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SMS Pharmaceuticals Ltd Interim / Quarterly Report 2020
62302_rns_2020-06-05_706c56c3-c889-4972-9aa7-dabb39eabc2c.pdf
Interim / Quarterly Report
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Registered & Corporate Office: Plot No. 72, H. No. 8-2-334/3 & 4, F~oad No.5, Opp. SBI Executive Enclave, Banjara Hills, Hyderabad - 500 034, Talangana, INDIA. Tel: +91-40-25259999, Fax: +91-A0-2525 9889 CIN : L24239TG1987PLC008066 Email: [email protected], www.smspharma.com
Date: 5th June, 2020
To, The Manager, Corporate Filings Department, BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001
The Manager, Listing Compliance Department, National Stock Exchange of India Ltd. t Exchange Plaza, Plot no. C/l, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
Security Code: 532815
Symbol: SMSPHARMA
Subject: Outcome of Board Meeting held on 5th June, 2020
Dear Sir/Madam,
With reference to the above sUDject, we would like to inform you that Board of Directors of the Company at their meeting held on today, inter-alia considered and approved the following:
-
Standalone Financial Results for the Quarter (Audited) and year ended (Audited) as on 31st March, 2020.
-
Consolidated financial results for the quarter (Audited) and year ended (Audited) Financial Results for the year ended as on 31't March, 2020.
-
Auditor's Report for Standalone and Consolidated Financial Statements.
-
Appointment of Mr. Vamsi Krishna Potluri as Additional Director, and designed as Executive Director.
Accordingly, please find enclosed the following:
-
Declaration under Reg. 33(3)(d).
-
Standalone Financial Results for the Quarter ended (Audited) and year ended (Audited) as on 31't March, 2020.
-
Consolidated Audited Financial Results for the year ended as on 31st March, 2020.
-
Auditor's Report for Standalone and Consolidated Financial Statements for the year ended 31st March, 2020.
- S. Brief Profile of Mr. Vamsi Krishna Potluri
-
- IMPACT OF THE COVID-19 PANDEMIC: SEBI Circular No. SEBI/HO/CFD/CMDI/CIR/P/2020/84 dated May 20, 2020
The meeting commenced at 12.30 PM and concluded at S.lS PM.
Please take the above intimation on your records.
Yours faithfully,
For SMS Pharmaceuticals Limited
(t~~
V.S.Venkatish Company Secretary
Date: 5 th June, 2020
To, The Manager, Corporate Filings Department, BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001
Registered & Corporate Office: Plot No. 72, H. No. 8·2·33413 & 4, Fload No.5, Opp. SBI Executive Enclave, Banjara Hills, Hyderabad· 500 034, Telangana, INDIA. Tel: +91·40·2525 9999, Fax: +91·40·2525 9889 CIN : L24239TG1987PLC008066 Email: [email protected], www.smspharma.com
The Ma nager, Listing Compliance Department, National Stock Exchange of India Ltd. Exchange Plaza, Plot no. C/l, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
Security Code: 532815 Symbol: SMSPHARMA
Sub: Declaration pursuant to Regulation 33(3)(d) of SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015.
Dear Sir / Madam,
In compliance with the provIsions of Regulation 33(3)(d) of SEBI (Listing and Obligations & Disclosure Requirements) Regulat,ions, 2015, as amended by the SEBI (Listing and Obligations & Disclosure Requirements)(Amendment) Regulations, 2016 and SEBI Circular No. ClR/CFD/CMD/56/2016, we hereby declare that M/s Suryanarayana & Suresh, Chartered Accountants (FRN. 006631S), Statutory Auditors of the Company have issued an Audit Report with unmodified opinion on the Audited Financial Results of the Company (Standalone / Consolidated) for the year ended 31st March, 2020.
Kindly take the same on record.
Thanking you, For SMS Pharmaceuticals Limited
J~ -'---
T. LakShm~ray:: Chief Financial Officer
Place: Hyderabad Date: 5th June, 2020 Mr.Vamsi Krishna Potluri is the eldest son of Mr.Ramesh Babu Potluri, Chairman and Managing Director, SMS Pharmaceuticals Ltd. He is the chip of the old block being bought up with same values and virtues which made Mr.Ramesh Babu a successful but humble human being. He had the privilege of dotting and guiding parents and has been learning from them in being humble and inheriting all the characteristics to be a successful second generation technocrat.
Mr.Vamsi Krishna had his schooling from Hyderabad and after his intermediate education joined BITS Pilani Dubai campus for his Bachelors in Engineering in EEE. He was a meticulous student and passed out with flying colours. As part of his BE, he has done his internship in Julphar, one of the biggest Pharma companies in Middle East and owned by the Royal family of Ras Al Khaimah. He worked in their Electrical Engineering department working on ideas to increase the efficiency of the formulation equipment leveraging on what he learnt in his BE and incorporating latest technologies to increase the equipment efficiency.
In his limited internship for just 6 months, he could implement few of his ideas successfully and moved on for his higher education. He has done his Masters in Engineering Management from Missouri University of Science & Technology-Rolla. He had exposure to subjects like Lean manufacturing; finance and cash flow management etc. which will keep him in a good stead going forward in managing Pharma industry.
He joined Ohm Labs which is a biggest manufacturing hub of Ranbaxy in US in the supply chain group and had hands on experience in managing the supply chain to ensure hassle free manufacturing schedules. After working for 1 year with exposure in almost all areas of the operations, he joined family business SMS pharmaceuticals Ltd as Vice President Operations in the year 2014. Took charge of the operations of unit II and was instrumental in planning the business growth of the unit from 50 Crores to 100 crores in a span of 5 years without any capital investment or expansion but realizing the full potential of a limited capacity manufacturing facility though his optimization and marketing skills.
