follows:
Investment in mutual funds instruments at fa11 value through profit or loss [FVTPL]; FVTPL ,s for investment in mutual funds instruments. Any such instruments, which does not meet the criteria for categorization as al amortized cost or as FVTOCI, is classified as at FVTPL.Such instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
c Derecognition: A financial asset [or,'where applicable, a part of a financial asset] is primarily derecognised [Le. removed from the Group's balance sheet] when;
i The rights to receive cash flows from the asset have expired, or ii The Group has transferred Its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay' to
a third party under a 'pass,through' arrangement; and either [a] the Group has transferred substantially all the risks and rewards of the asset, or [bl the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, 1t evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group's continuing Involvement In that case, the Group also recognises an associated liability, The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained, When the Group has transferred the risk and rewards of ownership of the financial asset, the same is derecoqnised.
d Impairment of financial assets: In accordance with Ind AS 109, the Group applies expected credit loss rECL] model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a Financial assets that are debt instruments, and are measured at amortised cost b Trade receivables or any contractual right to receive cash or another financial asset c Financial assets that are debt instruments and are measured as at FVTOCI
The Group follows 'simplified approach' for recognition of impairment toss allowance on Point c provided above. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it requires the Group to recognise the Impairment loss allowance based on lifetime ECls at each reporting date, right from its initial recognition. For recognition of Impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a significant increase In the credit risk since initial recognition, If credit risk significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has Increased significantly, lifetime ECL is used. I redit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the enti ,-,.-"---.'---.::~ _..,n.-t_lo_s_s_a_ll_ow_an_c_e_b_a_se_d_on_1_2,_m_o_n_th_E_CL_. ___________________________ ~
257
~nJl'llfla.nt Aoo,;,:~1m9 rolidlMl • Contlnu.,,1, lifetime ECL are the expoc\1•1l Cl<:dil ln?l!!S re~ultlng from ow" Ille Ofl 0!1011< r,JI lnshument. The l:!:month CCI Is a portion ot 1tld1rnu ECI_ which results lrnrn d~l11u11 ,·vents that are po:;sibh, wrtt,in 12 months aft,:r II"' r;;portnig date eCL Is l.h~ dilh·r,·nrn !Jetween all conln>rtu;1I v1sh Mow, that are du" to tile Group In accortJ,.,,1,, wilh r11,, contract and all lh•' 1<1•,h nows that the entity 1,, r11Celv1 [I.e., all ',ho,trc1lbJ, discounted at th" original Im~.
rn. lmp,mment loss allowmKf, 101 mv<1r&al] presentation for v~rln11, n11uncl•I ,n,ttumcnts
dum,9 th,· period Is re<:oq11i;;<;(J
b~low: Financial ci$',(:h JIICd'.,lHt'd at /;!Jl!Ortlt,cd ( (J',,! ,111rl ( (lntractu61 reVE"Hl!l" H '! 1 'IV,ii:Jlt"1$; ECL ii prer:#t'nti·d ,1'1 ,•ill .Jli<)W-Cmt~ I
those asset,,; Ill llH• btilnll(:¢ sheet, which l<'ri1J11", !!11• net u&rrylng ilrYi(Jlllll, llr111I H11; ,,~t moo~ Vc'l!II' off (!111'11,'lr the (itoup the gross c:t111y1111 1 ,1111rn111L
t,·. an 11111•(_11.11 pt1tt of th@ rne.1•,rn1 111w:01 pl
111i1 n·dtKi· lmpairrn~nt t1l11lw,1(11t fron1
For assesslny 1t1t.1t:.i·,( · 111 1:redll risk and i11qJ,111ni1 ·nt 1o- .. ;, the Gu1up C(J11ii)111( ,, 1111,,mr lal fn$\:rqm0nbr un Ow 11,1',J', of :,:;hared credit 1P,k ( I ,~ir,1< 11-11itiCZ,
II Financial llablllti11111 a Initial recognition and mi;,111or<1111111nti
Financial liabilities arr, dao»l11'<i, at Initial recognition, ,,,, fin,lllclal llabllltles 11 '"" v~lue lf1fough profit or loan', and borrowlngi, p'1y'1ill<"<, as derivatives designated a@ hedgl111, h,®lru11K•nl1 In an el'l'eci:lvc, l1N1<1c, appropriate. All li11,,.,dai 111,L11lltles are recogniiei1 11111,"IIY ~t fair valoo and, 111 tr10 rn,,c of lilllnl and borrowlnn;, ,md p.,y:ible!I, 1111t of dirrrtty :;ttrihut,Jbl~ lT•nsact1011 m,t,,
b Subsequent measurement: Subsequently ,111 !111.tncial liabilities .iw rnt1tN11 ( ·d as !l!trl(irtised co•A 1'x< t!pl lot t ... oans aod borrow1n(r., :--Vi tlt,".(rlbed below: Loans and borrowings: After in1U~1l rw:OiJniUon, ihtijr~t..,btku'!n\J k.1,-1":., und borrowlng1 at\.; :.,uli'.A.:LjucnLIY me@sured at i1rnmu:,i<_:U uJ:;:t u%.ifl9 the EIR t11t-.'.t!V1"'l- Gdi!IS and 10$$@$ at(· 1i,u.1j)ni½t'tl 111 profit or loss when tile lidh!ht,e, are derecognb,,,.1 well as through thf, c!R amc"t,saHon process. A111or1.1sc-d cost Is c:alculated by taking Info account any discount or premium 011 <ltqui;.,1,nr1 and ms 0t e<>•;l•, Uiilt ~r,, ,.in ln~ral part ot 11w, i'.JK, Thi!! E!R amortisation ,,, included as flnance C:O$l$ In lite, ,,tatemant of profit and loss.
d Embedded derivi'ltives: An embedded derivative Is a component of a hybnd [co111bmed] instrument thdt "1,;o indU(lt·s a non-derivative ho,,t contract - with the effed that <;()trJe of the cash ftows of the combln1.,n l11!itrun1cnl vary In a way s,nul,ir to a standalone derlvnuve, 1>erlv<1t rves embedded In ~II 01111,r host contracts are ac:countecl ltlr as separate derivatives and recordM "' fail value If their econorrnc ch,:ir,ictnrlstlcs and risks arm not <.10,!lly related to those: ot the 110,;t contracts and tho ho$\ contracts are not held for trading or de$iynatcd nt fair value th0Ugl1 profit or IMI!, These embt,dcled d,,rivat,ves are maasurocJ at fair value with changes in l,llr value recognised In profit or loss, unless dos,u11atet1 effective hedqlnw !nstrurn1,nts,
C Reclassification of financial asset:11: The Group dcte, rrnnes elasslficatlon of fli 1<.11H 1,.11 a~sets and li~b11it it:<; on imt 1, 11 recognltJon. Afl r•r irut1,d r r '(X!gnition, no rf:c l;-r;~;ificat1()n is madt~ for tl11,H1{ 1<.11 d";•;cts
which arc equity mstrument:; and nrwnci,.d l!<Jb1hties. For nnan{ kd w~;st1b which are debt lw;ITIHll!~llt';, rl reclassiflt::eition 1c; m,Klt: only if there is ! thdnrJc Hl the business model for managing thOSE' d'c.'-ids. Chr111qes to the bush 1c~,~; 1nrn1t~1 mti expected to bl' m111 ·quvnl".The Group's senior rndnaijt'n1nnt determines change 1n the business model as a result of external or internal chanyes which are s1gn1ficant to the Croup's operations. Such ehan9cs are evident t:o cxt!!rnal p,11tics. A change in the business model occurs wh,m the Group either begins or ceases to perform an acUvlty that Is significant to its operations. If the Group reclassifies financial assets, it applies the redass,lica\ion p,osped:lvely from the rcdassrflcatlon date which is the first day of the lmmc,liatcly next reporting period tollowlng the change In business model as per Ind AS 109.
D Offsetting of financial instruments: Financial assets and financial llabihtil:,; ""' ofh<'.1 arld the net ,irnount ,,, "'P<>rted in the bal;111"' sheet ,r there Is a currently cnforcr'Jble legal right to nlf•;d the recognised amounts and there is an 1nlentirn1 to ',ettle on a net ba,.,;, to wait'"' the assets an,I ,,,•\II<'""' hc1l)ilities simultaneously.
24 Fair Value Measurement: Fair value is the price that would be received lo s<'il an asset or pail'.! to tr,ms!c,r" 11,ibllity In an otCh'1iy 11,11i,,,1111on between mark,'I pNUc1panl:!; at the nieas,""ment dcrte, The fair value measurement is based on the presumption that the transaction t:o sell lhe asset or transter the ltabllity takes place either:
a In the principal market for the asset or liability, or , b In the absence of a principal market, In the most advantageous market for the asset: or ilablltty
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act ln their economic best interest:. A fair value measurerncnl of a non-financial asset takes mt.a c1ccount a market parlrcipant's ability to generate econornic benefits by using the asset in its highest ,mrl best use or by selling It to another market participant that would ,,se the asset in ,ts highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which suffioent data are available t:o rnca,;ure fair value, maximisin9 the use of relevant. observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in U1e financial statements are categurio€d within the fair value h1crnrchy, described as follows, ba!ied on the lowest level input that is significant to the fair value measurement as a whole:
a Level 1 - Quoted [unadjusted] market prices In active markets for identical assets or liabilities b Level 2 - Valuation techniques foe which the lowest level input that is significant to the fair value measurement Is directly or Indirectly observable c Level 3 - Valuation techniques for which the lowest level input that Is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on cl recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re~assessmg categorisation [based on the lowest level input that is significant to the fan value measurement as a whole] at the end of each repo,ting period,
25 Segment Reporting: Operating segments are reported in a manner consistent with the Internal reporting provided to the Chief Operating Decision Maker (CODM) of the Group.
26 Earnings per Share: Basic earnings per share ace calculated by dividing the net profit or loss [excluding other comprehensive income] for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year, The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element In a right Issue, shares split and reserve share splits [consolidation of shares] that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive Income] for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares,
B Standards issued but not yet effective: The Ministry of Corporate Affairs has is.sued Companies [Indian Accounting Standards] Amendment Rules, 2019 and Companies [Indian Accounting Standards] Second Amendment Rules on March 30, 2019, which notified the following standards and amendments to Ind AS applicable effective from April 1, 2019:
Ind AS 116 - Leases:
Ind AS 116 will replace the existing leases standard, Ind AS 17 Leases. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The standard introduces a single lessee accounting model, requ1n11g lessees to recognize right-of-use assets for granted rights of use and corresponding lease liabilities. However, Ind AS 116 contains the option of exercising exemptions for the recognition of short-term leases and those pertaining to low-value assets. The Group will adopt Ind AS 116 effective from April 1, 2019, the Group will apply the standard to its leases, retcospectively, without restating the comparative figures, On the date of transition, the Group will be using the practical expedient provided by the standard and therefore, will not reassess whether a contract, is or contains a lease, at the date of initial application. On the date of initial application, the Group will recognise a lease liability measured at the present value of the remaining lease payments , using the incremental borrowing rate as of that date and right-of-use asset will be measured at the amount equal to lease liability adjusted for accrual anr1 prepayment Initial direct oost, will not be taken into account in the measurement of the right of·u,c JilliCt il~ of the date of first time ilPPlii;ation, In accordance with the standard, the Group will elect not to apply the requirements of Ind AS 116 to short-term leases and leases for which the underlying asset is of low value, The Group is in the process of evaluating the impact of Ind AS 116.
258
G~Blo!:k: A~ at Mare 1, : 1,1017 Ad1liti1m~,
Ui:;prx,t1h
M at: M~rch 31, 2018 Acqui""d Sub$ldlaries
Addlllons D1\pr,l·rl'.)l,;;
Aft, MiHCh 31, 2019 O¢preciat1(", and Impairment:
Mal Man:1131,2017 D11p1ct1auon for the year Impairment for the• Y""' Dl9POsals As at Marrh 31, ,Olll
Acquired Subsl(liam•s Dl!pr111dlltlrm for lhe yew Impairment lor the yc~11
DlspO!ll,lfS As at March 31, 2019
Net lllock: As at Morch ·ll, 2018
As at March Sl, 2019
Note: 4- Intan Ible assets:
Pa1ti<:Ulars
Gross Block: As at March 31,2017 Additions Disposals As at March 31, 2018
Acquired Subsidiaries Additions Disposals As at March 31, 2019
Amortisation and Impairment: As at March 31,2017
Amortisation for the year Impairment for the year Disposals As at March 31, 2018
Au4ui1 t.:!U SulJSidldries Amortisation for the year Impairment for the year Disposals As at March 31, 2019
Net Block:
I IJ:1'!111ld Li?Qfif"hOld
1 •. 11,,.1 .IJW!
2,282
2,282
3,79,692
As at March 31, 2018 2,?82 As at March 31, 2019 3,81, 974
Note: For details of assets pledged as security refer Note 19.
r1Jm,1,<;urtld, Considered Good unless otherwis.' I 1xed o,epOfilits 'fot,11
[lJn$!)l;U[l•(I, ,:onsldered Good unless 0thl!!Wlst:
Capil:.ll /\dvances
Balllncei with :;tatutory Au(t1011t"''•
Totlll
Notl11 II • Deferred tax:
Particular,
Deferred Tax Liabilities:
Depreciation
othera Total
Deferred Tax Assets:
Employee benefits
Provision for Expiry and Breakages Provision for Bad and Doubtful Debts Provision for GST
f\.,, d!
/\p11! 1
(\Ill
541
84 24
(h.1r[]C rnr \l H' pr f'VH)U~i
y~
(142)
(?)
A!; ii March 31 A(;(fuired Suusrclr""' "·
2l!1ll
77
24
2,764 3
2 767
14
205 222
Provision for Vat Liability .H
Drsallowancc under sec 40(a)(ia) •B\l Rent Equalisation 3
Total 108 (7 101 917
MAT Credit Entitlement 6,065 J,613 7 678 l,G00 Net Deferred Tax Liabilities 5 631 1 7'18 7 380 , 0
8 The Net Deferred Tax Expenses of INR (3,170) [Previous Year: lNR (1,7~8)1 Lakh for the year has been clebited / [Credited) in the Statement or Profit and Loss,
C The ~roup offsets tax assets and liabrlities if and only If it has a legally errlurccable riqht to set off current tax assets and current tax llabllitres and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authorrly.
The maior components of rncome tax expense for the years ended March 31, 7019 ,.md M;HTh J l, ?0 J8 ;we :
Statement of rofit and loss:
Profit and loss section: current Income tax: Current Income tax charge
Deferred tax: Relating to origination and reversal of temporary differences Income tax expense reported in the statement of rofit and loss
Reconciliation of tax expense and accountin rofit multi lied b India's domestic tax rate :
Profit before tax
At India's statutory income tax rate AdJustments in respect of current income tax of previous years Utilisation of previously unrecognised tax losses Effect of Non taxable Income
Effect of Special tax deductions
Effect of Special tax deductions (BOIE)
Effect of MAT Credit not accounted for
Effect of Unrecognised DTA/DTL
Non-deductible expenses for tax purposes: other non-deductible expenses othera
60 GO
14,974
5,183
(62) (83)
(39)
(36)
(4,531)
1,089 (224)
16 10
At the effective income tax rate of [-0.35%] (March 31, 2018: 8.84%) 1,323 Income tax ex nse re orted in the statement of profit and loss 1,323
MAT credit of INR 4,991 Lakh that are available for set off against future tax liabilities have not been recognised and the same will be eligible for set off upto fifteen years from the year in which the same anses.
Note: 9 - Asset for Current Tax : [Unsecured, Considered Good unless otherwise stated]
Advance payment of Tax [Net of provision for taxation]
Total
260
Notti 111 • [The tnvt,111<wy l"l~ult'le•Umi or lnvcntorle,:
Haw Materials w0rk•ln•r,rogrns:: I 11\IShed Goods ',IO(;k•ln•Trade Oth~rn:
Store 11nd Spam 1\11k1ng Materials
Total
Note: 11 - current financ;,al assct,_•JnVffilbn1111t,,1 ..
lnvcstmont In Mutual Funds LQuot~iJJ [Valuoo at f,1l1 valu~ LluQ~Qh pmftt or lnssJ: Kl:1tak liquid Dn!let Plan Growth Rthancc, Liquidity Fund • Dlmc:t i'l~n Growth DSP Sl11ckrock I iquldlty Fund • 1)11 (•cf [>tan Growth
Total /\ /\qgregate amount ol quotvd 1t1v1%1tnents 8 Fxplanatlons:
In 11Nos. [*)" fiqur(':; ol pre'vlous year are ',\,ill ,{i lfl r ].
Not.a: U • Trade recelvablu: Unsecured • Considered good: Total
Note: 13 • Clish and Cil$h e ulval11nti11 H.-il,HK('S with Banks in Current A< counts
Cash on Hand Total
earmarked balances with bank for Unpaid dividend Fixed Deposit with banks (*] Total *] ror details of lien on rixcd De os,ts reter Note n
Note: 15 • Loans: [Unsecured, Considered Good] Advances recoverable in cash or 1n kind or for value t.o lw rc•ce1ved Total
Note: 16 • Other current assets: [Unsecured, Considered Good] Balances with Statutory Authorities Advances to Suppliers Other Receivables Export Incentive Receivables Prepaid Expenses Total
zy,h,;, W<dh111u Llmiuid .. Sl.-:tt.ementl -----
!,21,805[0] 012,15,132,11] o (3,!!7,105,158]
61 61
3,679 373
30
261
Nate1
I n,00,00,000 [a!,"' M,1(cl\ 1 I, 20111: 4,50,00,111111 I I 'I' "'Y
Issued, Sublltll"lbl!d llnd p;,id-up:
s,1(;,61,144 i"'· at M1rch 31, 2orn· -,,:m,n,oa9J e(Jlllty Share, of INR 10/· each lully 1Mid up
Th~ Reconrtlal 111n in number of L'qUlty Shill\: is as und1r: Number of' ch:ir,,,. nt tho bfiijtnning ,,t ,110 yc.,r Add: Shari••, ,,,,,,,,,,i ,1,,,1119 the y<lllr Number of ,-11,,,,.,, "' 11 ,,, end of the YM•
of lNR 10/
111e Parent has only "'"' ,1,,.,. of sho" ., t,,,virHJ ,, 1li!r v~lue or 11111, 11,1 ,·;,rh shar;:. ~,u,
C
l1older of equity ,,1,,,,,, ,.,,1,11,-d onf. vol:(I ·,1,,,,,. 1 he dividend ptapn,,u1 1,y 1tv• of Dlrtlcto,•, Is •:ut>j,1.ct to the approval of the sh111t•t101d1@·s In the Annual (,<111e,,11 Mlllltlng, ®!CIPI 111 th;; •\"'' of lntMm drvidcnd, ln the event of liqu1ddl1on of tM P1m1nt tile 11qulty ilh1re11,,,1,1,,r1 sh~II btl entitled to prop<1rtlonal:l! share of 11101r hold mg In the amits all11r dlstrtbutlO!'I of all p, ..r,,,riantlal amounts and all lillblllties, Det;.uls of Shareholder h<>ldinq more tlwn ~% c,f aqq""!•bo E~ulty SIM1Ca of INR 10/· ;,~ch
[as at March l 1, !O Ill: I Nf( 10f l!aCh), f11tly p:,«J'
Cadila llealtt1c.11 I' I 11T1il:OO
Number of Shares % to tol:lll mare h111<1" 10
Thrnpsl care LLP (Trur, North) Numller ef Sh,llUS
% to total share holding D Number of Shares held by HoldinCJ CnmpMy
cadila Hcalt11c~,,., I irn,t:ed
· ,te: 18 • Other equity: General reserve: [*]
Balance as per last Bala1K~ 5IHJel'
Fair value through other comprehensive income [MOCI] R-rve: Balance as per last balance sheet [Less]/ Add: [Debited]/ Credited during the year
Debentures Redemption Reserves: [**] Balance as per lasl Balance Sh,,et Add: Transfer from Retained Farnings Balance as at the end of the year
Securities Premium[***] Balance as per last Balance Sheet Add: Addition pursuant to Issue of shares Balance as at the end of the year
Retained Earnings: Balance as per last bal,mcc sheet Add: Profit for the yea, Less: Profit elimination of acquired business
Less: Dividends Corporate Dividend Tax on Dividend Transfer to Debentures Redemption Reserve
Balance as at the end of the year Total
[*] General Reserve can be used for the purposes and as per guidelines prescribed in the Companies Act, 2013, [**] The Group has created Debenture Redemption Reserve as per the provisions of Companies Act, 2013 and the captioned reserve has been created
out of profits of the company available for payment of dividend. '
[***] Securities premium is created due to premium on issue of shares, This reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Note: 19 • Borrowin s:
Non Convertible Debl!ntures:[NCDs] Secured[*] TOTAL
[*] Securities and Terms of Repayment for Secured Borrowings: (i) 9.14% Secured Redeemable Non Convertible Debentures [ with semi-annually interest payout] issued by creating a charge on specific brands of the subsidiary company,
(ii)The NCDs are repayable in three equal yearly installments starting from January 16, 2022 along with accrued interest for the period.
(iii)The outstanding amount of NCD as at March 31, 2019 is INR 1,50,000 [as at March 31, 2018 : INR NIL] Lakh.
Note: 20 · Other financial liabilities: Trade deposits Others Total
Nate: 21 • Provisions: Provision for employee benefits Provision for Vat accural Total
i----=-=""em•· ~.fl=n~cl h~no,flt pl.in ;;,,;I·,;,,;;, ;:,.,m A General description:
Le;,ve Wdgc, I Lmu1 lrnln <1mploym111rtt benefit], r h(! lt.."tlVt· ! 'I!( ,1':fu111 ·11! •.1 !t(%f1l~ lldmlnl1ter<0ci through Llf;·, f n)-,111,inu_· ( {_11 pl 11,111,111 , ,1 Group Leave Efne:,1~.1111w·n1· 1 u111 1 1k l\•,;_M1t'1ni 1' I Cttsh {\( rnrnul;_1\t(lt\ l '_,;t_lw1i'11. 1 ht' emplovoo, of tlie Gt'OUP !lire enbl h •d If! l1;,1V(! pi'! I I I'. I,', 111 1 1Hl(i(y Q( The li&blllty on ,11 f_OIJlll ot ,'JI_/ urnul,-J(t'.ll jc',]'j!' 'l', on
last day of the accounting y,,om ;,, ,1,rnrp,i300 of tlw 1 .. ,r value of pl~n ,~1111ts as at tt111 i,,,1,.n.:e r.h,,1•1. d,ilf:I ilt pre31m1. value of the defln!ld obllgatlOII 1t 1tit, balance sheet date blilled on 1IH: ,xl11,1111J1 c11n,od rn1t by an Independent actuary uiln•1 1.>101,·,r.•11111111 c.•edlt m<1U1<Jd
Gratuity [Defined benefit ,,1~11): pl~" t:v,,,y ,.:inploy®'! who has completed continuous ;;,,,v,u", of nv,· m· !li(lle •1•ltli a gratuity on duth or l'l!llgn,tlon The Group fl!IS a dlliined Dlll !di(
or retirement at 15 days Ml1.11y insurance policy,
dmwn 0..,1,.11yl lor ,•ac.r, completed year of !lllflllce, The schm,,: "' hmdM w,111 ,111 ,n,,urmKe comp1ny in the form or I qYllflfying
I Change in the I"'"""' val111, Of the defined benefit obliy•1t1011:
Act.uaridl !.9dlflSI / lo•, ,C', on nhh(Jdtlon Closing defined h,'n(•f1l 1>hlirJ,ll1on
C Change in the fair value of pl11n •-ti;: Opening fair value of plan assets Transfer ln/(out) plan llmll:S Expected return on plan asm Adjustment of Opening fund Expenses deducted from the fund contributions by employer Benefits paid Actuarial [losses]/ gains Closing fair value of plan assets Total actuarial [losscsl / g;,ln, to be
recognised
I) Actual return on plan assets: Expected return on pl1m afisets
Actuarial [losscsj I qains 011 plan ,issets Actual return on plan assets
E Amount recognised in the balance sheet: I 1;:ih1ht11:•c: / L.AssP!·sJ ,::it_ ltw t:nd
of the year Fair value of plan r1c;s0tc; rit I hr ~nd
ofthe year Liabilities / [Assets] recognised
in the Balance Sheet
F Expenses / [Incomes] recognised in the Statement of Profit and Loss:
current service cost T nterest cost on benefit obligation Expected return on plan assets Net actuarial [gains] / losses In the year Net expenses / [bcnclib I
Net actuarial [gains]/ losses in the year Arriounts recognized 1n ULl
G Movement in net liabilities recognised in Balance Sheet:
Opening net liabilities Transfer in/(out) obligation Expenses as above [P & L Charge] Contribution to Plan assets Amount recognised In OCI Benefits Paid Liabilities / [Assets] recognised in the
Particulars Discount rat:e I. *1 Annu"I increase In ~•l~ry cost [Ill
[·!I IM rate of d11;count 1·; cofl~('d umpluyment bPm;l!l ul.i!lyatlons
/l,111ency and 1t'1111•. 01 th~ poit
[#J Th,, estimates of future ,.,1mv 1ncreae1 .;1c rn,Nd!!flld In actu,:11k1I v1luatlon, lili<1119 inlXI aci:ounl ,nm1110111 Nnlorlty, p1,J11vJlli,n 1nd o~"'' r~lev,,nt faci:ofll •:iJCh supply and demand In the crnploynient mark!,t
l :::e::::tell of plan assetli a!l 11 % of wtal platt Insurance plan
J Amount recognised in current and pn:vmut four ye,u~;
Gn,tuity: D~fined benefil ohll~-~tlon l·'·;,111 value of Plan AS½CIS
Lld1cit / [Surplus I in llw pla11 Actuarial Loss/ l<:iamJ on Pl,,n /Jblig11t1on Actuarial Loss / [Gain] on Plan As,,nts The expected contributions for r1e11nl!d Beneflt Pl,111 for the nlXI: fo,anc1al yur will lit, in lin,i wll:II FY 21:liR ,~l-lhe average duration of defined be11,-i'11 pl,,111 Obll~atlon .,, llw ,.-,,d of the yi,.i, ,,, ; '1.99 _[al at M,11,h <I, 2018 : 23-'111 Y"""'·],
Sensitivity analysis: A quantitative sen!·;1t.ivify analysis for s19111IH .1nt aSiump11rn·1 i•; as shown IH ·low·
A Medical Leave:
Assumption Sensitivity Level Im ,act on defined benefit: obligation l NR-1,,il<h Assumption Sensitivity Level
Impact on defined benefit obli atlon_[TNR•l,~k .. h"------------------B leave Wa es:
Assumption Sensitivity Level Impact on defined benent obli ation [!NR-Lakh Assumption Sensitivity Level Im act on defined benefit obli ation INR·LakhJ
C Gratui :
Ac;c;umption Sensitivity Level Im act on defined benefit obi, ation INR·Lakh Assumption Sensitivity Level Impact on defined benefit obli ation f]NR-1-<lkh
Within the next 12 months [next annual reporting period I
Working Cllp1tal I oans from Blink·, l\,O(UflldJ [•] W\ll killlj c,1pital IOl)i)$, f101n h.111kt [tJnse:c1 IH'I !1 [ i 4 J lo,11 i:" !I nrn Intercorpot .itc p Jn:;€ftured] [' 1- 1 I
( • J s111curlty and T "rmt of l\epaym,mt I or !lllcuNld llorrowlng11 Working Cap,t<1I Loons which 1ir~ 111 the• rorm of 0Vt:1<Jr4ft 1actl1ty is 111·•-""'<111y fixed aeposi1·. pl~ced by thlll Group w,th tlw bank, The value u1· ~,ich Pixed cl!•p<)st\-;; dallllifftd und~-, , umllnt a&Ntll af. ~t Mm'Ch 31, 20 I~ I', I NI{ 2,380 Lakl, r .. -. al March 11, .'ll I II IN!< NIL] :1 h<-> "',i,,tandlng ~n 11 '""' nl lo@n 11$ It M. '" 1, 31 /{ll'J IS INR 2,150 I ,1kh l,1•. lit March II. )Olli_ lNR NIL1
[**] Terms of Repaymenl fo1 u111NC11Nld a,m-uwingsi Working <.aplt.ll loM,, wh1c:h are rcp,,yatlle an dem,w,a. 'fli11 oul:stllncllnq arno,1nt or 1011n ,, .• ,Jt M~.-m )11
2019 ls INR 4,500 fas at March 11, 201B: INR 2,500] l.okh. [*' • J Terms of Repayment for Unse~ured lol'l'Owlngs:
l'lote, 26 • Other current liabilities: F"---'P'"a .. y .. a.,,.bl'"e'""t_o_s_ta_t_ut_o_ry .. a""u""th""o ... r"'11'-;,,-,-------~-------------- ------ -------------------,,-, __ ------ ---2 ... ,) .. J-,-.------4-1"'6--1
Deferred revenue t•- !14 28 Advances from customers '1'10..1 219 others k '.;'Jl 259 Total :; .. !,ii" 922
Note: 27 • Provisions: Provision for employee benefits Provision for claims for product expiry and return of goods l'] Total
f*l Provision for claims for product expiry and return of goods: a Provision for product expiry claims In , cspcct of products sold during the y, '<Jr is
made based on lhc; management's tsl:in1citcs conslderinq the estimated stock ly,nq with mtailer. The Group does not expcc:l such claims to be re1rnburse::d by .,my other party in future.
b The movement in such provisiun is st.fled as under: i Carryinq amount at the beginning of the year Ii Additional provision made durinq the vear iii Amount used i'-' Cii!rrying arnmmt· .1t ~ho end of the vc,Jr
Note: 28 • Cun-ent tax liabilities rnet1: current tax provision [Net of advance tix payment] Total
Note: 29 • Continaent liabilities and commitments rto the extent not orovided forl; ll!IIIJt. Contingent liabllltles: "lflllll' a 0ther money f0r which the Group is contingently linblc:
i In respect of Sales Tax matters pending before appellate authorities ii In respect of the demands raised by the Central Excise, State Excise & Serv,ce Tax Authority iii In respect of Income tax Iv Stamp Duty
B Commitments: Estimated amount of contracts remaining to be executed on capital account and not provided for
Note: 30 • Dividends proposed to be distributed:
'
I r I
'!f! (I)
f,,(I,<~
1,331 13,452
1,863
671
The Board of Directors, at its meeting held on May 28, 20191 recommended the final dividend of INR 5/· per equity share of INR 10/· each. The recommended dividend Is subject to the approval of the shareholders at the ensuing Annual General Meeting.
60
70 130
70
/U
188 188
742
43
118
265
·zv~h;;-w~~f-1;~(••,._ I mut:~·;.1 ----~---------N_ottlls to._,,.~ <-;nn-..olJ_d~•••?! r IIMl)('l_.,,_sta_te_m_e_n_m_. ______ _
Nob!! 31 • llll\ltlnue from operations: Sale of produ, l•,I 'I Other operath HJ I r_'v(·'11or~~;;:
Nd q,1tn on foreign currency trammct101.,; an<I lr<1n:,1c111011
Ml:,;:,,ltaneous Income [••] Total
r• l rlH, Government of India has introduce,, the <,oodb ,,,,d :.,e1viu: r,,x (GST) with effect from July 01,2\ll? wh1d1 it•pl,.ii.:es
duty and various other indirect taxes, A'ii ptr Ind /\'; !fl, ~cv«ou~ from operations for the ptil'lOd fro,n luly :m1.1 1 o M,mh 2018 is reported net of GST, Revernu,; rrom op,irn11n11·, of 1><:n•XI~ upto Junll 30, 2017 are l'!IPO!'tetl 11,r1uwc of duly which Is now subsumed In GST, Mi,,,,1,!laneous Income includes, (1) Govermnent grnnt,; wlio'"' o, ott,erwlse acquire non-current assets; ai" 1 ern9n11r,fl '"'~ "111 ·et and transferred to the Statement or pront ,1m1 loss on rel~t..cl ~s~nts.
1.onditfon Is th~t the Group mould c1;n~truct Dnl'Nld Gl'lnt H OQ!l-CUITl!nt llllliillY in l)~l~nt(:
!'!\'S1111natlc and raUon1I bHl5 over the u,,e1u1 live:; nf tlli.,
(2) credit ol exus,c 11111y of INR 1,799 Lakh received by Zydu~ W~lln$;i:t, ,.,1kk1111, Ill(' p,11111,·1·,!11p 111111, pul'lluant to the order p61$$ed by the 01l!U' o1 the C0IT)l))jss1oner of Customs, Cantral fZXC1$1! and J'ivl-V!(l;! --1 d.X ()Tl 1111' l1x;illon or ~•ptl;d~I rt1l'e of excise duty under Nolif1cal1on m ;11;2001-u dated April 2512001 arr111nded by No1JtlCliil:i1111 N<, ;11//IIIJH ,1.1h)il March ~7,2008 l!t NotlftCil\inn No.3fl/21JOH Cf dated J11ne 10,2008,
Note: 32. • Othet income: Finin<:e lncome:
Intt!re~;t income on tindn( id! c1sscls rr1easure1d at amortised coot Net gain on lnveslments rncastirc(l ,11 FVTPl
Gain on sale, of 1nvestment.s
Total
Note: 33 , cost of materials consumed: Rnw materials :
Stock at commencement /\dd: Acquired substdlaries Add: Purchases
Less: Stock at close
Packing materials consumed Total
Note: 34 • Purchases of stock-in-trade: Purchases of stock-in-trade
Total
Note: 35 • than es m Inventories: Stock at commencement:
Work-in-progress Finished goods Stock-In-trade
Add: Acquired subSldlaries Work-in,progress
Finished goods Stock-in·trade
Less: Stock at close: Work·ln-progress Finished goods Stock-in-trade
Differential excise duty/ gsl on opening and closing stock of finished goods Total
Note: 36 • Excise duty Excise duty Total
Note: 37 - Em Salaries and wages Contribution to provident and other funds Staff welfare expenses Whole·tlme Director's Remuneration Total IIS!i!!
779
11,831
12.,610
10
33 l,877
16
1,926
47
1,475
12
1534
392
331 61
852 852
4,981
236
144
303
5 664
266
Sink COtfinH',".1n11 {'{ charge, T1:11:iil I 'l Th" lirn~k ur of int@r<;;.L ""µ"'"~~s lr>tn ma)v1 l1m1iJ~
011 working rapit,11 lo~n11 o,, Non Conwrlibl¢ l)ebentur\lli Oth~r-, ToL,I
an1<irtlsatlon Tot11l
Note:. 4Q • Other ex enses: consumption of store, am1 ,pare Pow~r & fuel Lilbnnr <'harges Rent ['J Repairs to buHil,r,ys Repairs trJ plJnl and machln<:;1 y Repairs to others ln~ura1"1C(! Rates and taxes Commission to ,11roctors Traveling expenses Lcg,11 and protessional fees Net Lo,1s on foreign currency transactlc:ms anti tran!lla~on Commission on sales Freight and forwarding on sales Advertisement: ond sales promotion:, Representat,vo allowances Seminar and conference Other marketing expenses Provision for doubtful debts Directors' fees Net Loss on disposal Of fixed assets Donations Miscellaneous expenses [**)
Total
(*] The Group has taken various residential/ office premises/ godowns under ope,atmq lcdse or leave c111d
license agreement with no restrictions and are renewable/ canrellJble at the opt,on of either of U1e parties. There are no sub-leases. The lease payments recogr11scu u11ucr "Rent Expense," are:
[**] Miscellaneous expenses include: a Expenditure on Corporate Social Responsibility [CSR] Acbvltics as required u/s 135 of the
Companies Act, 2013, b Payment to the Statutory Auditors [excluding Taxes]:
As Auditor For Other Services Total
Cost Auditor's Remuneration Including fees for other services
Note: 41 • Com onents of Other Comprehensive Income OCI : Re-measurement gains [losses] on defined benefit plans[Net of Tax I Total
The numerators and denominators used to calculate the basic and diluted EPS are as follows: A Profit attributable to Shareholders B Basic and weighted average number of Equity Shares outstanding during the year C Nominal value of equity share D Basic & Diluted EPS
Note: 43 • Segment Information:
INR· in Lakh Numbers
INR INR
The Chief Operating Decision Maker [CODM] reviews the Group as a single "Consumer" segment. The Group operates in one segment only, namely "Consumer Products." The Group also exports its products to other countries. However the value being below threshold limit as prescribed under Ind AS provisions of "Segment Reporting", the reporting 1s not r uired.
c Pellow Subsidiarn.::./ C1>ncem11 7y<i•.h Nov!lll:ill:h !nc., 1 l'iA
ViOIIO Healthcare wm,h!d Acme ?harmaeeutlcat; l'nv~te I i1rn1:«1 Zydus T11ctmologlel L 1mlt~n Zydus I lt:,11\liC,m: l united Dlalfoth1,;1II I I Ir 1d1,1 lhY!llild Dialforhcallh Unity t imltlld Dlalfo!11calU1 \jr,,,,,,, lt!l!\l Limited Liva Pharmaceuticati l..lmitf'd Alida,: Pharmaceutk:lll$ UmII, •rl Zydus Foundation Wlndlas Healthc:Mf!I p,iv,1I,, Umlt~(I Zydus International l'rrvatG Limited, Ireland Zydus Nelhcrl;mcl•, 11, V, 1 the Netht:r liind:, Zydus Lanka (l111v .. t<1) Limltlld, Sri l,,,,k,, Zydus Hcalthcme Philippines Int:., Ph1hpp111<". ZAHL B. v., the Ni!lh<!rl&nds
Zycius Pharmac:eutleals USA lnc., tlSA Zydus Healthcare USA U.C, USA Windlas, lnc., USA
d Directors: Dr. Sharvll P. P:itcl Mr. Gcmcsh Nayok Prof. lndrraben.1.Parikh Mr. Kulin s. Lalbh<11
Mr. Humayun R, DhJnraJglr Mr. savyasachi S. Sengupta Mr. Ashlsh Bhargava Mr. Srivishnu Raju Nandyala Ms. Dharmishtaben N. Raval
e Key Managerial Personneh Mr. Tarun G. Arora Mr. Umesh V. Parikh Mr. Dhaval.N.Sonl Mr. DhanraJ P. Dagar
f PO$t Employment Benefits Plan· Zydus Wellness Limited Employee Group Gratuity Scheme lydus Wellne!ll1 ilkklm Employee Group Gratuity Sch~mc Heinz India Private Limited Provident Fund r w.e.f Jan1.1ary 30, 20191 Heinz India Privalc Limited Employee Provident Fund [ w.e.f.Janu,11y 30, 20!9]
Hereon Pharm,K~UtiCill tt;A LI.C, USA Nllllhlilf Phmrn 1,1c~uijc1;1h: ( USA) LLC,USA Zydus HUll:h<:iitP SA Ply l.lmltecl, south Afril" Simayla Ph&rml!(.t)IJI It.di(; Pty Limited, South Afrlcii <;,npt Mdndgement oe!Vli:c·, l'ly Llll1itcd, South Afrlt:a I t 11,, IJtotcil l S~L, lll!ly 1y<1w; I,.111<:!l SAS, France L,:ilior,1!1H H1\i Cornblx S,L., t11x11n
l?ydus N1kkhi1 PhWfi~Cl!Ut!ca l.lmltilda, l>rasll Zydua Ph1rn1,11 eulit~I§ MQldco SA di! Cl, Mqx110 Zydus Pham1:K<11!1'1t:,1I, M(•XICO Services SA de CV, Mexir.o Zydu& Woridwld~ DMCC, Dubai Zydus Olscovc1y DMC<:.:1 Dubai L/\HI I \ll(lpt't It v., the Nethr•r!,111d';
111111.11 1·1i.,rmlle$uticllls (My.Jnm,11) I11111I,•d, Myanmar 1,i,11ty11I l lwrap<11utJ($ lnc., I JS/I
/yVf•l Anin 1,11 Hlll!ll:h !11c,1 USA Vlollo Pharma<:i!utir.;1, umttlld Viana Pharma,~1,ti<,ds lnc,, USA us Pharma WindlJS LLC, USA
Nnn . !'li,0 rnt;ive Chairman Nun-Lx1'1-ut1ve Director rnclq><1tl(.ic11t Direct:Or up to 11.1u.,019 lnd<'P<'lldent Director !ndcpcndmt Director up to 3L03.ZQ11 Independent Ditect(lr w.c.f 02,11,2018 Nominee Dltc<:tor w.d. 30.01.2019 Independent Director w.e.f, 11,03,2019 Independent Direci.or w.d. 11.03.2019
cxcculivc Officer [Company Sccret.aryJ up to 06,02.2019 Executive Officer (company Secretary] w,e.f. 06.02.2019
g [*]:• M/s. Zydus Wellness· Sikkim, a p,11lncrship fl,in, was converted into company, namely Zydus Nutnl1ons Limited (ZNLJ, with elfoct from February 28, 2019, pursuant to which, it became a subsidiary ol the company. Pursuant to the Scheme of Amalgamation bet.ween two subsidiaries of the company i.e. ZNL and ll!PL which was sanctioned by the Hon'able National Company Law Tribunal [NCLTI vlde its order dated May 10, 2019 and effective date being May 24, 2019, HIPL has been merged with ZNL w,e.f, the appointed date of M~rch l, 2019.
268
Not@l~.:1~,1,,c1Party Transactions (:ontlnu;:,,: 8 Tr.atwa<;tiuns with R,daled Partl!;I!;:
Nottitothtl <:on,ohdated l'ir1anwt1 Stawrmmt•.
11111 following t,ansactions wen· ,arnr,d ,iut with the rel,1tcrl partier in !11e ,wdln~ry coum of 1i,,•,111<11111: a Details rel,il,n(J to parties rr,fcrn•d to in Note 41 A b & cl
Details relating to persons refened to in Not.e 44-A rel above:
Remuneration: (i) Solari~~ and other employee benefit:; to Whole time d1rcctors and other cxcculive officer, (11) Commission and Sitting Fees:
Outstanding payable to above (I) and (ii)
Note: 45 • Financial instruments: Financial Instruments Fair values hierarchy: Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy, The three Levels are defined based on the observability of significant inputs to the measurement, as follows: 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 dderrnined usi11~ 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. (ii) Financial assets and liabilities measured at fair value - recurrin fair value measurements:
Financial assets Investments at FVTPL
Mutual funds Total financial assets Financial Liabilities
Financial assets Investments at FVTPL
Mutual funds Total financial assets Financial Liabilities
Finandal IIHl!ts Mutual funds l'r!ld<il receivables L<x1ns & advana" ~l<'.urlty deposit f'l:xed (IAposlt Cllsh and Cash equivalents Total
Financial liabilities Borrowings tntere,;t accrued but. not due on borrowings l'<Wable to Employees r ,·ade payable security deposit Unpaid dividend Total
P11rticul0rs
Financial assets
Mutual funds r rade receivables Loans & advances Security deposit Flxc>d deposit cash and Cash equivalents Total
Financial liabilities Barrowings
Total
Interest accrued but not due on borrowings Payable to Employees Trade payable Security deposit Unpaid dividend
Th@Cimµp'i,; t'1divl11t", cxp(l)',e ii' lo 11u1kvl 11:,k, li(JLJidity l'iik and credit rhik, 'fhit, noh· 1·:xpl,HII', t!i1: '.-.C_I\HLI", fir 1hl{ which the ~ntity It exposed t:(:, t11n,i how llw 1·1il1ly llklll(Jq(;;~ thr: rl!$k and th@ t813tt·d unpd(t m lt)e (1rk1nn,1J ,,1.-it<-'1w•nW,
Th<:! GrNrp <1011S not ai:tlvely engage In the tr.,rlrri•J 1,r '""""1a1 #SlllltJ for """cullltlve purp- nor d0111 it writ,· qphon;. ,rr,, n10,;t .,ignitu.c1nt ffn,nclal risk, ro whleh the Group ,,, ,,,p,y;<•it ar"' d!ISCl'lbed balow:
A (;r,idll rhik: Credit iit,k ari$ll!S from the ponlblllty that COUflh'I patty rn,;y 11,;[ t1,, ilble lo !Sr?ttl$ their obllgatlw IS agl'ftd, 'l11il! Grmµ ,,, r,xpm(c(I [(; Cr<ldlt rlr.rk tram trade rtce1vabl111, bink depO!iltii "'"' olhfr flnanclal amts, The Group perlodlc:1Jlly ~•sttr1e11 tM 11111111";,1 ,drohility of the counter 111rtv l:llklng lnoo ~,,011111. th,, nn,1r11Jal con1.11t1111,, eurftl!lt liCOIIOmle trlndl, anal)'lllt of 111,torir.;11 brid debts iind ageing of accounts l'ef:<,tV3t\l~. lndlvidudl nr,,lillllt:1 li!\'litll 11'$ !1111: aecordlngly, i>dllk d1.,po,;,ri : The Group maintains Its Cllsh lmd c;:mh equiv~lent•, dri<I lliillk d~tll with mpyt«id and hlghly r111,t1 biillKS Hli)nell, lhicl<' ,, '"' •;i!Jflifl!:llnt cFlll'llt risk on such d(lf)O!lltfl, Tradli Retf!ivable: Thi! Group trades with fffl:O!illlllld ~i'id i:r<:di! VVll!lhy thlid parties, !t Ii th@ Group111 policy that ;ill t11stom!ll'! who vv,,.11 l.1\ \l(J(h: on el'l!Cllt tel'f!'IB 11'1'1 subjllc:t l:o en,ctit vertnc.it1p11 procedures, In addition, recelvablt, 1,,,1,mr:e, 1Jre 1111,11itor1!d on a,1 OlliJolng i:INls with l:ne mult thlit tile Grcl!.lp'(; 11x110~1110 to D;id dtlbl:8 Is not 11ignlfl1:1nt, Tlliffll It'll 110 s19mllaint <rrldlt risks with related parties of tti1! Gmup. 11,,, <;roup Is i!ixpoll<!,d to CNldlt risk In tho @V@llt of non•pay,nc:11\ hy tu5lon11'ls, Crt.ldit 1'i§K concentration with mpeet to tnide receiv~bli!li i$ n,lt1gntcd hy tl1r l':roup's l:irq,, customer base, Adli(lU•te expw::t:,,d tiMlt '""'r••; ar,' 1•r,rnqn1,,0 ct ,,,·. n~r the 11-m11nb!, The hllll:Ory Of trnde reu,1v.1ille,. ,,11ow,, ,,n @IIOW311Cil! for bmd and doubtful debb nl INII Nrl [Nil I ,1ld1 ;,• •. ,1 M,,r(.11 31, 2018), The Group "81 ma~,, .. 1111w,111, ,. ol lNll N,I fA,. "' MMch 311 2018, !NR Nil], il/Jdlll',i 11,1(11• r1·mvdtlles of INR 9160◄ l.Skh (Ali at March 31, 10.lU · !Nii HI', 1.rhl, I.