He was also drafted in to the core management team to drive the joint venture with a European partner chemo and was instrumental in development of 8 products under the JV which were developed in the R&D center and got commercialized in vizianagaram facility. In this process, he was regularly visiting and interacting with the R&D teams, motivating them and providing guidance in successfully churning out products in stringent time frames. He is currently involved in management of R&D as well apart from his regular role heading the marketing department in SMS pharmaceuticals Ltd.
He is a director on Board of VKT Pharma which is a subsidiary concern of SMS pharmaceuticals Ltd manufacturing finished formulations and has been driving its entire operations since 2015. He has been successful in getting market authorization for Ranitidine tablets in US market and has completed a Joint venture with US based company, ACIC Pharmaceuticlas developing 4 products with them and commercializing them successfully which are now driving revenues ofVKT.
Mr.Vamsi Krishna has proved his management credentials and capabilities in multiple areas within a short span of time under guidance of Mr.Ramesh babu Potluri. His attitude and man and resources management skills have kept the company in good stead since he joined the organization and believes in hands on approach inculcating the modem business traits with old and established virtues and is poised to take the company to greater heights.
Date: 5th June, 2020
Registered & Corporate Office: Plot No. 72, H. No. 8·2·334/3 & 4, FZoad No.5, Opp. SBI Executive Enclave, Banjara Hills, Hyderabad . 500 034, Telallgana, INDIA. Tel: +91-40·2525 9999, Fax: +91·40·25259889 CIN : L24239TG1987PLC008066
To,
BSE Limited, Listing Department, P J Towers, Dalal Street, Mumbai - 400001. Scrip code: 532815
National Sto&1I£D<<i/ltae'lllfimdiillc\drrrited;nlspharma.com Listing Department, "Exchange Plaza", Bandra-Kurla Complex, Bandra (El, Mumbai - 400 051 Scrip code: SMSPHARMA
SUB: IMPACT OF THE COVID-19 PANDEMIC /," REF: SEBI Circular No. SEBI/HO/CFD/CMDI/CIR/P/2020/84 dated May 20, 2020
Dear Sir/Madam,
With reference to the subject cited above and Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform the Exchange as under:
| SI No. | Particulars | Remarks | |||
|---|---|---|---|---|---|
| 1. | Impact of the CoVID-19' pandemic onthe business | Company has operated at low capacity during thelockdownperiod,hencetherehasbeencorresponding loss in production and business duringperiod.However operationalactivitiesthehaveimproved and presently we are able to operate atnormal capacity. | |||
| 2. | toAbilitymaintainoperationsincluding thefactories/units/officespaces functioning and closed down | The Operations were slightly impacted during theinitial lockdown period due to non-availability ofcontract labour/workforce and shortage of input rawmaterials. Apart from the above, we have reducedworkforce to maintain social distance to implementguidelines.However,currently thethe COVID19operations are normal functioning. | |||
| 3. | Schedule, if any, for restarting theoperations | Since, we are under essential category, hence, ouroperations are continuing by following the Safetyguidelines issued by the authorities. | |||
| 4. | toStepstakenensuresmoothfunctioning of operations | We have taken all the necessary steps for smoothfunctioning of operations on immediately lock downannouncedby the State & Central GovernmentAuthorities. |
| 5. | Estimation of the future impact ofCOVID-19 on its operations | •Takingcare allEmployee'sHealth asutmostpriority and allocated work from home whereverpossiblefor alltheadministrativestaff andofrearrangementshiftschedulesformanufacturingfacilitiestomaintainsocialdistance.•We are maintaining hygienic atmosphere in all thefacilities by considering safety of employees i.e.handsanitizers,faceandthermalmasksscreening.Reschedule of all production batches in line with•ofavailabilitymanpowerwellinputasasmaterials.Organized additional transport facilities to the•employeestomaintainsocialdistancewhiletravelling to facilities as per the guidelines set bythe authorities.There are two key areas which are of the availabilityof Labour and logistics/supply chain instabilities may |
|---|---|---|
| affect the future operations of the Company. | ||
| However, both the Central & State Governments hasgiven relaxation in Lockdown 4.0 to encourage thecontract labors to migrate to their respective nativeplaces as well as move to their work places.Hence, we are not anticipating any major impact onaccount of current pandemic (COVID19) as we aremanufacturinglifesavingdrugswhichareunderessential category. | ||
| 6. | Details of impact of CoVID-19 on Company's | |
| •Capital and financial resources; | There is no impact on capital and financial resourcesof the Company as we are manufacturing lifesavingdrugs and hence, had no impact on general businessas well as on financial resources. Since, the companyadequatefinancialarrangementswithhasBanks/financial institutions. | |
| •profitability | Insignificant impact due to COVID pandemic. | |
| •liquidity position | The Liquidity position of the company is not impacted |
| due to nature of industry and product line and COVID. | |||||
|---|---|---|---|---|---|
| • | ability to service debt and otherfinancing arrangements | The Company will be able to meet all its debts andother financial obligations in full and on time. | |||
| • | assets | Since, the company has undertaken an expansionprogrammeattheexistingfacilityandimplementation has been impacted due to COVID 19.mainlyreceivingThedelayimportedandisequipment'sIndigenouswelldelayinasasconstruction activity due to lock down across theWorld.However, we have taken corrective steps to cover thedelay on account of lock down period. |
Please take the above intimation on your records.