B Liquidity risk: a ~rud,mt llquidily tJ•,k ll)dl\d9l'l\l(Of\L implies llii!lntalnlng sufflclent Cll&h ana mlrrk,,lc1hl•· S<'<urilll", .Jll(I tire ilV.Jilabllity or 1\mdlng !hmygh an ad1•qu,1le a!\'IOU!ll ol 101111111ll('d credit
fa~ilitii!!i! to med 01Jliu,1t1ons when due. Duc 111 the nature Of th~ bUiln8$&, t11@ (i;r(Jlip 111.r111t,IIII'• l1r:xih1hly Ill 11111<11119 by mainralnlllQ ,wallabillty uf1<11·1 I OIY\111ltt,,1 f,,1111!1,,•,,.
b Management rnonilor,, rolling forerasts of th" Group's llquld1ly pesltlon and ~•,h '""I ,,1•,11 ,•q111vc1le11\$ 0111111• basil of il!XP~d Cll$h flows. Th" (irnup '"'"""' tlw l11p11d1ty nr th!ll mmi<<1t in wh1<1, th" '"'"'Y operates. In cidditi,in, the Group'i liquidity fi'l(ln~gllmr:111 1•01,, v 11,volws pmj<hrt.11111 ,,,m nows In major currencl0t1 tnd, ,11is111<·111111 1111• l,•vd of hq111d ,!';•lilt$
oete$$1A1y to meet: these, monflonnu lk1l<:11Ke \,heet liquidity ratios fl{Jtlin~t !libttr1<1l ,uHI t!Xl!'/11.1! 1v(Hil,1ln1y *'°'qLuti-1ments and malntlihlng debt flrianun1_1 pl.in•.
M11turitles of financial liabilities : The tables bfllow ,malyse Lhe Group·. financial liabilities into rtlevant rrmturity 111w~11li1• bd...J 011 Uitrltt wi11.tc1,tu3I m<1turitles for ~II non·derlv•iM, 1111.i,,.,.,1 IJ.ilirlil.l...,, lllij ,11nounts disclosed in the table are the contractual undlscounted c,r,;h flows. l1,i/(111cc•s d,111 wfthln12 months equal their Cllrrylng balances ns I.hr, rrnpc1rt of discounting It not slgnlMCllnt.
Particulars lNR• Lllkh
Non-derivatives / l'inandal Liabilities Borrowings [Including Interest] Trade payable Security deposit Payable to Employee Unpaid dividend Total
Non-derivatives Borrowings [inclnding interestJ Trade paydW, Security ,1cpos1t Payable to Employee Unpaid dividend Total
mi!tli:n,ilrls!< a Por«1lgn ,,une11ry risk 11xpos<1rc:
b
iht! GrcnJp•i cxpo';ttre to fo11t1qn runt ·1 icy rlik at lt11_' ( 'H<i qf the r0fX)f\111q 1w1 iod ex:prtU-:,1,d l1_1uow1:
Se11slthlity 'I h<: ,;r,n,itlvtty of prolit or 111'11 and equity 1 <l thijngu In the c:,ct,angt ratu a, is~• rn;,1nly from fo1r•1qn cuneru:y denon1,n, 11 •>cl ilnanclal ln,t• u, n,:nt:t,
U!iO EtJfl. ELlll Otlw,•,
Liabilitiu: [*J
»f00'!/u li.()1)%
"!J,(JU1:'w
1•1 (14)
II ()
(l) i
Th~ Grour,'• policy i, to m111lml!le' lnt~re•lt r.il~ c~sh 1!,,w ri,k ~xp1""11r~• on lung•tijHn fln~nrlng, A, ,t M~~h ,1, l019, tit" Gro11r Is expo:;,•ci to rhangG» In rn@rl<M lnh>t'lli,i: r<1tcs through bi..lnk borrowings at w1n◄ 1IJ1t, interest' rot«",. rlu: C:iroupft;• itW1 ·:AHF'1111, in Fixed (Jfi:Pn'.;1!•, dTt at fixed 111turL:::.,t 1 (ttes.
Below is ttwi scnsitivit of ro111 or lq_~> and equity { h,nHIJ'-5 in intere•;l rc11c,;:
Interest rates (R)
• Holding all other vanables con•,1,1111
C Price Risk (a) Exposure The Group's exposure to price 11,k ,moos from lrtvblmc11ts In equity ,.int.I n,utual fund hl'lcl !Jy the group amt ,1a,,,,1f1ed 1n the 11c11a11cc sheet as fan v<1lun t11rough OCI ""'' "' fair value through profit or loss respect,vdy, 10 manage ,h pnu, risk arlslnu 111,11, ,nvestments "' cq111ly wcurltie,, and mutual fund, 111c 9rnup divernlfK'S ,h portfolio. Oivclf,1l1cauon or the portfolio Is done in aeeordanu· with the limits set IJy 1111· group, (b) Sensitivity• Mutual Fund[*] The table below summarises the Impact ot lncroases/decreases of the Index on the Group's equity and proflt for the period. The analysis is baooc! on the assumption that the price of the instrnment has Increased b 2% or clccreaSild b 2% with all other variables held conmnt. Pertli:ulars
Mutual l'unds [Quoted] Increase 2% Decf@i!iSI! L%
[*] Holcling all other varlalJlc,s constant. 2 Capital management:
The Group' s capital management objectives are - to ensure the Group's ability to continue as a going concern - to provide an adequate return to shareholders - maintain an optimal capital structure to reduce the cost of capital, Management assesses the Group's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage, This takes Into account the subordlnabon levels of the Group's various classes of debt, The Group manages the capital structure and makes adJustments lo it in the light of changes 111 economic conditions and the risk characteristics of the underlying assets. Loan covena11ts The Group has taken loan for working capital requirement and Long Term borrowings and as at 31 March 2019, the ratio of financial indebtness net of cash and cash equivalents to the Shareholder's Fund is 0.40 [ March 31, 2018 (,0.78)] and Interest Service Coverage Rat,o is 6.67 [March 31, 2018: 89.31]
272
w,11111e5lll Llou1.-,1 NOIUJo':h! Consohdi!l:lld J'ln·""''~' St 11t111m11nb.
tht",1' bGncfits 8IOtiri with li1'1w111,. r-ttimated by ltw ,.,mup. entirt: ~urtJ1,.1s~ C011$!dtfftArc_in !': by W/JJy 1}1 (_c-tih. Th~ h!Lt! (_JJ;;t 1_if uc:qulil!tiu11 un11__1unlh~ to INP-, L.3kh,
lab1hties , , ·uxmlzed as ;, ,.,•,ult ,i Thi; ;1~',{:tl and I f the acqru:,1\1(!11 111<! 8!1 follOW$'
Partleut111'!1 INR ~akh
l nventorlei. 19,880
1'ra(k 8,320 Rcrnvabi<'S, ___ ,,,s,.,.,.,.,.
C21sh m1cl cash 6,')30 cqulvatenl'.!,
Property, l•l«r1l 13,250 and Equipment
Capital work In no progress
Other 54,020 11,tangible l•s:slc
Other Assets 21,5,0
Total Assets 1,2416!10
Current (30,900) Liabilities
Non-Current (2,260) Liabilities
Total (33,160) Liabllitles Net ldenunable 91,530 assets acquired
Goodwill 3,79,692
Total 4,71,222 Acquistion ,~~.+
The fair value of trade and other receivables acquired as part of the business combination amounted to !NR 8320 Ll,khs. The above value of trade and other receivahles is the same as the contractual amount of such recc:lvables,The exce;;,; of the acquisition cost paid over the fair value, of asset:11 acquired has been aLtributed to Goodwill and ,tis not expected to be deductible tor Lc1x purpose at the Consolidated tcvd. From the ddtc of acquisition, llll'L has contributed revenue of INR 2/,819 Ldkh and pro11t dllcr tox of !NR 6J Ill Lakh to the Group. II the busin,,ss rnmbinatlon had taken niace at the beginning of the year, revenue would have been INR 115,178 Lakh and profit after tax would have been tNR 11,764 Lakh. Initial recognition and measurement of the assets and liabilities on the acquisition date are determined on the baSls of available facts and information, Considering that the acquisition was completed shortly before the end of the reporting period, such provisional amounts are subject lo change within the measurement period as provided by Ind ftS 103. In view of this acquisition, the figures of year ended March 31, 2019 arc not compara_ble with lhefl~Llre5C)f previous eerlods,
Note: 47 • Group Information : fonsolidate~.Financi_al Statement§ as at March 31 :2019 compri,P theJin. ~-· I.Stat~ni<mt~ [FSJ of Zvdus Wdlnes:; Wmiieo
Narr,., Principe! Country or Status of ,-:; c1t r.:---:~-:---:--:-,-::-,,_--=~----------1---}ctivities ioc~:~2(a:.::;ti,:;;on~.._,:_M:.:a:.:rc:::.h:.:3:.:1;:.,.;;2;;;0,:;;19;...~M:.:a;:;r:::ch-'""'3C.J1:.:2::.:0 .. 1,.9_,,_4 =====----; Liva !nvestment Limited India Audited 100.00
& Welh,oss
Heinz India Private Limited (* Merged with Zydus Nutritions Consumer Health India Audited 100.00 NA Limited w.ef. May 24, 2019) & Wellness
Zydus Wellness Sikkim [ Refer Note 44 A (g)] Consumer Health India Audited 100,00 NA & Wellness
Zydus Nutritions Limited ( Earstwhile known as "Zydus Wellness Consumer Health India Audited 100.00 98,00 Sikkim • Partnership Firm") & Wellness
Note148 The, <insolidat,·d ftnancial lbltl,nwnt~ fo1 tt1d y•r Widld Mo,:.:i~-ii:' 1019 lndud1 the 01,;:raUOr;,: ;;ti11Ps ft-om January 30, iOl~ , 1111101, thl ftgu,,,,. ,~ year ~mlld Mirth '1, 201'1 ,,rt not ,-omparablt with tho:,i, or µrev10u1 year, Flgu,,,,, ot ;1r1•v1olJS r(!!lQrtlng pi-,100~ h,1vv lw@n l'lltlf'OUped/ ,,,, 1.,-.,ifled wherever n1i!C1191-"Y 1o c1;.,,,,,lQltt1 with Int
_ ~~tl'llp<lltln~Jl:b:IL_ ____ ___ ____ ----- ---
As J)i.:1 1A~..tn 1;.h;tV' For Ohlru!,h@I Shah & Co LLP Chal'tnf:I Aeco, ,nwnts Firm Rllgl$1H11!011 Number: 102511W/W!0029t<
Harish ll. Patel Partner
Membership Number: 014'1U Ahmedabad, Dated: May 28, 2019
Umuli v. f\1111<11
Chief f·11V-i11!.1<1! ()l!1(1J:r
Dh.i111<1J ii, i:,agar ( ompm1y ~;(>eretarv
274
Statement containing the salient features of the financial statements of Sut '•aries/ Associates/ Joint Ventures [Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of the Co /es (Accounts) Rules, 2014]
Part: "A" - Subdidiaries· INR • Lakh
Investments Turnover& Profit/
Sr. Reporting year Reporting Exchange otherthan Prov!:Sion Profit/(1.msl Name of the Subsidiary Share iota! Other income !toss] Pmposed "Gf No. ended Currency Rate Reserves Tc,ta I Assets investments for after Capital liabilities
4 Heinz India Private United February 28, 2019 INR 1.00 1:.?t:2 2,029 656 :. ,-, :.:,J.00%
The Group has acquired Heinz India Private Limited as a wholly owned subsidiary in India on J3nuary 30, 2019 and the samE ha,, been ' (') merged with Zydus Nutritions Limited with an appointed date of March 01, 2019 persuant to crder of NCLT dated May 10,. IDB with
effective date of May 24, 2019 .
For and on.behalf of t1e Board
~ tJ}, ~ ,,, ... ,.-· / - ,
~ ;::,:;_-' (' "4 .,
Umesh V. Parikh DhanrajP.Dagar tTarJr: G. Arora Dr, Sr.a,
Chief Financial Officer Company Secretary \N hole Tlme- Otectur (t:.-,!rm•~
Ahmedabad, Dated: May 28, 2019
275
Auditor's Report on Quarterly Consolidated Financial Rei&ults & Consolidated Year Ended Results of Zydus Wellness limited Pursuant to the Regulation 33 of the SHI (U&tin1; Obligeitions & Disclosure Requirements) Regulations, 2015
To Board of Directnrs of Zydus Wellness limited
We have audited the accompanying statement of consolldatf,\d financial rt!sults of Zydus Wellness Limited ("the Company")
which includes the results of M/s. Zydus Wellness ~lkklm, a Partnimhip Firm {toF{ether, 'the Group'), for thf' quarter i:iml
year ended on March 31, 2018 ('the Statement'), alt,u:hed her1,,with, being subrnit:ted by the Company pursuant to the
requirement of Regulation 33 of the Sl:61 (Listing Obligations and Disclosure Requirement~) Regul;;tion,1 2015 ('the
Regulation'), read with SEBI Circular No. CIR/CFD/FAC/62/20lG dated July S, 2016 ('the Circular').
The consolidated financial results for the quarter and year ended on March 31, :w1s have bf'1•11 preparNI or1 the basis of the consolidated financial results for the nine-month period ended December 31, 2017, the audited annu.:il consolidated financial statements as at and for the year ended March 31, 2018, and the relevant requirements of thP Regulation and the Circular, which are the responsibility of the Company's management and have been approved by the Ooard of Directors of the Company. Our responsibility is to express an opinion on these consolidated financial results based on our rnview of tlw consolidated financial results for the nine-month period ended D0:cember 311 2017 which wcis prepared In ~ccordance with the recognition and measurement principles laid down In Indian Accounting Standard specified under Section 133 of the Comµanle~ Act 2013 read with relevant rules issued thereunder and other accounting principles generally accepted In India; our audit of the annual consolidated financial statements c1s at and for the year ended on March 31, 2018; and relevant requirements of the Regulation and the Circular.
We conducted our audit In accordance with the auditing standards generally accepted In India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial results are free of material rnisstatement(s). An audit includes examining, on a test basis, evidence supporting the amounts disclosed as financial results. An ;iudlt also includes assessing the accounting principles used and significant esli1nc1Les made !Jy management. We believe that our audit provides a reasonable basis for our opinion.
In our opinion and to the best of our Information and according to the explanations given to us, these quarterly consolidated financial results as well as the consolidated year ended financial results:
(i) include the financial results of the entity M/s. Zydus Wellness Sikkim, a partnership firm;
(ii) are presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016, in this
regard; and
(iii) gives a true and fair view in conformity with the Ind-AS and other accounting principles generally accepted in India of the profit including other comprehensive income and other financial information of the Group for the quarter and year ended March 31, 2018.
Ahmedabad May 24, 2018
Phcno. /079) === ======= :::===
For, Dhirubhal Shah & Co Chartered Accountants Firm Registration No.
~ b--Harish B. Patel Partner
.:.:Jbc:mou,:.;J!:fi·1Nt9J,11r infc@dbc:riro ===
Vadodur, ,Road
276
Independent Auditors' Report
To the Members of Zydus Wellness Limited
Report on the Consolidated Flnancial Statements
We have audited the accompanying Consolidated Financial Statements of Zydus Wellness Limited ("ttw Company") and Zydus Wellness-Sikkim, a partnership firm (the Company & firm are collectively referred to as "tht' Group"), comprising of the Consolidated Balance Sheet as at 31 March 2018, the Consolidated Statement of Profit and Loss (Including other comprehensive Income), the Consolidated Statement of cash flows and the Consolidated Statement of Changes in Equity for the year ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Consolidated Financial Statements").
Managemt!nl's Responsibility for the C:onsolldated Financial Statements
The Company's Board of Directors is responsible for the preparation of these Consolidated Financial Statements in terms of the requirertH\'!htS of the Companies Act, 2013 ("the Act") that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive Income, consolidated cash flows, and consolidated changes in equity of the Company in accordance with the accounting principles 1:;enerally accepted in India, including the Accounting Standards (Ind AS) specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The Board of Directors of the Company are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Company, as aforesaid.
Auditors' Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
277
An audit involves performing procedures to obtain audit evid<!nce about the arnolmts and the di:;d<Jsures In tlw consolidated financl,1I staternents. The procedures selrcted dPpend on the ,1uditor's judgment, including the assessment of the risks of niaterlal mlsstatermmt of the consollrfated financial f;tatements, whether clue to fraud or error. In mc1king those risk assc•,w1ents1 the auditor considers lntcn1.il fin,inclal control rt:~levant to thP Co111p,:1ny1s preparation of thP consolldaterl financial statemE'nh 111,il give a trw· ,11HI fair view In order to dE.!Sign audit p, ornd11res that are appropriate in the cltcun1stances. An audil ;ilso Includes 1?Valu.1ting the appropri,.lleness of thr· ,1cco1rnting policies used and the reasonableness of the accounting estimate~ made by thl' Company's Board of Dlrcc:tors, as well as evaluating the overall presentation ot the consolidated financial statements.
We believe that the audit evid1mce obtained by us is ,;ufflcient mid ;1ppropriate to provide a basis for our ,1udit opinion on the consolidated fin,mcial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the /\ct in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted In India including the Ind /\5, of the consolidated state of affairs of the group, as at 31 March 2018, .ind their consolidated profit including other comprehensive Income, their consolidated cash flows and the consolidated changes in equity for the year ended on that date.
Report on Other legal and Regulatory Requirements
1. As required by sub-section 3 of Section 143 of the Act, we report, to the extent applicable, that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b. In our opinion, proper books of account as required by law relating to prPparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books;
c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, the Consolidated Statement of Cash flows and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the directors as on 31st March 2018, and taken
on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018, from being appointed as a director in terms of Section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the group and the operating effectiveness of such controls, refer to our separate report in "Annexure A"; and
g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The group has disclosed the impact of pending litigations on its consolidated financial position in its financial statements - Refer Note 28 to the consolidated financial statements;
ii. The group did not have any long-term contracts including derivatives contracts for were any material foreseeable losses.
278
Ill. There hns baen no delay in transferrlni amounts, require?d to b(' transferred to the Investor Education rind Prot<>ttion Fu1'1d by the Company.
For Dhirubhai Shah & Co Chartered Accountants Firm's Registration Number: 10251~
~)>.t~ Harish B. Patel Partner Membership number: 014427
Ahmedabad 24th May 2018
279
Annexure - A to the Auditors' Report
Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143 of the Companies ,Act, 2013 ("the Act")
In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended 31 March 2018, we have audited the Internal financial controls over financial reporting of Zydus Wellness Limited ("the Company") and of the entity M/s. Zydus Wellness Sikkim, a Partnership Firm, as of that date (the Company & firm are collectively referred to as "the Group").
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company Is responsible for establishing and maintaining Internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated In the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI'). These responslbllitles Include the design, Implementation and maintenance of adequate Internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, Including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit In accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") Issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be pres_cribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material rnspec:ts.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of Internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
280
Meaning of Internal Financial Controls over Ftnanc:lal Reportlna
A company's internal financial control over fin,lnc:lal reporting Is a procfiss designed to provide reasonable assur,1m<,' regarding the reliability of financial reporting and the preparation of fir1ancial statermmts for e><ternal purpose, in accordance with generally accepted accountlnF, prlnclpl~ll. A company's internal flnar,c:111 control over fll'\ancial reporting includes those policies and procedures th;1t ( l) pert;iin to the maintenance of rcrnr ti•; th;it, in nw,onable detail, accurately and fairly reflect the transilctions ;ind dispositions of the assets of ttw conip,my; (}) provide reasonable assurance that transactions are recorded <1s rwc<'ssary to permit prepuatloti of firianci,il '.l,1temcmts In accordance with generally accepted accounting principles, and th.it receipts and expenditures of the company are being made only in accordance with authorizati<ms of m,magenwnt and directors of thr comp.my; and (3) provide reasonable assurance regarding prevention or timely ch'tection of unauthorl:ed acquisition, ll'.,<', or cli-,position of the company's assets that could have a material effect on the fin,mcici! statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal flnanclal controls over financial reporting, Including the posslbllity of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the ll'lternal flnanclal controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reportirig may become Inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the group has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively ;is at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAL
For Dhirubhai Shah & Co Chartered Accountants
Firm's Reg. istration Num~r:~511W
~h~\~ Harish B. Patel Partner Membership number: 014427
Ahmedabad 24th May 2018
281
Partlculani-
iissm.: --Non-tllffilllt IIIINll:III
Property, pl.mt and equipment Ca11i1;·1I work,-111 [>1ogress
Investments Trade receivables Clish and cash equ,valents Bank balance ot11er than CciSh and cash equ1v~l~nt-. IMns
Other current .J'.,'.'.iGts
Total EQUITY ANO LIABILITIES: Equity:
Equity share capital Other equity Non controlling Interests
Liabilities: Non .. current liabilities:
F[ndrK1a! liabi11t!es:
Other financial liabilities Provisions Other non current liablities Deferred t.ax liabilities [netJ
Current llabilitles1 Financial liabilities:
Borrowings
Trade payables Other financial liabilities
Other curr':'nt liabilities Provisions current t.ax llablllties f net]
Total Significant accounting policies Notes to the Consolidated financial statements
AS per our report oleY~n~ For Dhlrubhal Shall & Co Chartered Accountants Firm Registration Number: 102511 W
Harish B. Patel Partner Membership Number: 014427 Ahmedabad, Dated: May 24, 2018
Dhaval N. Soni Company Secretary
-I ·+
t, ij
11 '~
10
1 I 12 13 1,1 15 tG
17 1B
1-9 io 21 8
23 24 :'.5 2r, 27
2 I to47
~' A j Dr.SE Chairman
~. cl..,-,.,
Tarun G. Arora Whole Ti e Director
1,tJ/t4
11
?I
10 57
!!03 5,700
qq
:l,H!B
3,001 404
2,147 41,8119
111,
:)5
71
0 68
197
:.',500 6,650
554 1,510
132
282
:t;(i~~~ w,~llm!~;·/,rtllted ______________ eo ... _,n.;110 .. ·_11 .. 11._11bld l:u•.'."'."''.nl ol Prnfll jJn!tt~~.~ for the xur •~d!!! M1m::b :U 211111
PtH11n1l;1r-,: Nott~
1,, •vr)l"ll.Jt? from operations ( )!·I 11 ~r income
Total incom11 1:)(PIINSIISI
Cost of matarlals consumed Purdlllsu of stock-in-trade Changes In Inventories of finished go6ds, work i1H'roqw,, ,,,,,i rtoci,,in-tradll E!xc!N duty on sales Employee benl!fits expense FlnlnCIICO!l!S Oeprec:llltlon, amortisation and lmpa,nnent ex1,crl',;1s
Other expenses Totlllfflt'll@n!IM
Prollt before tax L~S(,: T°dX expcr1:.;e:
Curi·ent tax Deferred tax
Profit for the year Other Comprehensive Income
Items tliat will not be reclassified to profit or loss: Re•measurement gains on post employment dllflniid ~n~flt pla11,,I 11,•1 ol 1,« I
Other Compr11h11115iv11 lnwme for the y1111r [nl!I: of ffilt] Total Comprehensive Income for the Year[ net of taxJ Net profit llttrlbutable to,
owners of the parent Non-controlling Interests
Other Comprehensive Income Attributable to: owners of the parent Non-controlling Interests
Tot:al Comprehensive Income Attributable to, owners of the parent NOn-eontrolling Interests
Basic & diluted earning per equity share (EPS] [in Rupee;;} Significant accounting policies Notes to the Consolidated financial statements ~.llur seRQi:tm=o~ For Dh1rubhai Shah & Co Chartered Accountants
Firrn Registration Number:
•
Harlsh B, Patel Partner
j, .