Yours faithfully,
For SMS Pharmaceuticals Limited
t~ {V! wJ/lJ
V.S.Venkatish Company Secretary
SMS PHARMACEUTICALS LIMITED
(CIN : L24239TG1987PLC008066)
Regd. Office: Plot No.n, H.No.8-2-334/3&4, Road No.5, Opp.SBI Executive Enclave, Banjara Hills, Hyderabad-SOO 034, Telangana, India
Tel: +91-40-2525 9999, Fax :+91-40-2525 9889; Email: [email protected]
Standalone Statement of Audited Financial Results for the Quarter and Year Ended 31st March, 2020
( Rs. In Lakhs )
| Quarter Ended | Year ended | |||||
|---|---|---|---|---|---|---|
| S.No | Particulars | 31.03.2020 | 31.12.2019 | 31.03.2019 | 31.03.2020 | 31.03.2019 |
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||
| 1 | Revenue From Operations | 9,646.68 | 8,044.83 | 10,370.96 | 41,194.69 | 46,491.08 |
| 2 | Other Income | 308.77 | 79.22 | 74.86 | 511.34 | 340.31 |
| 3 | Total Revenue | 9,955.45 | 8,124.05 | 10,445.82 | 41,706.03 | 46,831.39 |
| 4 | Expenses | 3,394.98 | 7,699.34 | 25,950.18 | 30,719.13 | |
| (a) Cost of materials consumed | 6,145.70 | 669.97 | (932.85) | (1,314.08) | (1,448.28) | |
| (b) Changes in inventories | (250.86) | 717.52 | 767.22 | 3,363.87 | 3,484.18 | |
| (c) Manufacturing Expenses | 868.97 | 986.96 | 886.26 | 3,935.22 | 3,558.66 | |
| (d) Employee Benefits Expense | 1,007.71 | 293.00 | 318.17 | 1,221.14 | 1,187.34 | |
| (e) Finance costs | 287.34 | 487.43 | 2,206.64 | 1,927.28 | ||
| (fl Depreciation and amortisation expense | 600.32 | 537.57 | 1,267.50 | 1,167.65 | ||
| (g) Other expenses | 433.23 | 274.18 | 386.91 | |||
| Total Expenses - (a to g) | 9,092.41 | 6,874.18 | 9,612.48 | 36,630.47 | 40,595.96 | |
| 5 | Profit before Exceptional and Extraordinary Items and Tax (3-4) | 863.04 | 1,249.87 | 833.34 | 5,075.56 | 6,235.43 |
| 6 | Exceptional items | - | - | - | - | - |
| 7 | Profit before Extraordinary Items and Tax (5-6) | 863.04 | 1,249.87 | 833.34 | 5,075.56 | 6,235.43 |
| 8 | Extraordinary Items | - | - | - | - | - |
| 9 | Profit Before Tax (7-8) | 863.04 | 1,249.88 | 833.34 | 5,075.56 | 6,235.43 |
| 10 | Tax Expenses | |||||
| (1) Current Tax | (46.60) | 290.73 | 83.36 | 894.14 | 1,333.36 | |
| (2) Deferred Tax | 284.90 | 209.11 | 102.46 | 912.57 | 756.73 | |
| 238.31 | 499.84 | 185.82 | 1,806.71 | 2,090.09 | ||
| 647.52 | 3,268.85 | 4,145.34 | ||||
| 11 Net Profit / (Loss) for the Period (9-10) | 624.73 | 750.03 | ||||
| 12 Other Comprehensive Income/(Loss) (OCl): | ||||||
| (A) Items that will not be reclassified to statement of Profit & Loss | ||||||
| Remeasurement of post-employment benefit obligations | (2.46) | (3.88) | (19.42) | (13.15) | (12.95) | |
| 13 Total Other Comprehensive Income/(Loss) before related Tax | (2.46) | (3.88) | (19.42) | (13.15) | (12.95) | |
| 14 Deferred Tax on OCI | (0.86) | (1.36) | (6.78) | (4.59) | (4.52) | |
| 15 Other Comprehensive Income/(Loss) after tax for the period/Year (13 | (1.60) | (2.53) | (12.63) | (8.55) | (8.43) | |
| 14)16 Total Comprehensive Income for the period/year (11+15) | 623.13 | 747.50 | 634.89 | 3,260.30 | 4,136.92 | |
| 17 | Earnings Per Equity Share | |||||
| (of Re.1/ each) (not annuaHsed) | ||||||
| (a) Basic | 0.74 | 0.89 | 0.76 | 3.86 | 4.90 | |
| (b) Diluted | 0.74 | 0.89 | 0.76 | 3.86 | 4.90 | |
| 18 Paid-up equity share capital (Face Value of Re.1/- each) | 846.52 | 846.52 | 846.52 | 846.52 | 846.52 | |
| 19 Other Equity | 35,895.87 | 33,145.83 | ||||
| Standalone Balance Sheet | (Rs in Lakhs) | ||
|---|---|---|---|
| Sr.NParticulars | As at | ||
| o. | 31.03.2020 | 31.03.2019 | |
| AASSETS | |||
| 1 Non-Current Assets | |||
| Property, plant and equipment, | 27,518.98 | 28,010.79 | |
| Right-of-use Assets | 446.31 | - | |
| Capital work-in-progress | 4,212.31 | 1,830.13 | |
| Intangible Assets | 83.26 | 114.88 | |
| Financial Assets | |||
| a) Investments | 4,499.87 | 4,499.87 | |
| b) Bank Balances | 224.89 | 212.50 | |
| c) Other Financial Assets | 331.95 | 343.04 | |
| d) Other Non-Current Assets | 3,514.63 | 1,911.81 | |
| Sub Total :Non-Current Assets | 40,832.20 | 36,923.02 | |
| 2 Current Assets | |||
| Inventories | 12,920.02 | 13,639.98 | |
| Financial Assets | |||
| a) Trade Receivables | 4,877.07 | 2,602.25 | |
| b) Cash and Cash Equivalents | 954.42 | 1,479.77 | |
| c) Bank Balances other than b) above | 10.91 | 7.90 | |
| d) Other Financial Assets | 28.50 | 24.33 | |
| e) Other Current Assets | 2,776.81 | 2,963.29 | |
| f) Current Tax Asset (Net) | 310.36 | 41.51 | |
| Sub Total: Current Assets | 21,878.09 | 20,759.03 | |
| TOTAL ASSETS | 62,710.29 | 57,682.05 | |
| 1 Equity:Share CapitalOther Equitya) Reserves & Surplus | 846.5235,895.87 | 846.5233,145.83 | |
| Sub-Total-Shareholders' funds | 36,742.39 | 33,992.35 | |
| Liabilities: | |||
| 2 Non-Current Liabilities | |||
| a) Financial Liabilities | |||
| (i) Borrowings | 6,822.10 | 6,221.05 | |
| (ii) Lease Liabilities | 477.99 | - | |
| b) Provision for Employee Benefit Obligations | 172.64 | 151.84 | |
| c) Deferred Tax Liabilities (net) | 3,974.41 | 3,061.84 | |
| Sub-Total-Non-Current Liabilities | 11,447.14 | 9,434.73 | |
| 3 Current Liabilities | |||
| a) Financial Liabilities | |||
| (i) Borrowings | 6,115.52 | 7,080.86 | |
| (ii) Trade Payables -MSME | 23.01 | 12.53 | |
| (iii) Trade Payables Otherthan MSME | 4,426.39 | 4,757.34 | |
| J0~ V (iv) Other Financial Liabilities | 2,843.76 | 1,296.85 | |
| 72.04 | |||
| 'iovision for Empl.oy.ee Benefit Obligations,lydBr~ l§l)i t ~r Current Liabilities | 72.04 | ||
| \/.;;y | 1,040.0414,520.76 | 1,035.35 | |
| ~ ">r"Sub-Total -Current LiabilitiesI'III'--""t''"i:: | 1 | 14,254.97 |
SMS Pharmaceuticals Limited
Standalone Statement of Cash Flow for the Year Ended 31st March, 2020
| 5 No | Particulars | For the Year ended31st March, 2020 | For the Year ended31st March, 2019 |
|---|---|---|---|
| A | Cash Flow from Operating Activities | ||
| Profit before Income Tax | 5,075.56 | 6,235.43 | |
| Adjustments for: | |||
| Depreciation and Amortisation Expense | 2,206.64 | 1,927.28 | |
| Interest Income Classified as Investing Cash Flows | (16.06) | (18.92) | |
| Allowance for Doubtful Debts | 10.31 | ||
| Interest on Non Current Borrowings | 646.51 | 779.43 | |
| Provision for Employee Benefits | 12.25 | (27.82) | |
| Amortisation of Transaction Cost on Borrowings | 6.23 | 10.27 | |
| Notional Rent Expense | 4.94 | ||
| Loss on Sale of Assets | 5.14 | 0.11 | |
| Operating Profit before Working Capital Changes | 7,941.21 | 8,916.09 | |
| Change in Operating Assets and Liabilities | |||
| (Increase)/Decrease in Trade Receivables | (2,274.82) | (197.64) | |
| (Increase)/Decrease in Inventories | 719.96 | (2,892.45) | |
| (Increase)/Decrease in Other Non Current Financial Assets | 11.08 | (104.36) | |
| (Increase)/Decrease in Other Non Current Asset | (1,602.82) | (82.74) | |
| (Increase)/Decrease in Other Current Financial Assets | (4.18) | 29.20 | |
| (Increase)/Decrease in Other Current Assets | 186.48 | (601.65) | |
| (Increase)/Decrease in Prepaid Taxes | 47.37 | (53.26) | |
| Increase/(Decrease) in Trade Payables | (375.78) | 898.34 | |
| Increase/(Decrease) in Other Current Liabilities | 533.06 | 402.31 | |
| (2,759.65) | (2,602.25) | ||
| Cash generated from Operations | 5,181.56 | 6,313.84 | |
| Income Taxes Paid | (1,210.36) | (1,338.11) | |
| Net Cash Inflow from Operating Activities "AU | 3,971.20 | 4,975.73 | |
| B | Cash flows from Investing Activities | ||
| Purchase of Property, Plant and Equipment | (4,273.40) | (3,483.82) | |
| Sale of Property, Plant and Equipment | 13.36 | 9.29 | |
| Margin Money Deposits | (27.45) | ||
| Interest Received on Margin Money Deposit | 31.12 | 7.19 | |
| Net Cash Outflow from Investing Activities uBu | (4,256.37) | (3,467.33) | |
| C | Cash Flows from Financing Activities | ||
| Proceeds from Long Term Borrowings | 2,886.32 | 150.00 | |
| Repayment of Long Term Borrowings | (1,075.00) | (1,637.50) | |
| Proceeds from Short Term Borrowings | 1,199.56 | 4,067.20 | |
| Repayment of Short Term Borrowings | (2,164.89) | (2,826.05) | |
| Interest paid on Borrowings | (575.90) | (790.22) | |
| Dividend Paid to Company's Shareholders | (510.26) | (255.13) | |
| Net Cash Inflow (Outflow) from Financing Activities "c" | (240.17) | (1,291.70) | |
| Net Increase (Decrease) in Cash and Cash Equivalents (A+B+C)Cash and Cash Equivalents at the Beginning of the | (525.34) | 216.69 | |
| Financial Year (Refer Note 9) | 1,479.77 | 1,263.08 | |
| Cash and Cash Equivalents at End of the Year (Refer Note 9) | 954.42 | 1,479.77 |
Notes:
- 1 The audited standalone audited financial results have been reviewed by the Audit Committee of the board on 05th June, 2020 and approved by the Board of Directors of the Company at their meeting held on 05th June, 2020.