Membership Number: 014427 Ahmedabad, Dated: May 24, 2018
Dhaval N. Soni Company Secretary
No.
lO
ll
32 33 34 35 ,& 37 38 39
,j{j
t t,0,11
Dr. Sha1vil P. Patel Chairman
,!9;!-~l~)
13,SOS !iil
(392) 3,198 4,llt<
,t,r,
'llG
LS,lVi ·711~
12,400
21 21
1.1,149
l0,898 230
21 0
10,919
730
27.89
283
--- ~-""-"•'--·--lydu~ w .. ~um~.:. .. I unih•d
~--- COl!ill!lidllblld Cash l'low !lta~!!'""l Im the YC•'I t!lld<,d M_il!Ch 31, 20111 INR- l1ld1t
-~-• "'
Particulars Year end911 l!Cf1,i', - -- -:llltl ~Ql/
A .Co$b flow!I tmm PP1mt1oa m:;t1,1,1i:~; Profit before Tax H,9N 12,400 Adjustments for:
Oepredati()f\ Amort!Sh()!l ,llld l111t;alrfllfnt :};?.C 716 [Profit] / I oss on sale <Jf a,•;el s I. N,•1 I .l 18 Interest II womc, {J,O&Oj (3,139) Fair value !Jilin on finm111111 inttrumeni ilt l'lllr value through s1<1tement or proil! and IOl!S 1;1n,.:.n (3) 11,, moosurnment of Employ<!es l10n11flts (111 •1) 11 \()
Interest expenses no \ll
Bild cf!'l1ts written off 4 I
Provisions for probllblt product l\!Xplry c1 .. 1m•;
and return of goods m Ii) r-------------
Total (2,0111) (J,)01)
Operatmq profit betor<! working capital cha!l9e, u,11, 10,IJ')/
/\djt1~,hlH'11ts for:
Increase In trade r(•telvaliles (4/'~) (bo)
[Increase l / Decrease In inventor ier, {1112; (788) [Increase] / Decrease in other torrent assets Ii f'Hh,,') (75)
Increase in Current F/IJ~rtcial A$9;ls Loan _ 1-; (52)
Increase in Non Current Financial MS<\lt.-Loan I' , L,tJ.: .. 7. (1,438)
Increase In Non Currant Uctbllties u:; 0 [Increase] / Decr<\li\se in Non Current Fit1ane1a1 Allliit!i-Others (3) (39)
Increase in other non current assets t (6) (93)
Increase In trade payables 1,0U l !J;
Increase In other current llablllt!es (541) H \'J
Increase In other Non Current Financial u,1lllilies 2 II
Change in Non-controlling Interest (0) (.l8)
Total (4,801) _____ (l,'AO Cash generated from operations 8,011 8,l/)(}
Direct taxes paid [Net of rnfUnds] (1,172) (tl!>S)
Net cash from operating activities 1,1106 J,695
.Q cash flows from lmq!ftlng activities; Purchase of fixed assets ,••<dr>, ,, ... ~ .. -; (3,084) Proceeds from sale of fixed assets 17 Proceeds on sale of Mutual Funds ,;_,,~,. (3)
Investment In Fixed Deposit (net) ,,.z~f, (13,694) Investment in Mutual Funds (net) {]t,: ~-~'f) 6,418 Interest received V 3,.-.asn 3,141 Net cash used In investing activities }. { ~;, ); '; (7,205)
i-,------------·•·"-----As at March 31, 2016 Add: Profit for II": y,:ar Add [Less]: Other Co111pr,•J1~n~lvt lrn::Qm;} Total Comprehensive lncotru1 Trimuctions wi!h Ow11nt::, 111 thtlr ca~city a,i; (1w1w:r,;·
Divldencls Corr,or"tll OMdllnd nix on 01v1d1:n1i
As at March 11, 20:&7 . Add: Profit for the year Add [Less]: OtherC0mpreher::,1vc, inoom~ Total Comprellenslve Income Transactions w,th owner,. 111 thl.!lr Cllpi!City 11:. own,,:•,
Divldencls Corporate Div1Clend rax on Dlvld~nd
All at March 31, 2018
11.ux:r.Jl~r report of eo dp For Dhlrubhai Shah & Co CMrtered Accountants Finn Registration Number: 10,s 1 l w
Harlsh B. Patel Partner Membership Number: 014427 Ahmedabad, Dated: May 24, 2018
A Tht ro11ow1n1J· l\ot'II Pf'0\''d~,; 1,,1. of the 11gn11,, ,mt !!,,.ountlng pc,llci•"· ·" loi:,t.i In ttti'on ,1101 ,111on of th!ls;:;:;~"' 1,,I ltli:im,ni;"ii;;::;; pc,llcl•~::an11•n1:1~ a:i "· all the v,:,.11·, 1ir11Mnted 111111";•, oij11rwl• •1r.,J.
1 llllsis of 11111pal'lltl11n1
2
A The f\flfj11 ◄ ·i.:ii q;il, ·rntnba h@:Vt~ i11 '('11 piepared iii (.U_UH 1bru 1ft With Ind!,J(l /\i ! I lllfitit)Q Stt1trt(L111I·, n.niJ AS] !lt)ttfi,·1 j ll!l!l('l l:i'i~ 1C.ompant1)•., n11,Ji;:111 Aee0Unil1111 :;t,1111 la1tb.:] Rule,;, 201-S, i'!J!t .irnuHh>d and other 1t ,11 •v,_mt orovtsions 1 11 t;hl" 1 1 1rnp0ni11 Arr, -'O 1_1
a For a!l p.\t·1u1I•, IJj) t;o ilid in(;!11(1!11~ 1!1,· year ~nd~d M,lli ll .n, 2016, th· ( ,I\H)t) illd PftPll'l·d jl\, 1111,u\Ci~! $M~11\111", Ill ,:1@rd£1nc:e wd!1 l!H' .~1untlng ::ilt'i!\{i.ll\l:; n:ottflt!Ki u11de,· tlWI Sllci:1on .l Il of W· uimpenie, /\ti ,ou, r1!lld t.og,:ther w1tt1 p!lragrapl'i 1 ol tht Ull'llPl!m<!S rMmuntsJ Kulfi, ]014 f!ndlan WW-J, f:!f~ctiv8 trgm Aprtl 1, ,om, tho Group haudon1.e,1 \1111 AS as per Comp,;, ,,,,1 [lncll~n A11 ,.,ur1bn., StllndardsJ f.11,11 A$] Rulu, 20l', o~ ,,,,1,nlld 1Jnder •,M.ltM l.13 of the C:0111p,m1e, Act, 2013, r hu a<lopum was carrk!!ct r,111 "' ,1c:cordana· w,11, lnd AS 101, Fl11;i,c,,,1,,, Adl)fltlon a! Jndlan Arcounting St,,11,JariJ•,.
C n1~ f111,;nrlal 'ffi'l1'<1111~11l!l htlll' ™""" ~1el)lln:id un hl..,.,l'l<~I 00,1 llil&I~, '""f'el'/I' fu1 lJ1~ rull!'lWln~ M~\illtt, ,1110 11~blll"""' whicl1 ho\/<! M!!M m"U,iJi'lll<J ,Jl fillr vain~ ur ,~v~lut'd amount:
a The ront1 ,Htual arrnng,•1n1•nt w11h the otht!!:1 volf' tiold<ers of the inv1",t(:1'
b Ri1Jhts arlsln11 fiom other oontraetual a1ra11gements. c The Gmup's voting 119111:s and p01:,,nt1,;I voting rights, d rhe size of the grow', holding Of voth ,g ri!.)hts relativ~ tl'J 11w ,ize and dlsper'.lon or' the holdings 1,f the other voting riyht,; holders.
B Consolidated 1111anc1al stabermmtr, ;111, prepared lt•inq uniform ac:co1Jnt111q policies for Hki!l' tra11:,,Jr!1Qflti and ot.het t>vent:l in simila1 1.11ulf11~tJJ)Ctia, If a n1t'lllh1_'r of the gro11p uses account1rnJ 1::iolicies: otll1:11 tt1d11 thooo odoptc'tl i11 the conwl1tk1t\XJ 11nancial st;atwf11:·.nt\, f'br like trl111:,,1ct10l"b and event:1 m ,,11ni!ar cu·cvn1•,tJ11u-•'.;, approp1iatt-' adjustm<·r11:, r11rti 111ade to th.JI qrni1p member's. l1nr1ncir-11 ·itatements 1n ptt•:Jknlng th@ con'.,oliddt~i financial \;tJtenwnts tt) ensu1t' r':nr1fmrr!lty with tlH' qro11p''.l accounting_ policies,
C The financial statements of all entitles used for the purpose of consclldatlon 111,1 dr.wl\ up ta sanw reporting date as tl1at of the Group, I.e., ycdr ended 011 March 31. When tl1e end of the r,,portlng period of the parent Is diff~rent from that of a ,,ubsidlary, the s11b,ldiary prepare,, for wns0Udatlon puqXlS!lS, addlUOndl tlnanclal inf0rm~t1on <1s of the same elate as U1e financial sLdl.ern.enLS of the parent to 1 ·nable the p-.1n~nt. to n)nsolfdate tlH: fin;inclal Information n! the subsidiary,
3 Use of Estimates: The preparation of the cons()ildated flnanclal statements In 1xmform1ty With Ind AS wqwres management to make estimates, judgments and ~ssumptlons. These es~mates, Judgments ~nd assumpt,ons affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of conijngent assets and liabilltles at the date of' t11e financial statements and reported amounts of Income 1md expenses during the period. Application of ac:counung pclic1es that require crltic:al accouhtlrit'J eslirnates involvhKJ complex and subjeclive judgments ar0 1,rovick·d below. AC:co1uHinn estimates t.()11!d tha11ge from p(:r!orl to period, Actual rl'.:Sults could diff~1 from tho:~e estur1otes, ·Approprintr ct1anges in estimates are made ;:is mcrn;'11Jement becom( ", r,1ware of chan9e:, nt urcumtitancci.; surrounding the e'.;t11rn·1t~s. Changes in estimates are rel'lected In the consolidated financit1I statements In the P<'rind in which r:11,inges ;m: made and, if rnrlterial, their Pffccts are disdosed 1n tl1c notes to the consolidated fmanclal 'itlttements,
Critical estimates and Judgments a lnc:tlme Taxes:
Significant Judgments are Involved ,n determining the provision for Income taxes, 1nrludlnn nmount expected ro be paid/ recovered fur uncertllin rnx posltlons. b Property, plant and equipment:
Propctty, plant and equipment represent a significant proportion of tlH? asset base of the Group. The charge in respect. of pl!riodlc deprec:iat:ion is derived after dete, mining an estimate of an asset's expected useful life and tile expected residua I value at the end or its life. Management reviews the residual v<1lues, useful lives and methods of depreciation of property, plant and equipment at each reporting µerlcd end and any revision to these is recognised prospectively In current and future periods. The lives are based on historical experience with similar assets as well as anticipation of future events, whicl1 may Impact their life, such as changes In technology.
c Employee Benefits: Significant Judgments are involved in making estimates about the life expectancy, discour1t1ng rate, salary increase, etc. wl1ic!1 significantly affect the working of the present value of future llabllit1es on account of employee benefits by way of defined benefit plans,
d Product warranty and expiry claims: Significant judgments are Involved in determining the estimated stock lying in tt1e market with product shelf life and estimates of likely claims on account of expiry of such unsold goods lying with stockist.
e Impairment of assets and investments: Significant judgment is involved in determining the estimated future cash flows from the investments, Property, Plant and Equipment and Goodwill to determine its value in use to assess whether there is any impairment in its carrying amount as reflected in the financials.
4 Foreign Currency Transactions: The Group's consolidated financial statements are presented in Indian Rupees [INR], which Is the functional currency of the Parent Company. For each entity, the Group determines the functional currency and items included In the financial statements of each entity are measured using that functional currency,
A The transactions in foreign currencies are translated into functional currency by the Groups' entities at their respective functional currency rates of 'exc;hange prevailing on the dates of transactions.
B Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the Statement of Profit and Loss.
C Foreign exchange differences regarded as an adJustment to borrowing costs are presented in the statement of Profit and Loss within finance costs. All the other foreign exchange gains and losses are presented in the statement of Profit and Loss on a net basis.
5 Revenue Recognition: A Revenue Is recognised to the extent that ,t is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the
payment Is being made. Revenue is measured at the fair value of the consideration received or receivable, taking Into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is shown net of returns, trade allowances, rebates, value added taxes and volume discounts.
B Excise duty is a liability of the Group as a manufacturer, which forms part of the cost of production, irrespective of whether the goods are sold or not. Therefore, the recovery of excise duty flows to the Group on its own account and hence revenue includes excise duty.
C Sales tax/ Value Added Tax [VAll / Goods and Service Tax [GSll is not received by the Group on its own account. Rather, it is tax collected on behalf of the government on value add<:Q \Q 11,e Goud, by ttle Group. l\ccordlngly, It Is exrl,,~<'rl frnm re11cn11c
287
Note: 2 ·
D The,spei::i'ht 11'1
a lilllc of Ciood11 Revenue froin !hf1 :;di(! cf good& n;r < ~llllillld wh@n rim :;iQnlflCIIMt rlllk& ~nd r cw,rrdS Qf own~r<fHµ oi 1:he goods I r,;!V<' Pfl·,,:«! to the f?Uyr•r, IJSlJIIIV on of tilt! noods, RevllllJ~ fnnil the Nie of Q(H)il!) maaured ,]I; tf'I,·, j·.-nr V@lue of th¢ WflGJ(JntiOn ret.:eived Of r'alvabha, flit (11 tk~LJrns and ~ltuw;,1.(!(t'I, trade .irld volume tebau1-'~, n1e Qoodl are: oft,211 with volurrin tii(tr.tiu1a/ortctn~ 11K1,nHves and cuato1n~rt t1,wt.1 a right to ~t:L,1111 t1(1maaed or r.u'Clducts. Rtvttnw frf)tn salt:1h 1•, 11,t',('O on tht p1 l!.1 • 111111,- sale,& 1:t'int,. u 1·./rvlRP1 net or· t~i'-:,, ,11111·,, 1 Hsb?rlr,al e;,:11t:r11:111,. is u~ to f".!1111,1tt-: ,_·11'\d prtiv1dv 11 ,1 1'i.1111,1g~ or (!!)(p11y \ 1.11111·. No rA:lttrnt11t of f111;11UJ{lf1 IS d~mff-0 I 11("·,i'llt <_1i tht ~ll®'i ;11 I' with thi!i tl• •! Jli{ll ,_1, !d!t tenntl it', jl••f jit r:valer1t trAd\' 111, I( tut' Qrtd credit 110!1cy f, 1IIOW~J.1 by ti 11' 1·;1 iJljfJ
b Sorv1c:e l!!®!lli;' s1,1rvia. 1nco111f' i·-.
achilMlmant or c lnt,;m,;t Yncom01
ill! pW !'/iP! tiJrn"l/A of C(_)fi:t-f'tl(J:;, With tht CUr,r·nn1ttt$. viJN/in th@ rt!lci.h:'d \J.JfVieet Ir@ 1)$1'fult1t('t1 IS i,@F tf'U· mll1stone1 e,tJ(J (Ht' net of Nl'Vll.'.t-~ t,;tX1 wherever eo1p!i!c,.s'1t"'ih·
Poi .-ii! 1k•IJ! lniffrumgm'-, 1111 'i!',tlll'td ~t ff'h(11 rhit;'d ! 11•a:, intc!re~ 1n1 n1111 • rteo-rd@d il',111(J ihf-! eff~\'$ II lli;!{(' (11 1 l~) l11t} rat~ that '';><.,;]( 1!v di~unts thf'I efil-1mdt"('d tutor0 cash p,1YHH,'.lll', Of t'Qlpt!, !)V!'I \J11_-' ®{P«f;t._"\d Ilk Ii! !"1""1{• flnau,ctil hr-;!H_JilWI 1! Q! IA 1hortt-'! pi•(IQ{J, to~ 9rtr11& ( ifrtOUnt nl
th1;; lill•11.:,.1 or 1.u Lil,; ;,1110!1'1•"1 1.11 " i,n~ntiJI liau1h(y, Wlrtn tt," ~lf1!cti\l!l lnit;,,.ol. ,,w, the <,«,up y.1J111a!'f;;~ tl1e ~.,._;l.!ri<J flows l;y considering OIi li'lf' contractual term, of t Ir,; flnaneial Jr ,,,rr,!nit'.frt but does no! ru111,idl!I' 1:1\ellll(t)fi{ llmJ ,, ,,ct1t 1-.
d D1vld1111d1 l)Jyj~$nd iin,m~ IS rllf.'.lll!nl!lll<l Wlil.lll tilt vmup'~ rt~ht ti) l('\:l;rVI' th;; D~V~rellt IS QSL~hll~h""1, Whrcll ,. g~n-f'IIIIIV wh~ll sl1aret1t>lrl~r,1 Afl!J!OVe tile ;!Mt1mrl
e other rncot11Q: Otl1er !ll((Jllle /$ i'tCQgt1i'-,~•1l wln::ll no slgrtlfli ,!!It l__j(I( rrtlint;y 15 if) !I-':, <11 ,1,,r,r11nat1011 ill 11 •,1l1wnt1on ext~,
6 Government Grilntli: A Gov~rnment grants Me rnrngnised In 1rcr<:m:l<1nce with thffl t;;;r nb or i:h111 Nl$Jlll!cirv~ g, ""t on aCCl'UII cQnSlde~ng tt,e ,;J:atus ,)f c:ompllanc® of pn,scrlbed 001•1<1itnns a11d
ascer1ai~ment that tlwi grnnt will be l'e(;~iw,r fl Governrnent ar&nti rdil!r~1 to revenue r~s.,.,,nllll!d on <J S\l'~'trn,ltle and qros, 11,1,iS In the Statc,ntj11\ ,,r PrnMt and l)v~r the llE!rtoo <1ur111g which the relato:I m,a
lntendecl to I)(, 1 nirlp@nSltt«i .-11 i • 1nuJ1 red. c Govemnw·1·11 q1 .. ints relatl3d t(1 <11"@ ~nil,t.!>J;l <1', 1111.l.:Jrrtill In ~\1,d ,1rnrn111t$ Ovl)f tht: vx1)1•1 l('J.-l u-~I life of 1111• related asset
D When lo,ui'., or s11nil1Ar as:s1st,1nu• i11t' Dt'OVided by ~uvcir,menw or it•l,1kd 111'/ltttutton~, w111i ,u1 111te~ !'8tl· hdow tllta curf'l!nt t.1pp!1{;1tJk~ maMt r,:1\1.\ the qff«t of th1~~ favorable lnl:l!lrut rnt1rn·11f!d as a gover n,n,:nt grant, The l<lufl or .,,,sl!rtllnr::e Is inlttally fi,cognll<l!d 1mrl mei!lsurld at fair v~lu<: .tiid the governrnnnt [Jr ant I& mlll!aJJ1!ct as the difference betwetn Ill() rnitlal Cllrrylng ViJIUe ul the IOl!n and thr- pr(<Celldi r!!a,rvr,rl, Tht loon IS SUIJS(l(lllf!lltly m11111urlld µ;cr 11'41 accountrr1rl poliry applle11blei t,) llrrancial liabilities. However, 1" ,1rrordance with \he m«:mptlon H Ind AS 101, for st,rh l0<u1s that existed on Apnl 11 2015 the c;,oup usu the p1cv1011r, <iAAP carrying "mount of' the loan at tlie d,1t;e of trcu11111(J11 ,1•, tl1,2 carrying r11n1n111t
7 Taxes on Income: Tax expt.1ns<':, 1.-nmprlse of Ct1t I t'!lt .:mrJ deftirrt.'!(:i t,1x.
A CurrentTax, a Current ll!lx Is me,%uff'!d at the a1noll11t expected to I),; p11ld ,,,, the basis of r,>1rers and deductions available In ac:rnrctance with the provrs,ions of the Inoo,ne Tax A~,
1961, The tax rntes dfld tax laws 11sed to compute the amount ar11 th-that ore er11tcted or $ubsta,;tM!ly enacted, lit th(; reporting d~tr-, b Curre11t tax items are r1.~i:.Ji11111:;,,,1 In correlation tt} !!11; underlyln(J tr,in:,KKtlon eltt1er i11 '..1ti'lii":1ntmt of Profit n11d I O!;S, OCl or d11,~(.tiv 111 (~Uity.
B Deferred Tax: a e>e:reneo t,.1x ii! µrovldtd ll',IJH_J t.li~ liablHty fnt'\ll(l(i nri tempot(uy tiJt!{'l<'noos b«rt.w1..;c11 1"t1t") t.·1X" Da• of d'.,:--i!ll, ,uld liabUltle::. <llid llldr carrying ,Hnuunb for finane1.il
rep0rttng purpos0s at the reporting date, b Deferred ll!lx liabrllties are recognrsed for ail taxable temporary differem:es. c Deferred tax a,,sets are recognised for all deductible te,npor,,ry dll'ferentc1s, the carry forward of unusfld ll!IX credrts and any unused tax losses, Oeflllrl'l!(I tax ass!ltl
are recognised to the extent tt,:,t it is p1ob@hlc thattaxable proMt will he available Ma Inst which the t1ed11rt161e tcrnpcrary diffc.rcnrcs, the carry foiw::irrl nt unused t<1X credits and unused tax !o'.,ses v,n be otill,md.
d The ca1 rying amount of de1e1 rt'd tax asset!; reviewed at each 1('portlnq dab! and reduo~d to the extent that it i•; no longer prohablu that suffk:ie11t 1,-1x<.Jble profit will
be available to allow ail or part of the defen.,.; ldx asset to be utrlr,,,.,l, Unnlit'Ol.)nlsed deftlr1tid tax asset."'" re-assessed At .,.,11 ,.,portlnq date ancl are 1ecognlsed w the extent thdt it has become prolJ1Jille t:Mt future taxable protlts will allow the, deferred tax asset to be recovered,
e Deferred tax assets and liabilities are measured at the tax rates [and tclx lawsl that have 1ieen e11acted or substantively enacted at the n!portlng date and are expected to apply in the vear when the ,i,Sf!t Is "'1tlised or tl1e li~hlllty I• settlf\d. Deferred tax items are 1ccogr1i~ed in correlntio11 to the underlyir1q tf<ms,il:tlon either 111 tX.l or directly In equity.