- 2 The standalone audited financial results of the Company have been prepared in accordance with the Indian Accounting Standards prescribed under section 133 ofthe Companies Act,2013 (lithe Act") read with relevant rules issued thereunder ("Ind AS") and other accounting principles generally accepted in India and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015
- 3 The main reason for decrease in revenues during the current financial year as compared to previous financial year is due to decrease in offtake of Anti-Retroviral drugs which is mainly, delay in bidding process by the customer under contract manufacturing. However, the company is focusing to manufacture and sell of other new molecules developed by its own R&D and to penetrate into overseas markets to increase the revenues as well as margins. In addition to this the Company is evaluating opportunities arising out of COVID-19.
- 4 The Board of Directors, at their meeting held on 18th March, 2020 approved for the payment of interim dividend of Rs. 0.25 per equity share of Re.l each aggregating to Rs.211.63 Lakhs and also remitted an amount of Rs.43.50 Lakhs towards Dividend Distribution Tax. The Board considered the interm dividend as final dividend for the financial year 2019-20.
- 5 Effective 1st April, 2019, the Company adopted Ind-AS 116, on all lease contracts existing on 1st April, 2019 using the modified retrospective method with Right-of-use assets recognized at an amount equal to the lease liabilities in the balance sheet. Accordingly, comparatives for the year ended 31st March, 2019 have not been retrospectively adjusted. During the quarter and year ended, the company has recognized interest expense on lease amounting to Rs. 13.92 Lakhs Rs.58.44 Lakhs and depredation on (Ight-of-use assets amount'lng to Rs. 23.91 Lakhs, Rs.9S.64 Lakhs respectively.
- 6 The Government of India, on 20th September 2019, vide the taxation Laws (Amendment) Ordinance 2019, the ordinance inserted a new section 115BAA in the Income tax Act,1961, which provides an option to the company for paying 'mcome tax at reduced rates as per the provisions/conditions defined in the said section. The company has evaluated the above Ordinance and based on its evaluation currently the Management proposed to continue with the old tax rates.
- 7 COVID-19 is the infectious d'isease caused by the most recently discovered coronavirus a pandemic. The Group has adopted measures to curb the spread of infection in order to protect the health of our employees and ensure business continuity with minimal disruption, the effect of operations of the company for the quarter and year ending 31st March,2020 is marginal. The company will continue to closely monitor any material changes to future economic conditions.
- 8 The figures for the quarter ended 31st March 2020 are the balancing figures between audited figures in respect of full financial year upto 31st March 2020 and the unaudited published year to date figures upto 31st December 2019, being the date of the end of the third quarter of the financial year which were subjected to limited review.
- 9 The Company is engaged in the manufacturing of Active Pharmaceutical Ingredients and intermediates and the same constitutes a single reportable business segment as per !nd ASI08.
- 10 Figures of previous period have been regrouped / rearranged wherever necessary.
c. ''"fyr ,.
Ramesh Babu Pot/uri Chairman and Managing Director
Place: Hyderabad Date: 05-06-2020
Flat # C2, Millenium House, # 8·2·601/B, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad . 500 034. ':Ii' : 040-23386783/23386784 M: [email protected]
INDEPENDENT AUDITOR'S REPORT ON THE AUDIT OF ANNUAL STANDALONE FINANCIAL RESULTS AND REVIEW OF QUARTERLY STANDALONE FINANCIAL RESULTS
TO THE BOARD OF DIRECTORS OF SMS PHARMACEUTICALS LIMITED
Opinion
We have (a) audited the accompanying Statement of Standalone Financial Results for the year ended March 31, 2020 and (b) reviewed the Standalone Financial Results for the quarter ended 31 March 2020 being the balancing figure between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the current financial year (refer 'Other Matter' paragraph below) which were subject to limited review by us, both included in the accompanying "Statement of Standalone Audited Results for the Quarter and Year ended 31 March 2020" ("the Statement" / "Standalone Financial Results") of SMS PHARMACEUTICALS LIMITED ("the Company"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the Listing Regulations) and both included in the Statement.
In our opinion and to the best of our information and according to the explanations given to us, Standalone Financial Results for the year ended March 31, 2020:
a. are presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended; and
b. gives a true and fair view in conformity with Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34") prescribed under section 133 of the Companies Act 2013 ("the Act") read with relevant rules issued there illlder and other accounting principles generally accepted in India of the net profit and total comprehensive income and other financial information of the Company for the three months and year ended March 31, 2020.
With respect to the Standalone Financial Results for the quarter ended 31 March 2020, based on our review, nothing has come to our attention that causes us to believe that the accompanying Statement, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.
Flat # C2, Millenlum House, # 8-2-601/6, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034. ~ : 040-23386783/23386784 [>2:J: [email protected]
Basis for Opinion
We conducted our audit of this Standalone Financial Results 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 Auditor's Responsibilities for the Audit of the Standalone Financial Results 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 independence requirements that are relevant to our audit of the Standalone Financial Results under the provisions of the Act and the Rules there under 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion.
Management's Responsibilities for the Standalone Financial Results
This Statement, which is the responsibility of the Company's Management and approved by the Board of Directors, has been compiled from the related audited Standalone Financial Statements. The Company's Board of Directors are responsible for the preparation and presentation of the Standalone Financial Results that give a true and fair view of the net profit and other comprehensive income and other financial information of the Company in accordance with Ind AS 34 prescribed under section 133 of the Act, read with relevant rules issued there under and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate 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 Standalone Financial Results that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Results, the Board of Directors are responsible for assessing the Company'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 the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the financial reporting process of the Company.