Q Deferi ed tax assets amJ dd~rtcd tax HahUltir:'; ,1rf? of-fset if tJ legally ('111"nrceable right t:X!'.;t.s to SElt off CU! ll'nt tax dsset& agai11'.J UI! rent tax littbilitlc'.;. C MAT / AMT Credit; Elltltlement;
a Minimum Alternate Tax [MAT] / Alternate Minimum Tax LAMT] paid In a year 1s cl1arged to the Statement of Profit and LOss es current tax, b The Group recognizes MAT/ AMT credit available as an asset ll!!sed on historical experience of actual utlllsatlon of wch <:redit and only when and to the eJ<tent there
is a convincing evidence that the Group will pay normal income tax during the speclfted period 1.e., the period for wh1cl1 MAT / AMT credit iS allowed to Ile carried forward. Such asset, if any r·(~coqnfsed, is reviewed ot each balance sheet date and Uie cai I ying amount is written down to th~ extent there IS no !ornJ(:r a convincing evidence that the Group wrll Ile liable to pay normal tax during the sprcrtred period.
8 Property, Plant and l:quipment: A Freehold land Is carried at historical cost. All other Items of Property, Plant and Equipment are stated at historical cost of acquisition/construction less accumulated
depreciation and impairment loss. Hlstoncal cost [Net of Input tax credit received/ receivable] Includes related expenditure and pre-operative & project expenses for the period up to completion of construction/ assets are ready fur its intended use, if the recognltlon criteria are met and the present value ot the expected cost for the decommissioning of an asset after its use Is includt:d ln the cost or the respective asset if the recognition criteria for a provision arc met. The carrying amount of any component accounted for as a separate asset ls derecognlsed when replaced, All other repairs and maintenance costs charged to the statement of profit and loss during the reporting period in which they are incurred, unless they meet the recognition criteria for ci1p1talisatlon lmder Property, Plant and Equipment. On transition to Ind AS, the Group has elected to continue with the carrying value of all Its property, plant and equipment recognised as at April 1, 2015 measured as per the previous GMP and use that carrying value as the deemed cost of the property, plan and equipment.
fl Where components of an asset are Significant In value in relation to the total value of the asset as a whole, and they have substantially different economic lives as compared to principal item of the asset, they are recognised separately as independent ltt:rns and are depreciated over their estimated economic useful lives,
C Depreciation on tangible assets is provided on "straight line method" based on the useful lives as prescribed under Schedule II of the Companies Act, 2013, The management believes that these estimated useful llves are realistic and reflect fair approximation of the penod over which the assets are likely to be used. However, management reviews the residual values, useful lives and methods of depreciation of property, plant and equipment at each reporting period end and any revision to these is recognised prospectively in current and future periods.
D Depreciation on impaired assets Is calculated on Its residual value, if any, on a systematic basis over its remaining useful life. E Depreclatron on additions/ disposals of the Property, Plant and Equrpment during the year is provided on pro-rata basis according to the period during which assets are
used. F Where the actual cost of purchase of an asset is below INR 10,000/·, the depreciation is provided@ 100%, G Capital work in progress is stated at cost less accumulated impairment loss, if any, H An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from
its use or drsposaL Any gain or loss arising on de-recognition of the asset [calculated as the difference between tl1e net disposal proceeds and the carrying amount of the asset] is included in the income statement when the asset is derecognised,
A !ntllnglble assets mqulffitl :J<<fl<11C\Ully ir,; mo111u,,,,1 "" ir11ti~I r«ognltlon at c:os1 da1- ot acquisition. 1 n11owi!11, ,n,ual rec:ognltloo, lntc111q1b1<., -~~ ere c:11rrled at
(if lntlnglbht anotit ;1,x-1u11 (•d m bUBlnm combtnt1t1n11 o,t1n· fair value at ttv: ¥iv •-JCCumulated amt;rtt\11-":1Lic1n ,111d accumulated lmµ,·111 m<tnt kif,<_;1:·•·5,
ll Internally generat<'-0 111l;mn1t.1les am not t:11f)ltllll1r,,<1 ,,r11 .. ! tlw ,'Qllm!d W<Jl(lndl'l11i;; incurred.
rnth·, 11:(1 In iltltlll'lllnt uf pwtit tllld !OR In tht period "' wh1t1, 111e 41.l(l)llndlture
C Goodwill , 111•,11 l(J i 10 a~Ui!JiitiOO of D Traidc Mdl b, 11'1 I mltal KfifJW<wht:rvv I <111d (Jlfojr
E Qip1!,1l1'..,cd (t"l:,t· 111curr@d t:e,watd"u, !1tir"d1,r,1-/ d!·W:k;pmetnt tlrti•-' r,11,Jpi1,111.-,,1t1on,
P Int~H1g1bl1: "-''-"'_,L'l:.o with lndeflnlm u:.,,_Jul d!'I riot ari10rtist,J1 !JL!t tw.:: tc;,...'t«J fer itttp&lrt110nL :.!!!!!1Ja!ly1 rlth@w lfldlViduu!ly 1.:_i1 at. U1(_' e11<,M•11@n,er~rJnu qriit 1,_,v1_•1 !IJ!t ctsc1essment of lnd1f1111tc 11¥;, is ril\llewed annuallv tu ,1<,t~r,r,,,,., whether 1h11 ir1deii111v.• 1,k ,,mtlnuu to be 1ur,111;rw,,1,,. 11 ,,et:, trnl chllngt in W!llful lilt lnd@finltl! w nrn1:e Is made on m p11,,,1.1,·1tive b.tsls,
G An Item of lnt.angil,1<.1 lilltill!ly ntcll!lnlHd IS a,,,,ic,,,,mi,,cd upon dlSpoRI (ll wl,t,11110 f;11,1re economic bcneli\•i ,,xp~ from It;; IJ™' rn (h'.,r,Q!llli. Any gain or lo,.,; eri,lng on de•recoonition of lh,• ;1Blll: [Clllculatlllc! "'• ti,,, ctlff'l!tYll'IOII ~ thl· 1111, dlCTfl\)"11! p!'QClll!ds and th~ (;ll, 1v111<1 "rnount of 1h11 auetl 1,, 1i1cl11<J,,J ,n ttlt ~ont of µroflt And Ins~ when the Oa,;ij! IS dA""""'lhi""<l,
10 8-rch and DevelO{llllllltt Coill:1 A Ex~11di!.l111; Oil f('~tch and di\ldt_!J)lflt!tl! !', 1 I 1,1t'Q~i tQ the Sta1,:nti·t1l nt 1111.1r-1t and U;)S~ tJf th1' y1 ',l1 111 Wll!t !1 it h& lnt.Un-00, I Capital t~XJK~llChlure on ~March ilhl d(•\.#-!IPI )!\i!_'I 1t Ii givtffl: tt\0 \Ji ',1!fll(Jnt ill Pt'OPiftY1 Plt1!!l ,\lid r-:il\!ll-lfilf#l"lts
11 llom,wing costs: A Borrowing costs oonsist uf 111\!,1"!!!1: and other bom,w11,9 that are lnCUrrtttl 111 C()t1nec.t101i With th~ borfowili\1 nl 1und~. Other borrowln<.i 1nduilc ancllltry Chargl!l!
at the ume ot aequ1i1t1on 01 a f1narn:lal liability, WIJirh rl!C119n1Nd 11 perm~ rn<•thnd. B Borrowing costs that "''' d<i'il!Ctly .tttrlbutal:llt! to tll,· i11,1uiiitii.111/ oon!ltl'UC:tlcm of ij qu,My,ng ~s• are Cllpitilli!l('(J a,; p,11t of HIil com: of such a,,_, up to ttie dllltil the assets
am ready for their 11itl'nded us~ 12 Expenditure during the Construction Perlocl1
The expcnd1tu1c~ 1,,c1d~ntal to the ,~xf'.i.H"l',,1u11/ n1_:w pro~ are all( 1( ,1tt}d to !'1 r11,erty1 Plant and I qt11pn11 •r1t 111 the year of t:'OtnnH:11< 1 •n1e11t of the (',ommen:tal procluct1n11
13 Impairment of Asseu11 Tht-: Prope1ty, Pl,::int and Equ1pmt!!11l <111d 111V1tl(J1Ule assets ar& t:t;•Jcd frn i111p.iii'ffli!H'1t whenever (•vi:~11\'. 01 1n c1rcum•.1,.1nce$ md1c,1te that the carry1nq ,1rnrn_1nt may not be irmv~~iahlt!."· An lrnpairrni!nt In•,•, 1,,u11111ised for the aniuunt l>Y wlw.;I1 the auet's can yuHJ ;1,n91u1t ltij r0CO\t(•r.1!)h-: ,11H0tmt. The recoverabk• ,u11{H1f1t ts t.t\$
high~• ol "" d.....t'Halr value I,;;<,; Wii~Hll llto,W$111 ann VAiue In UW, I or tilij pl.trl)O'll!!S of dS~ll\j Ullp.llfllll/nt the M'l<"tS ~,~ ~•wiiw ot the lowest l@Vll!hi rv, wl11<;h u,~re are separately ldentitiablu Cds!1 l!ows Which are 1,11ndy mdl!!P'llndent ofth@ CHh mllow,, from other allHl:I or groups of c1<.s~ts (cash genmtinQ ,rn,tsJ. Non•flnaru:lal auets other than gOOdwlll lhat suitt,re<:i an Impairment los;, drc >l'!Vlewed fer posslbiti mve1'li/1I of 11np!!irm1111t et tht "'1d or Bl!t!1 r<IPC)rtlng period. Ali lmlJllinnent IO!IS ts charged to the. Statement of P, om ,ind Loss In the year In w! nch dn ,%:,et IS ld<lfltlftllCI a1; ltn!lllirt<L f11<.' Impairment loss rc,oqnl!IOO in prior accountlnq pe, !Od it ,eversed If there has been a change In the ,.,,urnat,• of mcovmble amount.
14 Inventories: lnve11tones a1e v.:ilued at the lowt·t uf ny,t ,nu1 n~ realisable v~luc:. C():,t . mc11rred in brfnging <.·ach pniduc.l 10 its present loc:.:1tio11 a11d condition are acoount(•d 101
follows: A Raw Materials, Stores & Spare Patts, i-\1ck111q Mr1U!r1alsi Finl~hed c;ond1,, Strn k in .. Trade and Woik. 111 r11(><;Jrt;::r~ are veil.JOO at lowt·i of rm,t and net realisable v<1!uc
B Cost (Net of CENVAT and Input tax credit avall~.dJ or Raw Materials, Stores & Sr,1m Pait:,, Pecking Materials, Finl,hed Goods & Stod<•ln·Trade is determined on Movln9 Average Method.
C Costs of Finished Goods and works•in•Progress are detem1intld by taking ma1e1111! cost [N,11: of Ci!NVAT and lnr,111 t~x credit availed], 1abot1r imd rel<!Vant appropriate overheads based on the normal operating capaclt:y, but excluding borrowing co:,ts, Net mallsable value is the estimated Mllln~ prl<>! 10 the ordinary course of busln!l$$, less esU!l1ffild c:o!ll!I of romplet1on and t'he MtlmatM co,t:s necessary Ill make the !!ale. Write down of inventories to net r("'d!I:,dlJk vdltM rs rocognlsed ,-]'; ijFl exp1•n:;1.~'.l and rncluded on "t ·111mgcts In 1nver1torie.'1 of I 11n:J1e<1 qoo1J;; Work .. in~progres~, r111rl '.--itock-in~ Tradt>:" nnd "Cnc;t of Materiel Cons;i 1rn1-xJl1 m th(-' 1 elevant note In t!1e Stnterni:-"!1 it of Profit and LO;,•,
1S cash and cash Equivalents: cash and Cash equivalents for the puqJo',e of Cash Flow Staten1t-~11L comp11:_,e cash and cheQuefi in ti,md, bank balances, Clt'rnc1nd depo~~its with banks WIK:rt:~ the onginal matunty is three months or less.
16 Leases: As a lessee: The determlna~on of whether dn arrangement !s [or contains] a lease Is based on the subsl:dnce of the arr~ngernent at the Inception of the !ease. Lease under which the Group assumes porentia!!y al! the 1isK and rewards or ownership are classlfled as finance ie,sse. When acquired, such assets are c:aplt:aliSt!d at fair value or present value of the minimum lease payment at the inception of the lease, whlch(:ver Is lowi:.::r. Lease payment~; ur1dcr orx?rating leases are recognised .:is an expe'nses on straight linP basis in Net Profit in the statement of profit <md loss over the lease term, unless the payments are structured to increase in line with expect.eel general inflation to comµcnsate lessor's expected inflationary cost 111C1 edses.
Asa lessor: Lease income from operating lea~es where the Group ls lessor is ret:0\;;jnis~d in income on a '.;>lr~1i~lit l1ni: l1~$!$ over the 1~$i;; t~!ll\ L.m!~ss the recelptS dre :;tn..1ctured to increase in line with expected 9eneral Inflation to compensate for the i!Xpected infintinnary C01!t incmases. ihe respective leased assets are included ,n the balance sheet based on their nature.
17 Provisions, Contingent Liabilities and Contingent Assets: A Provisions are recognised when the Group has a present obligation as a result ot past events and It Is probable that the outflow of resources w,11 be required to settle the
obligation and in respect of which reliable estimates can be made. A disclosure for contingent liability Is made when there is a possible obligation, that may, but probably will not require an outflow Of resources. w1,en there IS a possible obligation or a present obligation ,n respect of which the likelihood of outflow of resources ,s remote, no provision/ ciisi:loliiure is made, Provii::;ioni: ,"Jnd contingiencief:i are n~vir-wcd ::it r•,:1ch balance sheet date: ond adjusted to reflect tl1c correct mar,ege.mtnt estimates. C:,ntIny~nt assets are not recognised but are disclosed separately in flnanci?il statements.
B If the effect of the time-value of money ,s material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. 18 Provision for Product Expiry Claims:
Provisions for product expiry related costs are recognised when the product is sold to the customer. Initial recognition Is based on historical e.xperlence. The Initial estimate of product expiry claim related costs Is revised annually.
19 Employee Benefits: A Short term obligations:
Liabillt1es for wages and salaries, including leave encashments that are expected to be settled wl1o!ly w1thm 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting and are measured ay the amounts expected to be paid when the liabilities are settled. The liabilities ;;ire prc:::;cntcd as current employee benefit obligations in the balance sheet.
" Leave Wages and Siek U111ve1 The liabilitle~ for earm~1 I"'9ve and slci< lf!ilw• ""' 11r1t ~),llf!Cl!ld to~ 11<:t11<»:1 w111,11y "ilthln 12 monthu il<!rl1,1 ,1t1N thllf lltl1d or the ,,.,,,r;,:1 111 wliith the imployer,,, render the related service, They are ther;iton•, m,,,,:r1nl<i at the pfUflflt v,1iu~ or ,:xp,,,t!ld Mure paym,,r11;, 1u 11,,,<1, In ruQl!JCt of upto the end of ''"' 1,,r,orting period using u,e ,inlt erlldlt millht 1<.:1, ,1e1 ,:m111111d by mc:tu1rlal vdli 1,,1i,1n, l)llrlormed by on 10,1,,,.,,,,,,1,Mt ~n:' 111::rounttd using the m<1rk0t yi1;!111: ,7t tho rw';rit,11 ti11;1t httwi !:h0 ttfiiiF'. .117jirtrxtm:ating to U'w term~ r;f thf" ~ru"t !f)f.l;~fk
!11v l,1rn1p operates a defitH:tl bcndil ~_Jta1tutty With I !JlltnhHl1(m•; be f'nffldt tt::I t\ ·,1'p;i1,1ldy gjfjft!!niste~ ftmd tl11nr1qh ! Ill·' lniWt'drtet: Ct'!f'pOf,3tK1!l ul !1wtli:t
through employees Group Gratuity Plan, Tlk; "' ,Hllffl: fllCCQMiN!l if1 th,· hul~fle,! shm In fMP<:d tJI ci~ti,wd ilemlflt gmtulty ,,1~11 lire pr,.'"'1t VIIUI or tl11> defined benefit pt,111 obligation mt the end or t11~ repn,11r1i, p!lrtod !tu tht Vi1!ll~ 01 Hie plan 8!111111:S, i11r1 Ll~b1hr1,.,., with rfllll/llrd 1:!l tire• t'.ir,,t111ty Pl&n ere dlll:llrmlnf!d by actuarial w,luation, pe1form!!d by an lndii!OOhtir•nt ,;,111my, et Heh blllt11<'.e, ullng the projt,:1"1 r,nil q,s'!J1t mlllhOl:I, The present v,1lue of the cl'1flned ll!!nllflt Ohliq~t,or, d~nornlnmt!ld In !NI\,,, ,1,,1,,m,in,,r1 lly dlflCOunUng th~ m,tm,,,1;,tl Mure ,:a5h outl1ow,, l)y 11'1,,ii·riee te thll m1r1<,11 yields at the reporting p,mod on qovlill'MmQnt l!01 rd$ that hav• tlill'mi approximat111Q to ti 111! t,!lffl• of tl'ul f!llatta<l ubllQiltion, l'hr~ /lf:t: mterest cost In calculdlt_'d liy nrii,lv!ng tr,~ dlte0un11nq rt1!1' 11) 1111' net b½'/an~ of 111(• I k;h!H'tl tin1ieflt obllUitl<m 111uJ ti I!~ f111r V,lhJ~ of plan$!~:,. 1.;IJ{ !1 (f1:,1i.:; dn! ir1d1Hl(:<l in 0rnployee benet7t i~xperu;("., 111 1he stettrr11ant of 1•ruflf' ,11111 t
Ht1 1n1'<1':auirrnents gains or a1T_,11u1 1h,m occur ducdly in "other COrnprchr'.1l',iV1-: lftd ;,,rt• Ill( li1ilr•{I 1(1
ill<iiloutemeots are not reclas,1r,..i 1.u IJIOftt or lnss tn 5U~u•Hl IJIIIIWll,
in j1! l11,)1'1.1l d'>',Untf:,ti()fi!i are f'(iCOq!!!',Wd
tarhifllJ', Ill lilt' ',(dlefl;lfilfit of chatl(Jt,:'; Ill 1't'jlll(-Y
The Group recognises the following chang!'s ill u..i net tlc"ned bl#nllllt obliq,,flon a', ,111 i;XpenN In tl'tfl 11;,,1,:1,11,lll of profltand la: I Service costs comprising current 111rvk" <lllitl!, r,:i:,1 •'.181'\11'11 costs, 911n,, ,,ml I1'.l!l!l,!li on eurt.llllm<llfll:I; '"'" nnll rouMe 11111:tfements; II Net Interest expense or Income.
c Defined Cotttribution Plans• Provident Fund Contxibutiont
!rt tha ptbt'l(irl H1 wlli(.'.11 tlit;y in the bitLu1(i' sht"PL l(@"
L11q1lJle lc>rnployees of the Group 1e(.t·1vr· !Jl:'Jneflts from a oi r1vi(11-•11t fuiul, which ill a defh1, ,, 1 { nn111lHJt11i11 plan, Both the t•hi11111,, tht Gren111 111.1!1,(• n101111dy contnhutions t-o the provident fund plan i~ual to a 1"J('.f(('r-it,_1qe ofth0 c:ovttrl·d r•1111iliiy1-:r:'s Amount.•_, {(llh·t!.i:d the provldt11t f11n1J rit,in "re deposited in a government adrnm1'.;t(•1·~(1 provident fund. (i1(1qp I 1;1ve no further obliCft-1l1rn1 \{) t!H~ plan ill, n1onth!y f ,H1lributiOt1$. Suell 1:ont11butio11s df'tt accounted for as defined cont11bt1tirn1 11!,111:; and art tee0g!1i·:~1tJ ,1•,, •111111try~§ OOneflt ilJXtl,·r1',1"''' wl11,~r1 'Jdt,_.111t-~nt (lf profit and IO!iiS,
C Employee Separation Costs: The compensation paid to the employees under Voluntary Retirement Sch8mt 1,, exp,,need in l:he yur or paym~nt.
20 Olvidertdl : The final dividend on shares is recorded as a liability on th,, ,1atm of appl'OVII t1y the sl liH,:lmlders and lntef'ltll dividend r,ICO!'ded a/i liability Oil th~ !ldti:: of declera~on ~Y the Parent's Board of Directors.
21 excise Duty: Exc:1c_;e duty is accounte,rat a concess1011c1I r;.1te as per Notlficatiol! Nn J/2011..CE wlthout ( rNV/\l credit in Zydu,, Wdlm_•;,,, 1.1rr11ood, wh~reas in tilt~ P211tnerst1ip Firm sdrne is accounted net of recredit l)er1d 1b and CENVAT avru1,,c1 011 1np111, ,, capiteil goods a11<1 ',1 •rvices.
22 Financial Instruments: A financial mstrument is any contract tli~1t glvc'~ rise to a financl,-11 d'.,<PJ- n! (.Jnt• ~ntlty and a fine1110,1I l1,1!Jil1ty or eq:1,1.ity lnstrurrwnt of ~motl1i'r' ~ntitv,
A Financial assets: a Initial recognition and measurementl
All financial assets are recognised lnltlally dt fai, value µIIJS, In the caM 01 financial asS<Jts not recorded at fai, value through profit or loss, trnnsactlon costs thmt are attributable to the acquisition of the financial asset. Purchases or Ales Of flno11u,,I iJc,ti<ll:S that require dcllvecy of as,,et& within a ijme frctme established by regulation oroonveM0/1 m the market plaee [~Ulijr way trades] am ~nl!i!IM on the .ett1~111c,·,t d1t~1 l.@. 1 thediiw U1"t the G1·nu~ Mt'!I~ !fl ~ui,ha!it or :.cll lhessllt'lt,
b Subsequent measurement: For purposes of subsequent measurement, tindrlCial assets are dd'./,,i!11.xl d0 follows:
Investment in mutual funds instruments at fair value throt1(.1!1 p1 ur1t. 01· loss [FVTPL]: fVTPL is for investment in mutual funds instruments, Any sucll 1nst1urnuntz, which doo, not meet the criteria for cateqon1dt1on ,-it arnortl:t:~d cost. or JS FVTOCJF is ClasSlnea as a! fV I Pl. Such instruments included within the FVTPL. cat11g0,y are measured at flllr value with ali changes recognll!E!d in the P&L.
c oe~111t1om · A financial asset [or, wi1er~ applicable, a part of a f1nancIa1 asset] Is prlmartly der~cogn,sed (1.e, removed frOtn t11e Group"s tlalance sheet] when:
i The rights to rece111e cash flows from the asset have expired, or 11 The Group has transferred its rights to receive cash tlows from the asset o, has assumed an obllgatlon to pay the received cash flows In full without material delay to
a third party under a 'pass-through' arrangement; and elth,,, [al tl1c Graup has transferred substantially all the nsks and rewards of the asset, or [bl the Grnup has neither transferred nor retained substantially all the riskS t1rKI I ewa1 ct, ot' the asset, but hat;; tra11:,forrecJ control of the a'>Sd:,
When the Group has transferred its 1ights to receive cash flows from d" ,,cset or has entered into a pass through arrang,,ment, it ew,luates if and to whc1t extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and I ewar ds of the asset, nor transterred control of the asset, the Group continues to recognise the transferred a:s:;ct to the W<tent of the Group's continuing involvement. In that case, the Group also recognises an associated liability, The transferred asset and the associated liablllty are meas~red Oil a hasis that reflects the rights alld obligations that the Group has ratalned, When the Grovp ha6 tran$ferred the ris~, and reward& of ownership of the flnanclil 1111111:, the S/lmP is rlc,""'1Qnlvri,
d Impairment of financial assets: In accordance with Ind AS 109, the Group applies expected credit loss [tCLJ rnodel for measurement and recognition of Impairment loss on the following financial assets and credit risk exposure,
a Financial assets that are debt instruments, and are measured at amortised cost b Trade receivables or any contractual right to receive cash or another financial asset c FinJnciJJ ;:i::;:;ets that are debt instruments and are measurecl ;;is at FVTOCI
The Group follows 'simplified approach' for recognition of impairment loss allowance on Point c provided above. The appllcation of sirnpl,fied approach does not require the Group to track changes In credit nsk. Rather, It requires the Group to recognise the impairment loss allowance based on lifetime ECLs at each reporting date, nght from Its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a significant lncreasP. In the credit risk since initial recognition. If credit risk has not increased signiftcantly, 12•month ECL 1s used to provide for Impairment loss. However, if credit risk has Increased significantly, lifetime ECL Is used. If, In a subsequent period credit quality of the Instrument Improves such that there is no longer a significant Increase in credit risk since Initial recognition, then the entity reverts to recognising impairment loss allowance based on 12·-month ECL.
290
l\l!_)le~ 2 .. _s1911ifieant Ae~:ou,_;i~t~<:~}t· Llktime I CL are U1e M<Pectlld l)Ql'IIOl';;r;,1;; llfeti1ile kCL which 1c,:.11il-& from d\1foUil IM!lll:S t1,11 ,1'1!! w11111n 12 m,,,1ttw .. 1fmr tilt! l•T"''ting dllf:I; , .• the dl~,,,,.n,,, blltwe;;n ,,11 ,:11ntraet:u"1 flowt t1i..t
ftuWll !Nit thu c11tlty '""l'f!U; m ,,.,,.lvt!! lie., ~II Cll~h •tH)rtfu!IS1, dlil<:Oullt<itci <ltlhfil tlliQ!!l81 Li!R, i!\lli I\N,-Jt ]I ( C l or fif)v1 'I ·-,,111
l"C11' 35$M(,11 IIJ ilH in (_!!'d!L fi!ilk and IHljk)II rn~nt lo,',, tilt.' Group i.t11lil111 Iii,\$ firtaflr HI !I li,tf'"!.Jfl)f;fit', ')1·1 th1~ l;)aijj~ (":,J' ·,I I, 11t¥,l credl·! I hk. rllir~cti!fl:Ji( ',
B fu111ncli1I li.ill11itlll'!lt • Initilll r«<>onitlnn end me1isun1ment1
l·inaodal llat>llitil,:: &re cla1:Sifl1,.1. at tn1t1111 1111,,ndal li~ti,111,Qli at fair through pr0fit 1l!' loW!, if,,,,,s ~nd b,:m,,w111y1, p,11yab1i•~, ur as darlv,c1Wc;J1 desltH1c'11c:i1 as h~sw1!) u·i:'itrumenr•. in ,1f'I lwdgtf i-\p11H1pt-1ate, All 1ln.J111:11i liabi!1t11", ,1(\1! r~1r11•.1·d 111ltially .ir nw valut i11d, u1 the ni 111,11'1$ amJ borrow1111J\, flFld ~y.1hlt:.',, 11@1: of d111•1 tly \ilttMbUtflhli· !.r,:1nstetl0!1
b Subuq11enl t1l<l4Sll-111: <;111J9Elquen~y 1111 t inanclsl t1;itlilitt,,s are m,..,,.,,, ,,d as amM1•,tJiJ eost: @, ·nt fo.- Loans 1,nd 1,,,,·rowlng1:, de!lll:rlbed bd, 1w: loon~ llnd bom>wflHl~t A~r uut1,1I 1!1~9t~bt•,111r1fj loans 4!J1d \HI' 11J('i1$Ured t1! i1fihiltifiw.d 00\f 11',lll\j the l?JE lllt":\!lOQ, G~ill', f11ld ,~ dH'
in profil 1)1 th(• liabHltie!, dft' d(!fOCOQfW,i'd .-.lb 11& l!it(J\J()h !II{ ,1mu1tl~t!Oi'1 p!!H 1".;.S, Amt:.ifl1',t'.d l t)$'t i& ctili_ul:1t1::d by ta:kmq 1111.IJ tf~tll dllY
or premium on erqulsltlon and h',§ or 00>ts 111t1t are an i11\1liJr.il !)llrt Cf th,, mt 'The e1R an1ort!Aticn m l11<ludlld a, 111,,,r,,:t:, i:ostll In th,: illllt€!mt,,t Of r,mflt lrl<J lor;ri c DerecG11nltJm1,
A flna11ci,1! Habilltv i·. ,1~1•<:0gm:,e11 wh11.11 the ohli~J<1iirn1 undt'}! the lirtbillty 1, an.ot!w1 Hom tht1 S.1111\' Ofl ·,ul>:,!,Jntltll!y d1llr~rr-1)t tel't'fU~, i.H 1!1i 00:rmt of .-~n treat.ell as th~ cier<;:i;OIJ111\Jl)fl of tJ,~ un11inal ltab11ily 011d the 1ccug111t1on nf.., 11c:w statom1111t ot p, oflt or IOllS,
d Embeddllld dcrivatl,,.1
hf1;111ri'11 liability i•c ,,•pl;i,:;,d by ;ar1 su11rA~11111aiHy moi1111i:d, at1 1'x(h.-11'1gct or 111od1l1tl'UOn !t
in U1e ~.J;Pift.tivi.: 1..:urry1ng i.!nioun!J ifl rtc:OlJ!HS1"''<J In th~
An en1[)f!dd\KI de:r1Vi1\JV1' I<;; a oompnnni1! or i hyhnd ]uJrnbh1e("/l 11r.tnJm~11t tli.11 tth() lnduck:, d nnn,.deriv{1t1v1' 11(}$t oont1 ,\I"! with ttre f'lJ!'( 1 that !K'Jlllt' ut the i:asn flows or I h1J oornbh11 ·d i11•,trurnwn1 v,11y 1n a way .:~1111ilP1f to~ !,t,·1nrlnkme da1·Jv,;1t1vt:. Otai1vat1wf, i,;ntbedde<:J 111 di! otner Ii();..:.\ 1 rn1tf&et"$ tm· dV.:ounted 101 ,v, "~rate derlvotiV\!i and rl'Cordllld at fair valu" ,f the11' ~11c chc1r~<l1t!nlltl<Z and ti~lui ~"' not clo11111y l'l!l!~tlld to th""" c,I the h<>ot contmt:!$ and 1:htil ho~t cout:r11.ta am not 11111<1 for tra<l1nq or deslgn,1trx1 at !'air value though profit 01 IOU, Thes,, ernl:teddl!d ct~nv,,1lv<!! art· rnc<lr.Ured at ts,111 value wltl'i chanoes In t'!,,r w,lu>!I recogn,sed In p, ofit or IOll!,, u11I- deslQnau,1 ,,s effective li(J(lQlf1ll lnt\rnmmts.
c Reclauifi(atiort of ffn,mdal a$8«$~ The CiJUilP deterfflirn.", (l;1sfiifiCStin11 (J( financial ii'.i,(~1":3 and l/nl11l1t·1t.'.), on lnlt1,II fhognit-lon. /\llr·1 h![tlal rf·rm1rnt1on, FtO H'(_"lti•,'.:,jfiaJtion p_, l!ldde for f-lnr1nckll as~ which are equity uistrumt,nts and flnancml liabilltles, For financial 1:sscts which are ,tc,bt instrume11ts, ,, reclall!iilitat"m Is mMe 01,ty If then:, is chang1, 1n the business motliil for managlnq t11ose assets. Ch/lngl!i! to tM b11slness mOll•JI ,,re expected tn be lnfreque11t.The Grour's 1<1nl0r m~naqement dett:m1i11cs change In the bus1ne'l" model a, A res11lt of exl"t'n~I or lnt<Jrnal eh"n!J<!!li wl"lirh ~F!l s1yn10C<tnt tn the G,ou~·~ or,,'rnbon$. ~11th tltdnge$ "re ""-'ldent to ~xt;;mal pa<tlf!'I. /\ thange In the bu:,.1ness mOdel rn,c1u~, when the c-:iroup eltht'r hc<1111s or ~,-ic,1•1\ tn perforn1 ;,m ,H tlvity thnt 1:, sl(Jnificant tv it', l)f)erlttiOn'.,. ff t.he Gr0t.1p 1cd.-!lJSifies fin.mu.ii @soots, it ap1.1l11_'s t!ie reclas&lfKdtton prost>t ~ct1vely from UH· 1 t0Clansifh.,1t1or\ date whir I 1 is the first· dJy ,,f the lo1m('.diately next I L'IJtJrting l)E'11ud 1ullowlng ti 1r: d1ange ifl business mC)(fCI per Ind A~ l 09,
D Offsetting of flnancial lnstruments1 Flna:ndal assets and fin,-H1Cial Uabilitll;!..½ dre offs!'! ;111d the nert.. d!llntH1t is reprnh-3cl in the b<1idrut": sheet 1r U1t•.1c 1s a CL111t'.11tly enforc1~db!c !c~al right to offset the recognb •ti amount:·. ,md there ls c.111 1ntentlon to settle on a net 11.--i:;1s, to realise tll(• ,is§ets and ~,L'!llt'! the Ual11l1t1('S slmulta11(~mr,1v.
23 Fair Value Mea~uroment: .Fair value IS the price that would be received to sell dn asset or pa,d to tran,,rer a liability ,n an orderly transaction l)etw,,en market pmtlclpants at tl1e me,.;surement date. The fair value mt!ilsumment 19 b,,,it!d on the pmsun,µtlon thaL ll ,e transactlo,, tu sell the asset'" transter the 11,l"llity takes piact either:
a In the p1111clpal market loi the assc10111ablllty, 01
!) In the absence of a pi 111C1pal market, m the most ddv,1ntcigeous nkirket for thEi d'.,St:l or habmtv The prlncl pal or the most advontageou~ rrn,i ket must be oo:.esslble by the i.roup. The fair value of an asset or a liability Is meosured using the assumptions that rnarket p.i,Ucipants woultl use when pricing the a;;set or liability, assum,~g that market participants act In their !!i:Onom,c best lnb!rest. A fair value measurement or " m;,n-flnannal a<:set takes into account a marl<li!I: partlc11ll!nl's ability to 9eninte economic btmefit6 by udny thu Jot.ct- in its hlghe:-:it mid be::l.lt ll5t:. (11 bi selllng 1t. lv a11othe1 111&kd j)drUt::lp.;111t. lJ1dt would u:i; r!u~ asset 1n !rs HiQh9 anci tiet.t use. lt1e \:Jroup uses valuation techniques that are <.1ppropriate 1n the circumstr1nn~s and for whirh StJffi<;.lr->nt· rt~1t., a~ aw11!~1blq to meas.111t' !'air valuta; 111,-1:'.lrriiiing ttiP ur:i• of rf!!lmv._rnt 0Mervabl~ inputs and minimising the use of unohservable Inputs. /\II assets and liabilities for which fair value IS measured or disclosed In the financial statements are categorised within the fair value hiera,ct1y, described as follows, ilased on the low@st level input that Is significant to the fair value measurement as a whole,
a Level 1 Quoted [unadJusted] market prices in active markets for 1dentil:a1 as:;1:lo or llablliti<,s b Level 2 Valuation techniques for which the lowest level Input tliat 1•; signlfic.int to the fair value measurement ,s dlrectfy o, indirectly ob,,e, vable e Level 3 - Valuation techniques for which the lowest level Input that Is significant to the fa,, value measurement Is unobservable
For assets and liabilities that are recognised In the financial statements on a recurting basis, the Group determines whether transfers have occt1rred between levels in the hierarchy by re-assessing categorisation [based on the lowest level Input that IS signifku11t to the foir value measuremr>nt as a whole] at the end of each reportinn period.
24 Segment Reporting: Operating segments are reported In a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Group.
25 Earnings per Share: Boele cornlng1 per ,1101@ 8"' calculated by dlvii.liny LI 1u mt µruflt ur les, rexc1ud111g otM~1- COi11µ,'el1MSI~~ 111cun1e J tu, tli~ yedr alttfbul:dble to equliy shareNOlders by the weighted avnnge number of equity shares out$t;tn(Jinq during the yeqr, The we!ghtrrl ;ivnr~g~ nwnhr-r nf Pfl!lity (:har<>-~ outstein,11n1J durlng the yi::>a1" ii adj1.JSt';t{] for evenU. such as bonus issue, bonus element in a right Issue, shares spilt and reserve share spHts [consolidation of shares] that have d1anged the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other comprehensive income] for the year attributable to equ,iy share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
B Standards issued but not yet effective: ln March 2018, the Ministry of Corporate Affairs [MCA] issued the Companies [Indian Accounting Standards] Amendment Rules, 2018 notifying Ind AS 115 "Revenue from Contract with Customers" and Appendix B to Ind AS 21 "Foreign currency transactions and advance consideration". Both these amendments are applicable to the Group from April 1, 2018. Ind AS 115: On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers 1n an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers. The standard permits two possible methods of transition: a) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting pe,iod presented inaccordance with Ind AS 8, Accounting Po11c,es, Changes ,n Accounting Estimates and Errors. b) Retrospectively with cumulative effect of initially applying the standard recognized at the date of Initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial period beginning on or after April 1, 2018. Toe Group will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly, comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant. Appendix B to Ind AS 21: Appendix B to Ind AS 21 "Foreign currency transactions and advance consideration" clarifies the date of transaction for the purpose of determining the exchange rate to use on Initial recognition of the related asset, expense or Income, when an entity has received or paid advance consideration In a foreign currency. This amendment will come into force from April 1, 2018. The Group has evaluated the effect of this on the financial statements and the impact is not material.
291
Grot,·, lllo(k' A', ,II Millf'f'l 3.t,/(ll(J
Additions !llsposals Other adjustments A~ lit March 31, 2017 Additions Disposals Other ad)uritments
! 1f•l'i'u)lfl
1.dm.1 bi!llQ
/1) ~70 0 0 11
0 Q
0 0
llJJildlrull
1,715 !,400
0
)O()
.l\r(fo~~ Wdhm~•,; Uoi'li.r-""''~ 10 the cv11:,.t!l,tl.,~_.,'.•_I_ ~ hhl_ftelil ~*""'-~·~·-· -··--
l'l,1111 i,1111'1
l 1JUl!Jl!\1;t1\
1,,','1-1
~
ilflHI'
LUUIJ)lll1Jll
~~~rch31,,,:zo~1s~e~:•...,,;11o.""~-~~~~,,~~~~-~,0 ~----J~---J~~--~~0 ~~~=·'•---.ai11 1 .. ~,nl'IICl11tion and ln
Im[Jdin11e11t Int t/11· y1•,11
Disposals As efit M<)i-th 31 1 )01/
Dept ecidllon f(w tile y1~~11
lmpd11-rnc11t: fnr t!H• yeilf
01:;po:;,il'.,
A'.; ;it M,11d1 Tl, 70Jfl
Nt!t Block:
As dt Ma1ch 31. 1 :?OJ/
As at March 31, )O!l-l
Note: 4· lntan Ible ill!Htlll
Gross Block: As at March 31,2016 Additions Disposals Other adjustments AS at March 31, 2017 Additions
Disposals Other adjustmer 1L
AS at March 31, 20Hl Amo1tisation and ImpdinnE!nt;
As at March 31,2016
Amortisation for the year
Impairment for the year
Disposals /v; ;it M;irrh '31, ;nn
Amortisation for the year Impairment fer the year Disposals Ps at March 31, 2018
Net Block: As at March 31, 2017 AS at March 31 2018
(Unsecured, Cons1de1<"'M Balance,, with Statuto1 v A1,11,oritll!ll Capital AdV,!1 !1~,!;$
rotal
Deferred rax Liabilities: Depreciation
Deferred Tax Ar,sc'b: E:mployee bene111s Provision for expiry and 8re111<ag11,; Total
AiterMte Minimum ta, Net Deferred Tax Liabilities
Out of above:
a Disclosed as Deferred Tax I .iabl1t1e1 b D1srlQ!llld ~R D~f;>rred Tax Asst>ls
As i'lt /\p1il l
ZilJ.!;i
496
l"hRn;JtlOI
1!1t' p1iNIOU!l
YB
4!S
llil.l:J.llllba A, ~l
M,:m.!1,ii
LQJ1.
541
68 5,700
B The r,et Deferred I dX !Expense,,, ui !NR (1,'74H) I I'11:vlou. Yetw u,1< (1,422) I LdklIs lot thi: yc,11 11~5 bl!e11 rldllil!!d / Cre,1,1,,J HI the St!it<Jfll<'l1t or Protit and LOSS,
C The Group offsets tax assets and habllitie£ If and only If it hH a l11<Jally '"nforc:ei,ble right to set off current tax assets and current tax hablllMs and the deferred tax a,.ets and deferred rax liabilltles relate to Income t,ixes levlfld by tll,, ,;ame tak authority,
1 he major components ot income tax expen~ ibr th~ yectrs Pnd"'1 Marci, ~1, 2018 and March ,t, 2017 ari•, Statement Of rofit and loss:
1--::----,---:-:-------------------·-·"''----Profit and lo.,, section: Current income tax: <.;urrent in,:ome tax charge Deferred taxi Relating to origination and r@V@rsal of temporary differences
Income tax expense reported in the statement of profit and loss
Reconciliation of tax ex ense and accountln
Profit before tax At India's statutory income tax rate Adjustments in respect of current income tax of previous years
Utilisation of previously unrecoanlsed tax 1osSP<; Effect of Non taxable Income
Effect of Special tax deductions Effect of Special tax deductions (S0IE)
Effect of MAT/ AMT Credit not accounted for
Effect of Unrecognised DTA/DTL
Non-deductible expenses for tax pur~:
12,400 4,307
5 0
0
(47) (4,079)
992 43
Other non-deductible expenses 7
Others 44 At the effective income tax rate of 8.84% (March 31, 2017: 10.26%) .,_..,.. ___ 1.,3 __ 2_$-t _____ 1 .... ,2 __ 7_2--1
Income tax expense reported in the statement of profit and loss 1,323 1,272
Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable profits elsewhere in the Group eligible for set off upto 15 years from the year in which the same is arises,and there are no other tax planning opportunities or other evidence of recoverability in the near future, If the Group was able to recognise all unrecognised deferred tax assets,MATcredit not recognised as at March 31, 2018 is INR 115 Lakhs in Zydus Wellness Limited and AMT credit not recognised as at March 31,2018 is INR 4817 Lakhs in Zydus wellness Sikkim.
Note: 9 • Current tax asset net : [Unsecured, Considered Good unless otherwise stated] Advance payment of Tax [Net of provision for taxation]
Total 99 99
293
I The hwentory Is valued at lower of cost and net reall11111:1le Vah;,;J. Cl11c.slfir,1tlon of lnventortes:
lnv/!Stment In Mutual Fund,, [Quoted] [Valuetl ,;·r;;,;, v,,IIH'
Reli~nce Liquidity Fund • Direct Plan • Crowtl, DSP Blackror;k Uquidity Fund Direct Pl~n • \MOWth JCJC! • Liquid • Direct Pion • Grvwll1
Total A Aggregate amount of quoted inv'11litm"nts B Explanations:
In "Nos.[']" figurns of previous year arr, ,t,,t,><I ,n [ ],
Not<11 12 • Trade receivables: Unsecured· Considered good: Less: Impairment allowance~ Total
Note: 13 • Cash and cash ulvalents: Balances with Banks • In Current Accounts Cash on Hand Total
Nolel 14 • 11lank balance other than cash and cash uivalent,: earmarkoo bnlance. with bank for Unpaid dlvidiimJ Fixed Deposit with banks Total
Note: 15 • Other c:ummt financial assets: [Unsecured, Considered Good] Others Total
Note: 16 • Other current assets: [lln51,r11rPri, 6,nsldt~ GC<,d] Balances with Statutory Authorities Advances to Suppliers Other Receivable Export Incentive Receivable Prepaid Expenses Total
)t',ll) U [OJ Jt,111/i,.nR['O]
0 tU<IQ!<itJ,\>/I
162 162
563 186 55 12 35
851
294
4150,00,Q{Hl r,1•; dt M,Jft h 31, 2017: 4r5(J,IJ{l,!HJ(lj
l!i:iully ol !NI• JO/• !le!Ch
t,'ijll<tlf, Suhsenllill and l'lllm•uri, 3:.in,n,089 [11u1: Mnrch :>m7: 3,$i(J,?2,089l f'quitY cihlrell of !NR 1or ,wJ1 1'111iy pw,:I up
'tOtlll A fher(, ,., no chtnge In tlw mIm~r,, oi 11~ultv lhll'tlli il!t lh•e 1,,.·gInnIng 1Jncl end Of t:M )'c'4r
Nunilµ-•r t)j e,fl,lrt''.), 1t the bt}g!ttfiir!t) ,Hid 1'11d oft ht Yi'$al'
B hd'.-, ( 111ly 1"111e dastt of oqulw ~;11r1r1::, l 1dv11111 a v11u1 of 1NH 10; (:,11 ti e:ae:11 !111l1h:r of l>l'nt1U1;dl!)Qf'tt!VOte Tli,· ~ropci~bvlll\'l~o;)Jd IS:~1JiiJ1'1l l11H1f•
l!Mlnt ,:;f lt4wliatio11 ol ch~ Group, the ~~i.aw ,1,~r~t1oldl!l'II cnuU.cl w µ1(>flf)i1:Jtin~~ ~h~,~ or U1"11 lml<:tln11 ,n the ll!NtS rama1n1n11 <1ncr •llstrtbutlon of 1111 pn:,for<1nti<1I a111ountl!.