Flat # C2, Millenium House, # 8-2-601/B, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500034. ~ : 040-23386783/23386784 [>.j: [email protected]
Auditors Responsibilities
a) Audit of the Standalone Financial Results for the year ended 31 March 2020
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Results 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 Standalone Financial Results.
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 Standalone Financial Results, 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 controls.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
• Conclude on the appropriateness of the 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 Company'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 Statement 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.
Flat # C2, Millenium House, # 8-2-601/8, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034. '.ii' : 040-23386783/23386784 t8'J: [email protected]
• Evaluate the overall presentation, structure and content of the Standalone Financial Results, including the disclosures, and whether the Standalone Financial Results represent the underlying transactions and events in a manner that achieves fair presentation .
• Obtain sufficient appropriate audit evidence regarding the Standalone Financial Results of the Company to express an opinion on the Standalone Financial Results.
Materiality is the magnitude of misstatements in the Standalone Financial Results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Results 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 Standalone Financial Results.
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 controls that "e 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.
b) Review of the Standalone Financial Results for quarter ended 31 March 2020
We conducted our review of the Standalone Financial Results for the quarter ended 31 March 2020 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 (ICAI). A review of interim financial information consists of making inquiries, primarily of the Company's personnel 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.
Flat II C2, Millenium House, # 8-2·601/8, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500034. ~ : 040-23386783/23386784 M: [email protected]
Other Matter
The Statement includes the Standalone Financial Results for the quarter ended 31 March 2020 being the balancing figure between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the current financial year which were subject to limited review by us. Our opinion on the Statement is not modified in respect of this matter.
Place: Hyderabad Date: 05-06-2020
UDIN: 20227679AAAACP9291
.... ,¥' .... ' '''''".,,-, ......... '''' ....... L..-I ... ".," L..""" (CIN : l24239TG1987PlC008066)
Regd. office: Plot No.72, H.No.8-2-334/3&4, Road No.5, Opp.SBI Executive Enclave, Banjara Hills, Hyderabad-SOO 034, Tefangana, India
Tel: +91-40-2525 9999, Fax :+91-40-2525 9889; Email: [email protected]
Consolidated Statement of Audited Financial Results for the Year Ended 31st March, 2020
| ( Rs. In lakhs) | ||||||
|---|---|---|---|---|---|---|
| Year ended | Year ended | |||||
| S.No | Particulars | 31.03.2020 | 31.12.2019 | 31.03.2019 | 31.03.2020 | 31.03.2019 |
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||
| 1 | Revenue From Operations | 9,646.68 | 8,044.83 | 10,370.96 | 41,194.68 | 46,491.08 |
| 308.77 | 79.22 | 74.86 | 511.35 | 340.31 | ||
| 2 | Other Income | |||||
| Total Revenue | 9,955.45 | 8,124.05 | 10,445.82 | 41,706.03 | 46,831.39 | |
| 3 | ||||||
| 4 | Expenses | |||||
| (a) Cost of Materials Consumed | 6,145.70 | 3,394.98 | 7,699.34 | 25,950.18 | 30,719.13 | |
| (b) Changes in Inventories of Finished Goods | (250.86) | 669.97 | (932.85) | (1,314.08) | (1,448.28) | |
| Work-in-Progress and Stock-in Trade | ||||||
| (c) Manufacturing Expenses | 868.97 | 717.52 | 767.22 | 3,363.87 | 3,484.18 | |
| (d) Employee Benefit Expense | 1,007.71 | 986.96 | 886.26 | 3,935.22 | 3,558.67 | |
| (e) Finance Costs | 287.34 | 293.00 | 318.17 | 1,221.14 | 1,187.34 | |
| (f) Depreciation and Amortisation Expense | 600.32 | 537.57 | 487.43 | 2,206.64 | 1,927.29 | |
| (g) Other Expenses | 433.23 | 274.18 | 386.91 | 1,267.50 | 1,167.63 | |
| Total Expenses - (a to h) | 9,092.41 | 6,874.18 | 9,612.48 | 36,630.47 | 40,595.96 | |
| S | Profit before Exceptional and Extraordinarv Items and | 863.04 | 1249.87 | 833.34 | 5075.56 | 6235.43 |
| 6 | Exceptional items | - | - | - | - | |
| 7 | Profit before Extraordinary Items and Tax (5~6) | 863.04 | 1,249.87 | 833.34 | 5,075.56 | 6,235.43 |
| 8 | Extraordinary Items | - | - | |||
| 9 | Profit before Tax (7-8) | 863.04 | 1,249.87 | 833.34 | 5,075.56 | 6,235.43 |
| 10 | Tax Expenses | |||||
| (1) Current Tax | (46.60) | 290.73 | 83.36 | 894.14 | 1,333.36 | |
| (2) Deferred Tax | 284.90 | 209.11 | 102.46 | 912.57 | 756.72 | |
| 238.31 | 499.84 | 185.82 | 1,806.71 | 2,090.08 | ||