C tletd1i,, (JI Shll1111holder holtlilJ(J mor~ than 5% Of IQQl'C!J&c, !"qllity ,·,1·,~re11 of INR 10/· !IW(:li fullv tliliduo; Cldlll Hi!i!lthc,11" Limil:i!<l
Nyml;,,i,r QI Shijl'c'S % to totl!I shari• 1101<11, ,u
C) Numbi!r ()I Slime·., lldd l)Y Holding Comp, 11 IY
C\1<111.i I tc'.dltJKl!Jre Limitffld
Note: 18 , Other u 1
(lenerl'II -ent11 [*] Bellance as per last Balanoo Sheet
Pair value through other l!lllnpr<ahensive lt1C11m11 [l'VTOCl] Ruerve, Balance a:, 11t'1 rri~t b.ilarice sheet [U!ssJ/ A(lrl: I I J,;h1hcdl/ Credited dunng th<? yt:, 11
Rel:llined E11rntngs: Slllance a, Pllir lut: balance sileet Add: Profit ftt the year
Gratuity [Def11u.'<1 bwii!lflt plan): T1w Group ha~" d11f!i,,,d l:!illnflflt gr~hJliy p1~n, lvttY ;,n,pln~ who has con,plsfr,I i:onunuoui: or rt·!Httn'lvn1 It 1$ dl,yi; !,;Jl.Hy [Jt)Nt drtiWFI r,,·11,11 y I 1111' IMlt::h corr·111k>tvd y,·,tr of St?:rvie,1. I 1lt' htffl'ti lns1,11 d!1t 1' Puhi::y,
B Chang;; In the 1)1"-nt VIiii!" of the defined bmutflt obil{lllli<lh:
Op~r,Jng (f1•l11Vxl l)1'i'fflflt obflQf1l1r)ll Intere,,t cost Current service am Benefits paid Actuariel lgr11n'.,I / !t)S$8$ on ol)l11,1atJun
Closing dcflru,t 1.,ntfit obllga1 '"', c Change In the fair value of ,,1an ,,-,m:
Opening fair value c,f plan ,,,;sets Expected retum on pl.111 assets Adjustment of Opqnln9 funrt Expenses deducwd from the fu11d Contributions !Jy ,,inp1oy11r Benefits paid Actuarial [losses] / IJ,1111,, Closing fair value of plan ,s,,,tll Total actuarial [lossc,;] / gainij to be
reoognbcd
D Actual return on pllll! llilMl:s:
e
F
G
Expected llet11rn on plan asset,; Actuarial [losses]/ gains on plan assets Actual return on plan 11ss,;ts
Amount recognised in the b~lance sheet, Liabilities / fAsse,I'.. J at the ~M
of the y,_-'dt
Fair value of plan ai;sets at tht end of the year
Liabilities/ [Assets) recogni!ll!d in the Ral,ince Sheet
El!pen ... ~ / [Tommes] recogni•ed in the Statement of Profit and Loss:
Current service cost Interest cost on benefit obligation Expected return on plan assets Net actuarial I gains! / losses In tile yea, Net expenses/ [benefits] Movement In net liabilities recognised
In llalanc:a Sheet: Opening nlll llitlllltlllo Expenses as above (P & L Charge] Contribution to Plan assets Amount recognised in OCI Benefits Paid Liabilities / [Assets] recognised In the
Balance Sheet
of Ave yu, ,, ,w 1M1 e gllltl a gr,tu,tv m dl!Uth or re,,.yrtut:io, 1 fw1d1-tl w!lh @rt IM$Uffllf"ii'(' I lllllp(lflY In th@ (Ol!r\ tJ! ,I Q!Jillifyin;
~ AIA!:J)!llu'!:hJ1
I)
0
0 0 0
33
0
33
0 2 7
:~G
7
0 0 0
33
~,,llll,/
1.avc.Wc1®ii
201 14
36
14'3 11 0
0 0 0
208
(155)
53
36
14 (11)
17
56
:;o 56 0 0
(61)
53
25() 19
.It> 0
(2) 46
(34)
(1 242
257
(2,fl)
1~
46 19
(16)
0 49
J4 49
(46)
(23)
15
296
Nm• 20 • Provitlons • u,nttnued: Ii Ptl~c:I I actuarlai ~iJ'J!'i~,;,~ fir Ml!fl ~:!,~~tj!I
Partlculars Discount rate [•] Annual lnCl'llllltl In
Deflc,1 / I !:.u• pt 111, I 11, tt~ pliiin Actu,,11c1I lu:,t; / ll,diO] 00 ~ltn Obllu,1t1ur< Actudrlal l.osli / [Glllol un 1•1,11, ·n,e l!Xil(!Cted c:ontl'lbutic\11;; tor i:ieflMd l!enfl1lt Plan tor tht 11~:"1 li!lll!'ldal ~r Will 1111 ir1 lin,1 Tl1c ~Vfflge duration or rJ<'llln@d benefit plan obllgat,or, 1,t ttie ,;,11d Ol't:hll yeerJs 23,98f c1,, ,rt March 31, 2017: 2.l.Jli y1,1m,J.
Sensitivity analysls1 A Qur1r1titc1tivc sr,1-;fl1v1ty analysis fo1 lilt;111tn(.-ui! ;i•,s.umption au 1s i1, •J11'>wn bi •t< 1w:
A Medical Leave:
Assumption Sensitivity Level Imoac:t on doafined benefit 0111t9atJ011 [!Nlt-1.akhs] Assumption Sensitivity Level rmoact on defined henetit tlbh~a!Joc rrNB:t:.;kli,,l
B Leave wa es:
Assumptlon SensitlVlty Level
on defined bt,nefit obliqdtl011 !NIH.akhs ptton
tivlty I.el/ill on defined bent!lit Obii · adOii [!Nl'l I ::ikhs1
Assumption Sensitivity Level Impact on defined benefit obli at,on lNR·Lakhs Assumption Sensitivity Level Im ct on defined benefit obli ation f!NR l.::ikhe,J
The followin payments are expected contributions to the defined benefit Ian in future years:
Within the next 12 months rne.'<t ~nnu&l l'IPQll;lng penodl Between 2 and 5 years 8etween 5 and 10 years Total expected ayments
'"'Note~--, 2""4-."'0th-.e_r_t1'"m_11_n_c.,.ia"'1"11"'"a""b"'ll1t1..,.·es-. -, _____ ,.,,----~-~-,~•·-'"' ___ .. ,.~--~---~·--"·" ----------~----·--•----·--·~----------,----::-.,-----~--,,-i Interest accrued but not due on IJo,ww,ngs Payable to empl0Ye<lS Unpaid dividends Total
Note: 25 • Other current liabllltles: Payable to statutory authorltles 1:ieterreci' revenue Advances from customers Others Total
Note: 26 • Provisions: Provision for employee benefits Provision for claims for product expiry and return , ,r goods [*] Total
r't'l PruviS:itJn fOI Ll<:li111~ fu1 pt-odut.t i!Xf)lfy dlld return of QtxJd~; a Provision for product expiry claims in no6P<'!ct of Product/! sold during the v,111r ,~
made based on the management's estimates considering the e,;tirnat<i!d stock iylnq with retailer.The Group does not l!Xpecl: such cldims to be relmhur,<~J bV any other party In future.
b The movement in such provision is star,1CI as uncle,, i Carrying amount at the beq« 11lin<1 of the Yi:lll ii Additional provision mad~ dunnq the ye.er iii Amount used Iv Carrying amount at the end of the year
ri rNet of advance ta,(1iavrnent t ,
A Contingent liabilities: a Claims against the Group not acknowledged as debts
In respect of guarantees given by Banks and / or counter guarantees given by ti1e company c Other money for which the Group Is contingently liable:
I In respect of sales Tax matters pending before appellate authorities Ii In respect of the demands raised by the Central Excise, State Excise & Service Tax Authority Ill Tn rps[)Pct of custom duty liablity under EPCG scheme
B Commitments: Estimated amount of contracts remaining to be executed on capital account and not provided for
Note: 29 • Dividends pro osed to be distributed:
1311
76 10 ;,L 7U
0 l!lt
Ft.J ◄,;l.
0
11!!
The 0oard of Directors, at lb <'<><Xlillg held u,, May 24, 20lS, reetnnmended me nnal dlVldend of INK 8 per equ,ty share ot INK 10/· each. The recommended dividend is subJect to the approval of the shareholders at the ensuing Annual General Meeting.
62 70
132
51 70 51 10
0 259
2,094 320
l!
423
298
011 wr np<'t c1tlng revenue'.,:
Total
N1·1· q1!1in on fort:1r111 ru11t•11cy transact1t'ir1•, ,111,1 tt1Jnsltl!t!on M1:.,o ·llane-ou$ lnnm1t' L n]
Not:Mto the
I•] The (';overnme11t of India hc1s 1ntrddueed tht Goods ,.>nd ~let ra, (Gi5f) with 1!ffciJ rrom July 01,2017 w111,h rtp/lC:U txd·Mi dutv and v¥ious other lnclire<..t tax<!ll, A$ per ln<l re, lG, Revenvt frvr11 om1retlonl for ttw, p,,,1,Jd from JUiy :'.-llJ.J t<:i Mardi 20W 11•po1ted net of CST. !?cvenue frorn n111'1:1t10n, of p@Jit,Jcl•, 11fJh, iune lOt 2fl 11 -111: 1 qport:@d lne111·.1v1• iioo;IM duty wti1111 1··• now t.o!t;11med in G!,!,
[*" I Mi·;r:ellaneous inrnnH' includes, Govc1111111.'111 gra:nbi who.,,f• p1H'i1~ry eondttlnn 1·. 1.11.11 this Comp.111y '-,h(.i11ld purehttt1•, 1 (111<.ttllet' or otherwise acq11ira non-current as'.,<.'1:11 are reoognm:,I imd dledoatd "" Ocl'11Nd Grant no11'1:Umlnt llib!l>ly in Ult! balance t,11!!$t and trnnsferrl!d IXl the St&~menl or profit and lo,,:; un IVffl!ITTllttt ,1nd r~i<tll'IIII balllt OVi,r Llio u;jlijfyl llllfl 01 tl'lil Hel,ffl illNtl.
N11te1 31 - Other im:ome, t11t1,1(",t' 1m--ome on -nn~1ncial ds::,ets measun'.~d dt dmortlsed cot,t
Gain on 111111, of investments Net gain on Investments measured at FVl'PL Tot.al
Notll: 33 • Purchases of stock•ln•trade: Purcl1ases of stock .. ln .. trade Total
Note: 34 • Chan es in Inventories: Stock at commencement:
Work-in-progress Finished goods Stock-In-trade
Less: Stock at close: Work-in-progress Finished goods Stock-in-trade
Differential excise duty/ gst on opening and closing stock of finished goods Tot.al
Nllte: 35 - Excise du Excise duty(*] Total [*] 'Excise duty expense of the April 2017 to June 2017 quarter include credit of excise duty of !NR 1799 Lakhs received by Zydus
Wellness- Sikkim, the partnership firm, pursuant to the order passed by the Office of the Commisstoner of Customs, Central Excise and Service Tax on the fixation of special rate of excise duty under Notification no 20/2007·CE dated April 25,2007 amended by Notifir;,tion Nn 70/2008-CI: dat•'d Mar,;h 27 ,200e & Notification No,38n0os - <:E dattld June 10.2008,
Salaries and wages Contribution to provident and other funds Staff welfare expenses Who!etime director remuneration Total
SI
45 1,278
35 1,358
33 1,871
16 1926 (568) 176 392
4,222
189 135 232
4778
299
ninkcommis!ilon t1, (J1,_11u1"
llltlll l*) The bre~k 111 111r 111h'11",I ~-xp12nse:ii into 1rt1Jf11 11, .1, 1- .. 11<1 9ivt1fl be-low:
On worklf'ltJ tr!flll,11 111,111·,
Otht'F;
lntnl
,,mortb;at,on r'Ol:al
~·Jwf:! HlfUt!I
LihboUr tllar (Jt:':.1
Rent ['l Rer"""' to bl.lildings rzepalrs to plt111t n11d 111;-1(1111u·ry
Hll!Pilitli to otheri. 1,1sura11ce !~and taxes O.,mmlsslori to diroK.iln Traveling expen'IU Legal and profe:JIIIOMI fees Commission on !llllllS l'relg11t and forwarding o~ sales Advertisement an{ 1 '.;i.lli-•:, µr(mH.Jtions Representative alltJWrl!lC13!'>
c)ther marketing cxii(~n'.,c",
Provsion ror doubtful dell!·. Oir&tors' f~s
Net Loss on diSPoSIII of fixed asscts Donations Miscellaneous expenSllS [ .. ] Total
[*] The Group h;.t; taken various residential/ offo,:e p1e1ni2,es/ godowns under oper&niu lease or leave tH1d
agreement wiU1 no 1·e~-_;t11ct!ons and are 11:nt~w1:1ble/ c:,1ncellable at the opt1rn1 nt e1the1· of the parties, r 11c1 e c1rc no sub~lea~,f~'.,. 1'11e lea:.,c payments recoun1sed u1ider "Rent Expenses'' .1tc:
[**l Mlscellaneou, expenses include: a Expenditure on Corporate ::;ociul ReSJ)OnSlblllty [CSR] Activiti~,, as reqult«I u/s US of the ComP11nl1111 Act,
701],
h IJayment to the Statutory Auditor,; [excluding Service T,,,1. I As Auditor
ror Other servtces rotal
ii Cost Auditor':; Remuner(;ltfon i11Cl11d1r1g fees For other service:t;
Note: 40 • COmponents of Other Comprehensive Income oa]: Re-measurement Qijins [losses] on defined benefit plans[Net ofTaxJ Total
Note: 41 - Calculation of Eaml s per e uity share EPS : The numerators anrl rlennmlnators used to calnilnte the bnsic and drlumd EPS ar,, as r011ows:
A Profit attributable to Shareholders B Basic tuu.J weiqlilt~d dveraqe number of Equity Shares OYtStar1dln9 (Ju1111!,J th~ wdr C Nominal value of equity share D Basic & Diluted EPS
Note: 42 - Segment Information:
INR· In Lakhs N11rnllllr,;
INR lNR
The Chief Operating Decision Maker [CODM] reviews the Group as a single "Consumer" segment. The Group operates In one segment only, namely "Consumer Products." The Group also exports its products to other countries. However the value being below threshold limit "segment Reporting", the reporting is not required.
A NM1c of the Related P1>,o,11; ilti\l r,u,ture of tile Rlll1<t~<1 r.i,ty i,,elat101111hlp1 it Holding company, 111',llth.:llrl Limltad b Part!larship Firm, M/r,, /y<iU'", W~llna. Sikkim ' Flllll>W llllhllldl•l'loll!I/ Concerns;
/yd1b Nuv\11!, ·1:h Inc,( UM V1r1II!) l l11iJltl11 ,lr@ Liml~ J\i 1111: JJI 1,)1111,1i-futlc1li Privet~ UniJl1 ,i1
11 Transactions with Related Parties: The following transactions were Qljf"ried 011t with the n~lated parties 111 the oi n1nd1v crnJrse of business: a Detail,, relating to parties referred to 111 Note ·13 A [a, b & cJ
Fmanclal assets and financial llabllitles 11:1e£isi ,red ,;t fJir value in tt,,, si,1!\:111ent of financial positlcn are Ql'OIJl:led 1,,to th1c,;, Levels of a fcl11 vali ,e hlnrchy, The thrllle Levels era delined based on the observability of stgnlftcimt input,, 10 1110 me<1~ure111!Jl1t, ,,., follows: Level 1: Quoted prices (unadjusl:!!d) In ecuvc 111;11i«.<ts for financi~I 111,;11 urnents. Level 2 : The fair value of financial lnstru,nenm th,,t /\re not traded 111 M ad:M! market Is del:l!rmlrllld u!llng valuat11111 1c,J1<i1t1U!l$ wl1ich 111n,11nlse the Uilll! of obilll!rvable market datd rely as little as possible on entity specific es1.1111at,x,.
Level 3: If one or more of the Significant. inputs 1@ no, lms,,cl on 011s~1vable market data, the Instrument Is lne1ur1,1,1 in level (ii) Financial ali&lll:s and llabllltf m-ur~ at filir value rocurrin fair valua malliuN1111111ts1
Plnancial assets Xnvestments at FVTPL
Mutual funcb total financial assets Financial Liabilities
Financial assets Investments at FVTPL
Mutual funds Total fln11ncl11I assets Financial Liabilities
Levell
l47$5 l471JS
0
t.evel 1
3,001 3,001
0
XNR•Lllkhs AM at March u, 20:1.1 .._.2 IAWIJ
0 0 0 0 ll 0
INR-Lakhs As at March 31, 2017
Level 2 Level 3
0 0 0 0 0 0
Total
3,001 3,001
0
302
/y,,~;Wl)lln• Ll»~1,,,,
N , 45 • Financial Instruments • Continued: .!'!~•t4 b) Jim (·011-it0Ud~!m.1,1I St4,•i11u,~'"'""'",,,"-",,..,-,.w., . .,....~------------------•----,
(Ill) Fair value of instruments measured at amortised ClO!ll:1 Plrnmdal assets ~nd liabllltles measured at arnortlsed COit fu1w1•1ill11,,11 v,i1t1t11 are dlseloHd. Financial Assets1
!he hl$l0ry of lr,111,• r,11rjv,1b1,,, snow, ~II ~11ow,,11u>l11t [,,,,, .,fld dtlul:ltf\JI dri;I,1,. «I lfjll Ml 10,57 Lllkhi ~Ut M,11<11 JI, .'11\7], th!!! Group rm,,'"·""' ,1li1,W~l1Q!! of lNR N,1 IA•; Jt M,11111 ll, 2017· INR NII I, ,\IJ,11nst 11,11!,1 t'ffl:liilVablll!I ,;,f IN!< I'/', I ,c,l;,h~ tAll at March }III/ /Nii ,!04 Uikh$J,
B Liquidity l'itk: . , 8 Prudent ltQUidtty rl@k man1111em@11t onpltr::, (fl~lntllinlng IIUfi'l(h'ltl( ,1111.l mal'ketilble H(;1Jt1l:h,, 1,11,; the IIVllllblllty of f11mli111} Ull'Ollgh an !ldl!QUl!tt Wll!J!Jlil 111 r:,,mmlttl!ICI CNC!it
fllclltties to rnC<1t obllgiltlOnG whtn ,ti,.,, D!Jl'.11,, the natufill of the 111,wntl!;s, tha Group melntain~ llex,llillt:y m funding by m11!1t1m11n9 ,1vail,1ll11ity under comn111ti!d fNil1t11·1,
b M;;nagement monlfflt'!! mllin~ i'fir(,l(;q:,l,i; uf Lile l',rour,'• ll~11lt'llty po~1t1on ~od rA•h Anl'I r~"11 market h1 which th:· c11t11 v ll/ u ·1 ~. In addition, ttit._, (;1 nup'", liqUldlty rrtl'ili~( •1111 ·11t poUi y necessary to mett tlli?,£t\ IJH)l ll(!)fl!ig OOl1nc11: lfll'('1 luplidity 1,'1tlOS a;alrttt lntt•1 f1dl ,J!l(I vXtt''.I !'Utt!
Maturities of financi.il liabilities I
011 i~ hl,~I, rif lllxjJl;lLtll:d Cil:ih 111'.lW•, 'fhp (,n,11p "'"ount the lillulrilty of tM ( 11\,ll flnw:~ ff\ majOr currtf)f:tt•', ,1/\(I I ()rl'-A1lfflt'irlQ th@ level nl l1qwd d',',1'h
Tile tables below aMlyse the Grn1,p'i flnnncf;,I li1bll1t111111n1X1 l!eli'!vant maturity groupings l)J;scrl on tl;elr contractulil mllt!Jritic,:, for oil 11(:l!'Hlllll'!Vattve !lnand;il li,ibilitres, lhe amounts dh,closed in the table are the c:ot1trnctual ,1111ti,,,xi1.mted i:a!lh flow,,. n.,1,1t1oos due Wlthln12 mc,11111~ ,,111~1 tht:lr (;llrrylng balllnoos ~,, u,,, 11nf)llct of dlscountlnn ,:, not s19nItlc:ant.
Non-derivative-, / Financial L111bilitllls Borrowil:,gt; 1.1nc!u(lt11t1111turtmt] Trade payable Security deposit Payable to Employee Unpaid dividend Total
Non-derivatives Borrowing!> ! 111dudtny ir1t1::~rest:] Trade payable Security deposit Payable to employee Unpaid dividend Total
1
2/JOB
b,650 0
46$
78
1""!Yt'!31'$
------, .. Asai!::'fd~h 311 20111
Q
0 0
0 0 0
0 0 0
0
0
0
As at March 31
0
0
0 0
304
C florelgn currency rllk The Group 1s exposed bl foreign exchange risk 1r1a1ng from foreign currencv tranllld:IOnl, pnmarnv with reipiict to the us Doller,euro and GBP. Foreign exchange risk art• from recognised assets and ll1bllltl1S denominated In I curn11ncy that 11 net the Group'• functional currency.The C1roup'1 operations In foreign eurrency Is lnllgnlftesnt and hence there Is no mato,1al risk.
I florelgll Cllll'l'ellCIV rllk 11(11111111'11 The Groups exposure to foreign Cilrnllncy risk at the end of the reporiing periOd ~ iii l'cllowl:
llnlllvity '• ' The Nl(iltlVlty of proftt or Ian and IQUltV bl ehllngei In the illCChlnge rltlll arlNC 1111lrily from foreign curn11ncy denomlnllllld financial Instruments,
Ptlltkulllrs
USO USD l!UR
.,fa;,,:~, others
b hlelreltratarlllu .
4.00% -4,00% 7.00%
•7,00% 5.00%
•5,00%
4 (4) 0 0 0 0
-- 1; I
The Group's Mxed depoilts are ea,tld' ~ dllfOl\iNCl d •nd ft IIXld tate;l ... : ~ ere thareforl net ■ubjed: to lntnlt in risk as dlftned In Ind AS 107, since nalther the earrylng amount nor the future cut,'llows w11t11uctual:li,bau. of a change tri market ,,__ r1t11. .
• c PrlceRl1k . ,., r• f (I) Exposure
~ ~ held by the group and daSSlftlld IA b balance sheet as fair value through OCI and at:felr..value - II\V\lllffl-,.1111 equity secul'ltlell and muut flind, theQl'OUP diversifies Its portfolio. DMlralt'lr.ellon of the
The Grou~s eig)O&Yre to price rtlk artllllil .flilflt Jrweatm ~ profit or loss resp&tlvely,to ma~'I\I' priea, ~IR,. don, IQ ~~.c:e with thl llmlt'II MIW the ffolip, w.~.~••~.m The table below summarlHS the lmpaet of lnereaHS/deereaHS of the Index on the Group's equity and profit for the pertod, The analysis Is based on the assumption that the price of the Instrument has inereased 2% or deereaNd 2% With all other vertabla held conlltant, Pllrtlculars
Mutual Funds [Quoted] lnerease2% Decrease2% [*] Holding all other variables constant.
2 Qlpltlll managementl The Group' s eepltal management objaetlves are • to ensure the Group's ability ta c:ontlnue as a going concern • bl provide an adequate retum ta shareholders • maintain an optimal eepltal structure ta reduce the eost of eepltal. Management assesses the Group's eepltal requirements In order bl maintain an efficient overall ftnanclng structure while avoiding excessive leverage. This takes Into aceount the subordination levels of the Group's venous classes of debt. The Group manages the eapltal strueture and makes ~Justments to It In the light of changes In economic eondltlons and the risk characteristics of the underlying assats. The Group hes sufficient cash and Cash Equivalents and Short term l'lxed Deposit available against the debt and not exposed ta any long term debts.
Loan-nts The Grou has taken loan for workln c:a tlll utrement and as at 31 Mareh 201 the ratio of net ftn■Ace eost ta l!ili!TDA w111.06% 31 March 2017 0,42% ,
305
..