| 11 | Net Profit / (loss) for the Year (9-10) | 624.73 | 750.03 | 647.52 | 3,268.85 | 4,145.35 |
| 12 | Share of profit / (loss) of associates | 14.52 | 11.70 | 681.68 | (111.47) | (140.51) |
| 13 | Minority Interest | - | - | |||
| 14 | Net Profit / (loss) after taxes, minority interest and | 639.25 | 761.73 | 1,329.20 | 3,157.38 | 4,004.84 |
| share of profit / (loss) of associates (11+12-13) | ||||||
| 15 | Other Comprehensive Income/(loss) (OCI): | |||||
| Items that wHl not be reclassified to Statement of Profit & Loss: | (2.46) | (3.88) | (19.42) | (13.15) | (12.95) | |
| 16 | Share of Other Comprehensive Income in Associates | (7.41) | 0.53 | 0.43 | (9.09) | 2.13 |
| 17 | Income Tax effect on the above | (2.79) | (1.22 | (6.67) | (6.96) | (3.97 |
| 18 | Other Comprehensive Income/(Loss) after tax for the Period/Year (16-17) | (7.08) | (2.13) | (12.32) | (15.28) | (6.85) |
| 19 | Total Comprehensive Income/(loss) for the Period/Year (14+18) | 632.17 | 759.60 | 1,316.88 | 3,142.10 | 3,997.99 |
| 20 | Earning Per Equity Share | |||||
| (of Re.lj each) (not annualised) | ||||||
| (a) Basic | 0.76 | 0.90 | 1.57 | 3.73 | 4.73 | |
| (b) Diluted | 0.76 | 0.90 | 1.57 | 3.73 | 4.73 | |
| 21 | Paid-up equity share capital (Face Value of Re.l/- each) | 846.52 | 846.52 | 846.52 | ||
| 846.52 | 846.52 | |||||
| 22 | Other Equity | 31,345.22 | ||||
| 33,977.40 | ||||||
| CONSUMATEA DAMINE SHEEL | (hs.iii cakiis) | ||
|---|---|---|---|
| Sr. | Particulars | As at | |
| No. | 31.03.2020 | 31.03.2019 | |
| ASSETS | |||
| $\mathbf{1}$ | Non-Current Assets | ||
| (a) Property, Plant and Equipment | 27,518.98 | 28,010.79 | |
| (b) Right-of-use Assets | 446.31 | ||
| (c) Capital Work-in-Progress | 4,212.31 | 1,830.13 | |
| (d) Intangible Assets | 83.26 | 114.88 | |
| (e) Financial Assets | |||
| (i) Investments | 2,581.04 | 2,699.24 | |
| (ii) Bank Balances | 224.89 | 212.50 | |
| (iii) Other Financial Assets | 331.95 | 343.04 | |
| (f) Other Non-Current Assets | 3,514.63 | 1,911.81 | |
| Sub Total : Non-Current Assets | 38,913.37 | 35,122.39 | |
| $\overline{2}$ | Current Assets | ||
| (a) Inventories | 12,920.02 | 13,639.98 | |
| (b) Financial Assets | |||
| (i) Trade Receivables | 4,877.07 | 2,602.25 | |
| (ii) Cash and Cash Equivalents | 954.42 | 1,479.77 | |
| (iii) Bank Balances other than (ii) above | 10.91 | 7.90 | |
| (iv) Other Financial Assets | 28.50 | 24.33 | |
| (c) Other Current Assets | 2,776.81 | 2,963.29 | |
| (d) Current Tax Asset (Net) | 310.36 | 41.51 | |
| Sub Total: Current Assets | 21,878.09 | 20,759.03 | |
| TOTAL ASSETS | 60,791.46 | 55,881.42 | |
| $\mathbf{I}$ | EQUITY AND LIABILITIES | ||
| $\overline{1}$ | Equity: | ||
| (a) Equity Share Capital | 846.52 | 846.52 | |
| (b) Other Equity | 33,977.04 | 31,345.20 | |
| Sub-Total -Shareholders' funds | 34,823.56 | 32,191.72 | |
| $\overline{2}$ | Liabilities: | ||
| $\overline{\mathsf{A}}$ | Non-Current Liabilities | ||
| (a) Financial Liabilities | |||
| (i) Borrowings | 6,822.10 | 6,221.05 | |
| (ii) Lease Liabilities | 477.99 | ||
| (b) Provision for Employee Benefit Obligations | 172.64 | 151.84 | |
| (c) Deffered Tax Liabilities (Net) | 3,974.41 | 3,061.84 | |
| Sub-Total -Non-Current Liabilities | 11,447.14 | 9,434.73 | |
| B | Current Liabilities | ||
| (a) Financial Liabilities | |||
| (i) Borrowings | 6,115.52 | 7,080.86 | |
| (ii) Trade Payables - MSME | 23.01 | 12.53 | |
| (iii) Trade Payables Otherthan MSME | 4,426.39 | 4,757.34 | |
| (iv) Other Financial Liabilities | 2,843.76 | 1,296.85 | |
| 72.04 | 72.04 | ||
| (b) Provision for Employee Benefit Obligations | |||
| (c) Other Current Liabilities | 1,040.04 | 1,035.35 | |
| Sub-Total - Current Liabilities | 14,520.76 | 14,254.97 | |
| TOTAL - EQUITY AND LIABILITIES | 60,791.46 | 55,881.42 |
SMS Pharmaceuticals Limited
Consolidated Statement of Cash Flow for the Year Ended 31st March, 2020
| S No | Particulars | For the Year ended31st March, 2020 | For the Year ended31st March, 2019 |
|---|---|---|---|
| A | Cash Flow from Operating Activities | ||
| Profit before Income Tax | 5,075.56 | 6,235.43 | |
| Adjustments for: | |||
| Depreciation and Amortisation Expense | 2,206.64 | 1,927.28 | |
| Interest Income Classified as Investing Cash Flows | (16.06) | (18.92) | |
| Allowance for Doubtful Debts | 10.31 | ||
| Interest on Non Current Borrowings | 646.51 | 779.43 | |
| Provision for Employee Benefits | 12.25 | (27.82) | |
| Amortisation of Transaction Cost on Borrowings | 6.23 | 10.27 | |
| Notional Rent Expense | 4.94 | ||
| loss on Sale of Assets | 5.14 | 0.11 | |
| Operating Profit before Working Capital Changes | 7,941.21 | 8,916.09 | |
| Change in Operating Assets and liabilities | |||
| (Increase)/Decrease in Trade Receivables | (2,274.82) | (197.64) | |
| (Increase)/Decrease in Inventories | 719.96 | (2,892.45) | |
| (Increase)/Decrease in Other Non Current Financial Assets | 11.08 | (104.36) | |
| (Increase)/Decrease in Other Non Current Asset | (1,602.82) | (82.74) | |