•
Notll 46 • Grou Information 1 Consolldllted l'tnandal Statements as It March 31 2018 com
Notll 47
Al RIC 9Yt ceow:t gf IYID dftl l'or Dhlrubhal Shah & Co Chartered Accountants Pim, Reglstra~on Number: 102511 w
~
Harlsh B. Patel ,Partner Membership Number: 01'1427 Ahmedabad, Dated: May 24, 2018
f~
Dhaval N. SOnl Company secretary
l}'j¥ 1Qd An bplf of !bl aparq
~ Dr, ShaNII P, Pafflll Chairman
~~ Arora
nme011'11C101'
306
307
DECLARATION
The Company certifies that all relevant provisions of Chapter VI read with Schedule VII of the SEBI ICDR
Regulations have been complied with and no statement made in this Preliminary Placement Document is contrary
to the provisions of Chapter VI and Schedule VII of the SEBI ICDR Regulations and that all material approvals and
permissions required to carry on the Company’s business have been obtained, are currently valid and have been
complied with. The Company further certifies that all the statements in this Preliminary Placement Document are
true and correct.
Signed by:
_______________
TARUN ARORA
Whole-time Director and CEO
Date: September 23, 2020
Place: Ahmedabad
308
DECLARATION
We, the Board of Directors of the Company certify that:
(i) the Company has complied with the provisions of the Companies Act, 2013 and the rules made thereunder;
(ii) the compliance with the Companies Act, 2013 and the rules thereunder, does not imply that payment of
dividend or interest or repayment of preference shares or debentures, if applicable, is guaranteed by the
Central Government; and
(iii) the monies received under the Issue shall be used only for the purposes and objects indicated in the
Preliminary Placement Document.
SIGNED ON BEHALF OF THE BOARD OF DIRECTORS
Signed by:
___________
TARUN ARORA
Whole-time Director and CEO
Date: September 23, 2020
Place: Ahmedabad
I am authorized by the Finance and Administration Committee of the Board of Directors of the Company, vide
resolution dated August 27, 2020, to sign this form and declare that all the requirements of Companies Act, 2013
and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been
complied with. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no
information material to the subject matter of this form has been suppressed or concealed and is as per the original
records maintained by the promoters subscribing to the Memorandum of Association and the Articles of
Association.
It is further declared and verified that all the required attachments have been completely, correctly and legibly
attached to this form.
Signed by:
______________
TARUN ARORA
Whole-time Director and CEO
Date: September 23, 2020
Place: Ahmedabad
309
ZYDUS WELLNESS LIMITED
Registered Office
Zydus Corporate Park, Scheme no. 63
Survey no. 536, Khoraj (Gandhinagar)
Near Vaishnodevi Circle, S.G. Highway
Ahmedabad - 382 481
Website: www.zyduswellness.in
CIN: L15201GJ1994PLC023490
Company Secretary and Compliance Officer: Dhanraj Dagar
QUALIFIED INSTITUTIONS PLACEMENT OF [●] EQUITY SHARES OF FACE VALUE `10 EACH (THE “EQUITY SHARES”) FOR CASH AT
A PRICE OF `[●] PER EQUITY SHARE (“ISSUE PRICE”) INCLUDING A PREMIUM OF `[●] PER EQUITY SHARE AGGREGATING TO
APPROXIMATELY `[●] LAKHS UNDER CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, AS AMENDED (THE “SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE
COMPANIES ACT, 2013, AS AMENDED (THE “COMPANIES ACT”), READ WITH RULE 14 OF THE COMPANIES (PROSPECTUS AND
ALLOTMENT OF SECURITIES) RULES, 2014, AS AMENDED (THE “PAS RULES”), AND OTHER APPLICABLE PROVISIONS OF THE
COMPANIES ACT AND THE RULES MADE THEREUNDER BY ZYDUS WELLNESS LIMITED (THE “COMPANY”) (HEREINAFTER
REFERRED TO AS THE “ISSUE”). THE APPLICABLE FLOOR PRICE OF THE EQUITY SHARES IS `1,775.85 AND OUR COMPANY MAY
OFFER A DISCOUNT OF UP TO 5% ON THE FLOOR PRICE, AS APPROVED BY THE SHAREHOLDERS.
Only Qualified Institutional Buyers (“QIBs”) as defined under Regulation 2(1)(ss) of the SEBI ICDR Regulations and which (i) are not, (a) excluded
pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations; (b) restricted from participating in the Issue under the SEBI ICDR Regulations and
other applicable laws; (c) hold a valid and existing registration under the applicable laws in India (as applicable); and (d) are eligible to invest in the
Issue and submit this Application Form, and (ii) are residents in India or Eligible FPIs (as defined hereinbelow) participating through Schedule II of
the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (“FEMA Rules”), defined hereinafter or a multilateral or bilateral
development financial institution eligible to invest in India under applicable law including the FEMA Rules; can submit this Application Form. The
Equity Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (“Securities Act”) or any other
applicable law of the United States, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws. You should note and observe the solicitation
and distribution restrictions contained in the sections titled “Selling Restrictions” in the accompanying preliminary placement document dated
September 23, 2020 (the “PPD”).
ELIGIBLE FPIS ARE PERMITTED TO PARTICIPATE IN THIS ISSUE, THROUGH SCHEDULE II OF THE FEMA RULES, SUBJECT TO
COMPLIANCE WITH ALL APPLICABLE LAWS AND SUCH THAT THE SHAREHOLDING OF ELIGIBLE FPIS DO NOT EXCEED
SPECIFIED LIMITS AS PRESCRIBED UNDER APPLICABLE LAWS IN THIS REGARD. PURSUANT TO PRESS NOTE NO. 3 (2020 SERIES),
DATED APRIL 17, 2020, ISSUED BY THE DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE, GOVERNMENT OF
INDIA, AND RULE 6 OF THE FEMA RULES, INVESTMENTS BY AN ENTITY OF A COUNTRY WHICH SHARES LAND BORDER WITH
INDIA OR WHERE THE BENEFICIAL OWNER OF SUCH INVESTMENT IS SITUATED IN OR IS A CITIZEN OF SUCH COUNTRY, MAY
ONLY BE MADE THROUGH THE GOVERNMENT APPROVAL ROUTE. ALLOTMENTS MADE TO AIFS AND VCFs IN THE ISSUE SHALL
REMAIN SUBJECT TO THE RULES AND REGULATIONS APPLICABLE TO EACH OF THEM RESPECTIVELY, INCLUDING THE FEMA
RULES. OTHER ELIGIBLE NON-RESIDENT QIBS SHALL PARTICIPATE IN THE ISSUE UNDER SCHEDULE I OF FEMA RULES. FVCIs
Zydus Corporate Park, Scheme No. 63, Survey No. 536,
Khoraj (Gandhinagar), Nr. Vaishnodevi Circle,
Sarkhej–Gandhinagar Highway,
Ahmedabad – 382 481, Gujarat, India
Dear Sirs,
On the basis of the serially numbered PPD of the Company and subject to the
terms and conditions contained therein, and in this Application Form, we hereby
submit our Application Form for the Allotment of the Equity Shares in the Issue, at the terms and price indicated below. We confirm that we are an Eligible
QIB in terms of Regulation 2(1)(ss) of the SEBI ICDR Regulations and are not: (a) excluded pursuant to Regulation 179(2)(b) of the SEBI ICDR Regulations;
and (b) restricted from participating in the Issue under the applicable laws, including SEBI ICDR Regulations. We are not a promoter of the Company (as
defined in the SEBI ICDR Regulations), or any person related to the promoters of the Company, directly or indirectly. Further, we confirm that we do not have
any right under a shareholders’ agreement or voting agreement entered into with promoters or persons related to promoters of the Company, veto rights or right
to appoint any nominee director on the board of directors of the Company. We confirm that we are either a QIB which is resident in India, or an Eligible FPI,
participating through Schedule II of the FEMA Rules. We specifically confirm that our Bid for the Allotment of the Equity Shares is not in violation to the
amendment made to Rule 6(a) of the FEMA Rules by the Central Government on April 22, 2020. We confirm that we are not an FVCI. We confirm that the Bid
size / aggregate number of the Equity Shares applied for by us, and which may be Allocated to us thereon will not exceed the relevant regulatory or approved
limits and further confirm that our Bid will not result in triggering an open offer under the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011, as amended (the “Takeover Regulations”).
We confirm, that we have a valid and existing registration under applicable laws and regulations of India, and undertake to acquire, hold, manage or dispose of
any Equity Shares that are Allotted to us in accordance with Chapter VI of the SEBI ICDR Regulations and undertake to comply with the SEBI ICDR
Regulations, and all other applicable laws, including any reporting obligations. We confirm that, in relation to our application, each foreign portfolio investor
(“FPI”) as defined under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, as amended (other than individuals,
corporate bodies and family offices), and including persons who have been registered under these regulations (such FPIs, “Eligible FPIs”), have submitted a
separate Application Form, and asset management companies of mutual funds have specified the details of each scheme for which the application is being made
along with the Bid Amount and number of shares to be Allotted under each scheme. We undertake that we will sign all such documents, provide such documents
and do all such acts, if any, necessary on our part to enable us to be registered as the holder(s) of the Equity Shares that may be Allotted to us. We confirm that
the signatory is authorized to apply on behalf of the Bidder and the Bidder has all the relevant authorisations. We note that the Company is entitled, in consultation
with J.P. Morgan India Private Limited (the “BRLM”), in their sole discretion, to accept or reject this Application Form without assigning any reason thereof.
We hereby agree to accept the Equity Shares applied for, or such lesser number of Equity Shares as may be Allocated to us, subject to the provisions of the
memorandum of association and articles of association of the Company, applicable laws and regulations, the terms of the PPD, Placement Document and the
CAN, when issued and the terms, conditions and agreements mentioned therein and request you to credit the same to our beneficiary account with the Depository
Participant as per the details given below, subject to receipt of Application Form and the Bid Amount towards the Equity Shares that may be allocated to us.
The amount payable by us as Bid Amount for the Equity Shares applied for has been/will be remitted to the designated bank account set out in this Application
Form through electronic mode, along with this Application Form prior to the Bid/Issue Closing Date and such Bid Amount has been /will be transferred from a
bank account maintained in our name. We acknowledge and agree that we shall not make any payment in cash or cheque. We are aware that (i) Allocation and
Allotment in the Issue shall be at the sole discretion of the Company, in consultation with the BRLM; and (ii) in the event that Equity Shares that we have
applied for are not Allotted to us in full or at all, and/or the Bid Amount is in excess of the amount equivalent to the product of the Equity Shares that will be
Allocated to us and the Issue Price, or the Company is unable to issue and Allot the Equity Shares offered in the Issue or if there is a cancellation of the Issue, or the listing of the Equity Shares does not occur in the manner described in the PPD, the Placement Document, the SEBI ICDR Regulations and other applicable
laws, the Bid Amount or a portion thereof, as applicable, will be refunded to the same bank account from which the Bid Amount was paid by us. Further, we
agree to comply with the rules and regulations that are applicable to us, including in relation to the lock-in and transferability requirements. In this regard, we
authorize the Company to issue instructions to the depositories for such lock-in and transferability requirements, as may be applicable to us.
We acknowledge and agree that (i) our names, address, contact details, PAN, bank account details and the number of Equity Shares Allotted, along with other
relevant information as may be required, will be recorded by the Company in the format prescribed in terms of the PAS Rules; (ii) in the event that any Equity
Shares are Allocated to us in the Issue, we are aware pursuant to the requirements under Form PAS-4 of the PAS Rules that our names (as proposed Allottees)
and the percentage of our post-Issue shareholding in the Company will be disclosed in the Placement Document, and we are further aware that disclosure of
such details in relation to us in the Placement Document will not guarantee Allotment to us, as Allotment in the Issue shall continue to be at the sole discretion
of the Company, in consultation with the BRLM; and; and (iii) in the event that Equity Shares are Allotted to us in the Issue, the Company will place our name
in the register of members of the Company as a holder of such Equity Shares that may be Allotted to us and in the Form PAS-3 filed by the Company with the
Registrar of Companies, Gujarat at Ahmedabad (the “RoC”) as required in terms of the PAS Rules. Further, we are aware and agree that if we, together with
any other QIBs belonging to the same group or under common control, are Allotted more than 5% of the Equity Shares in the Issue, the Company shall be
required to disclose our name, along with the names of such other Allottees and the number of Equity Shares Allotted to us and to such other Allottees, on the
websites of the National Stock Exchange of India Limited and BSE Limited (together, the “Stock Exchanges”), and we consent to such disclosures. In addition,
we confirm that we are eligible to invest in Equity Shares under the SEBI ICDR Regulations, circulars issued by the RBI and other applicable laws.
By signing and submitting this Application Form, we hereby confirm and agree that the representations, warranties, acknowledgements and agreements as
provided in the sections “Notice to Investors”, “Representations by Investors”, “Issue Procedure” and “Selling Restrictions” sections of the PPD and the terms,
conditions and agreements mentioned herein are true and correct and acknowledge and agree that these representations and warranties are given by us for the
benefit of the Company and the BRLM, each of whom is entitled to rely on, and is relying on, these representations and warranties in consummating the Issue.
By signing and submitting this Application Form, we hereby represent, warrant, acknowledge and agree as follows: (1) we have been provided with a serially
numbered copy of the PPD along with the Application Form, have read it in its entirety including in particular, the section “Risk Factors” therein and we have
relied only on the information contained in the PPD and not on any other information obtained by us either from the Company, the BRLM or from any other
source, including publicly available information; (2) we will abide by the PPD and the Placement Document, this Application Form, the confirmation of
allocation note (“CAN”), when issued, and the terms, conditions and agreements contained therein; (3) that if Equity Shares are Allotted to us pursuant to the
Issue, we shall not sell such Equity Shares otherwise than on the floor of a recognised stock exchange in India for a period of one year from the date of Allotment;
Banking Financial
Companies
IC Insurance
Companies OTH
Others
__________________
(Please specify)
Total shares currently held by QIB or QIBs belonging to the same group or those who
are under common control. For details of what constitutes “same group” or “common
control”, see “Application Form” under Issue Procedure section of the PPD.
*Foreign portfolio investors as defined under the Securities and Exchange Board of
India (Foreign Portfolio Investors) Regulations, 2019, as amended, other than
individuals, corporate bodies and family offices who are not allowed to participate in
the Issue
312
(4) we will not have the right to withdraw our Bid or revise our Bid downwards after the Bid/Issue Closing Date; (5) we will not trade in the Equity Shares
credited to our beneficiary account maintained with the Depository Participant until such time that the final listing and trading approvals for the Equity Shares
are issued by the Stock Exchanges; (6) Equity Shares shall be Allocated and Allotted at the discretion of the Company, in consultation with the BRLM, and the
submission of this Application Form and payment of the corresponding Bid Amount by us does not guarantee any Allocation or Allotment of Equity Shares to
us in full or in part; (7) in terms of the requirements of the Companies Act, upon Allocation, the Company will be required to disclose names and percentage of
our post-Issue shareholding of the proposed Allottees in the Placement Document; however, disclosure of such details in relation to us in the Placement
Document will not guarantee Allotment to us, as Allotment in the Issue shall continue to be at the sole discretion of the Company, in consultation with the
BRLM; (8) the number of Equity Shares Allotted to us pursuant to the Issue, together with other Allottees that belong to the same group or are under common
control as us, shall not exceed 50% of the Issue and we shall provide all necessary information in this regard to the Company and the BRLM. For the purposes
of this representation: The expression ‘belong to the same group’ shall derive meaning from Regulation 180(2) of the SEBI ICDR Regulations, i.e., entities
where (i) any of them controls, directly or indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the other; (ii) any of
them, directly or indirectly, by itself, or in combination with other persons, exercise control over the others; or (iii) there is a common director, excluding
nominee and independent directors, among the Eligible QIBs, its subsidiary or holding company and any other QIB; and ‘control’ shall have the same meaning
as is assigned to it under Regulation 2(1)(e) of the Takeover Regulations; (9) We agree to accept the Equity Shares applied for, or such lesser number of Equity
Shares as may be Allocated to us, subject to the provisions of the memorandum of association and articles of association of the Company, applicable laws and
regulations, the terms of the PPD and the Placement Document, this Application Form, the CAN upon its issuance and the terms, conditions and agreements
mentioned therein and request you to credit the same to our beneficiary account with the Depository Participant as per the details given below.
By signing and submitting this Application Form, we hereby represent, warrant, acknowledge and agree that we are located outside the United States and are
acquiring the Equity Shares in an “offshore transaction” as defined in, and pursuant to, Regulation S under the Securities Act.
By signing and submitting this Application Form, we further represent, warrant and agree that we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of the prospective investment in the Equity Shares and we understand the risks involved in making
an investment in the Equity Shares. No action has been taken by us or any of our affiliates or representatives to permit a public offering of the Equity Shares in
any jurisdiction. We satisfy any and all relevant suitability standards for investors in Equity Shares, have the ability to bear the economic risk of our investment
in the Equity Shares, have adequate means of providing for our current and contingent needs, have no need for liquidity with respect to our investment in Equity
Shares and are able to sustain a complete loss of our investment in the Equity Shares. We acknowledge that once a duly filled Application Form is submitted by
an Eligible QIB, whether signed or not, and the Bid Amount has been transferred to the Escrow Account (as detailed below), such Application Form constitutes
an irrevocable offer and cannot be withdrawn or revised downwards after the Bid/Issue Closing Date. In case Bids are being made on behalf of the Eligible QIB
and this Application Form is unsigned, we confirm that we are authorized to submit this Application Form and provide necessary instructions for transfer of the
Bid Amount to the Escrow Account, on behalf of the Eligible QIB.
ESCROW ACCOUNT - BANK ACCOUNT DETAILS FOR PAYMENT OF AMOUNT THROUGH ELECTRONIC FUND TRANSFER
REMITTANCE BY WAY OF ELECTONIC FUND TRANSFER BY [●] [P.M.] (IST), [●], [●], 2020
Name of the Account Zydus Wellness Limited – Escrow Account – Equity Share Issue FY 2020-21
Name of the Bank ICICI Bank Limited Address of the Branch of the Bank ICICI Bank Limited, Capital Market Division, 122/1 Mistry Bhavan, Backbay Reclamation, Churchgate,
Mumbai - 400020
Account Type Escrow account Account Number 000405124085 IFSC ICIC0000004
The Bid Amount should be transferred pursuant to the Application Form. All payments must be made only by way of electronic funds transfer, in favour of
“[●]”. Payment of the entire Bid Amount should be made along with the Application Form on or before the closure of the Bid/Issue Period, i.e., prior to the
Bid/Issue Closing Date. The payment for subscription to the Equity Shares Allotted in the Issue shall be made only from the bank account of the
person subscribing to the Equity Shares and in case of joint holders, from the bank account of the person whose name appears first in the Application
Form.
BIDDER DETAILS (in Block Letters)
NAME OF
BIDDER*
NATIONALITY
REGISTERED
ADDRESS
CITY AND
CODE
COUNTRY
TELEPHONE
NO.
EMAIL
FOR FPIs Registration Number: For AIFs/MFs/VCFs/SI-
NBFCs/ICs/IFs Registration Number:
313
*Name should exactly match with the name in which the beneficiary account is held. Any discrepancy in the name as mentioned in this
Application Form with the depository records would render the Application invalid and liable to be rejected at the sole discretion of the Company
and the BRLM. Bid Amount payable on Equity Shares applied for by joint holders shall be paid from the bank account of the person whose
name appears first in the application. Mutual Fund bidders are requested to provide details of the bids made by each scheme of the Mutual Fund.
Each Eligible FPI is required to fill a separate Application Form.
In case you are an FPI holding a valid certificate of registration and eligible to invest in the Issue, please mention your SEBI FPI Registration
Number.
Allotments made to AIFs and VCFs in the Issue are subject to the rules and regulations that are applicable to each of them respectively, including
in relation to lock-in requirement. AIFs and VCFs should independently consult their own counsel and advisors as to investment in and related
matters concerning the Issue.
We are aware that the number of Equity Shares in the Company held by us, together with the number of Equity Shares, if any, Allocated to us in
the Issue will be aggregated to disclose the percentage of our post-Issue shareholding in the Company in the Placement Document in line with the
requirements under Form PAS-4 of the PAS Rules. For such information, the BRLM will rely on the information provided by the Registrar for
obtaining details of our shareholding and we consent and authorize such disclosure in the Placement Document.
DEPOSITORY ACCOUNT DETAILS
Depository Name(Please ✓) National Security Depository
Limited Central Depository Services (India) Limited
Depository Participant Name
DP – ID I N
Beneficiary Account Number (16 digit beneficiary account. No. to be mentioned above)
The Demographic details like address, bank account details etc., will be obtained from the Depositories as per the beneficiary account given
above. However, for the purpose of refund, if any, only the bank details as mentioned below, from which remittance towards subscription
has been made, will be considered.
The Bidders are responsible for the accuracy of the bank account details mentioned below and acknowledge that the successful processing of refunds
if, any, shall be dependent on the accuracy of the bank account details provided by them. The Company and the BRLM shall not be liable in any
manner for refunds that are not processed due to incorrect bank account details.
RUPEE BANK ACCOUNT DETAILS (FOR REMITTANCE)
Bank Account
Number IFSC Code
Bank Name
Bank Branch
Address
NO. OF EQUITY SHARES BID BID AMOUNT PER EQUITY SHARE (RUPEES)
(In figures) (In words) (In figures) (In words)
DETAILS OF CONTACT PERSON
NAME
ADDRESS
TEL. NO.
EMAIL
OTHER DETAILS ENCLOSURES ATTACHED
PAN** Attested/ certified true copy of the following:
Copy of PAN Card or PAN allotment letter
Copy of FPI Registration Certificate /MF
Registration certificate /SEBI certificate of
registration for AIFs/VCF/SI-NBFC/IC/IF
Copy of notification as a public financial institution
FIRC
Copy of IRDAI registration certificate
Intimation of being part of the same group
Certified true copy of Power of Attorney
Other, please specify
Date of Application
Signature of Authorised Signatory
(may be signed either physically or
digitally)
*The application form is liable to be rejected if any information provided is incomplete or inadequate at the discretion of the Company in consultation with
the BRLM.
314
**It is to be specifically noted that the Bidder should not submit the GIR Number or any other identification number instead of the PAN as the applications
are liable to be rejected on this ground, unless the Bidder is exempted from the requirement of obtaining a PAN number under the Income-tax Act, 1961.
Note: Capitalized terms used but not defined herein shall have the same meaning as ascribed to them in the PPD, unless specifically defined herein.
This Application Form, the PPD and the Placement Document sent to you/ be sent to you, either in physical form or both, are specific to you and you may not
distribute or forward the same and are subject to disclaimer and restrictions contained in or accompanying these documents.
(Note: The format of the Application Form included herein above is indicative and for the illustrative purposes
only and no Bids in this Issue can be made through the sample Application Form. Our Company, in
consultation with the BRLM, shall identify Eligible QIBs and circulate serially numbered copies of this
Preliminary Placement Document and the Application Form, specifically addressed to such Eligible QIBs. Any
application to be made in the Issue should be made only upon receipt of serially numbered copies of this
Preliminary Placement Document and the Application Form and not on the basis of the indicative format