| {Increase)/Decrease in Other Current Financial Assets | (4.18) | 29.20 | |
| (Increase)/Decrease in Other Current Assets | 186.48 | (601.65) | |
| (Increase)/Decrease in Prepaid Taxes | 47.37 | (53.26) | |
| Increase/(Decrease) in Trade Payables | (375.78) | 898.34 | |
| Increase/(Decrease) in Other Current liabilities | 533.06 | 402.31 | |
| (2,759.65) | (2,602.25) | ||
| Cash generated from Operations | 5,181.56 | 6,313.84 | |
| Income Taxes Paid | (1,210.36) | (1,338.11) | |
| Net Cash Inflow from Operating Activities uAIl | 3,971.20 | 4,975.73 | |
| B | Cash flows from Investing Activities | ||
| Purchase of Property, Plant and Equipment | (4,273.40) | (3,483.82) | |
| Sale of Property, Plant and Equipment | 13.36 | 9.29 | |
| Margin Money Deposits | (27.45) | ||
| Interest Received on Margin Money Deposit | 31.12 | 7.19 | |
| Net Cash Outflow from Investing Activities 118 11 | (4,256.37) | (3,467.33) | |
| C | Cash Flows from Financing Activities | ||
| Proceeds from Long Term Borrowings | 2,886.32 | 150.00 | |
| Repayment of long Term Borrowings | (1,D75.00) | (1,637.50) | |
| Proceeds from Short Term Borrowings | 1,199.56 | 4,067.20 | |
| Repayment of Short Term Borrowings | (2,164.89) | (2,826.05) | |
| Interest paid on Borrowings | (575.90) | (790.22) | |
| Dividend Paid to Company's Shareholders | (510.26) | (255.13) | |
| Net Cash Inflow (Outflow) from Financing Activities "C" | (240.17) | (1,291.70) | |
| Net Increase (Decrease) in Cash and Cash Equivalents (A+B+C)Cash and Cash EqUivalents at the Beginning of the | (525.34) | 216.69 | |
| Financial Year (Refer Note 9) | 1,479.77 | 1,263.08 | |
| Cash and Cash Equivalents at End of the Year (Refer Note 9) | 954.42 | 1,479.77 |
Notes:
- 1 The above Consolidated Financial Results have been reviewed and recomended by the Audit Committee on 05th June, 2020 and have been approved by the Board of Directors at its meeting held on 05th June, 2020 and have been audited by the Statutory Auditors of the Company.
- 2 The consolidated financial results have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and other accounting principles generally accepted in India and guidelines issued by the Securities and Exchange Board of India.
- 3 VKT Pharma Pvt Ltd 'IS considered as assodate of the Company for consolidation in which the Company holds 42,62% in their equity. Accord'lngly, the results include appropriate share of the company in the results of the said associate.
- 4 Consolidated Financial Statements have been prepared by applying Accounting Standard "Ind AS" 27 "Accounting for Investments in Associates in Consolidated Finandal Statements" as applicable under the Companies Act,2013 and applicable rules there under.
- 5 The main reason for decrease in revenues during the current finandal year as compared to previous finandal year is due to decrease in offtake of Anti-Retroviral drugs which is mainly, delay in bidding process by the customer under contract manufacturing, However, the Group is focusing to manufacture and sell of other new molecules developed by its own R&D and to penetrate into overseas markets to increase the revenues as well as margins. In addition to this the Group is evaluating opportunities arising out of COVID-19.
- 6 The Board of Directors, at their meeting held on 18th March, 2020 approved for the payment of interim dividend of Rs. 0.25 per equity share of Re.1 each aggregating to Rs.211.63 Lakhs and also remitted an amount of Rs.43.50 Lakhs towards Dividend Distribution Tax.
- 7 Effective 1st April, 2019, the group adopted Ind-AS 116, on all lease contracgts existing on 1st April, 2019 using the modified retrospective method with Rightof-use assets recognized at an amount equal to the lease liabilities in the balance sheet. Accordingly, comparatives for the year ended 31st March, 2019 have not been retrospectively adjusted. During the quarter and year ended, the group has recognized interest expense on lease amounting to Rs. 13.92 Lakhs RS.58.44 Lakhs and depredation on right-of-use assets amounting to Rs. 23.91 Lakhs, Rs.95.64 Lakhs respectively.
- 8 The Government of India, on 20th September 2019, vide the taxation Laws (Amendment) Ordinance 2019, the ordinance inserted a new section 115BM in the Income tax Act,1961, Which provides an option to the group for paying income tax at reduced rates as per the provisions/conditions defined in the said section. The group has evaluated the above Ordinance and based on its evaluation currently the management proposed to continue with the old tax rates.
- 9 COVID-19 is the infectious disease caused by the most recently discovered coronavirus, SARS-CoV-2. In March 2020, the WHO declared COV1D~19 a pandemic. The Group has adopted measures to curb the spread of infection in order to protect the health of our employees and ensure bUSiness continuity with minimal disruption. The effect of operations of the group forthe quarter and year ending 31st March,2020 is marginal. The group will continue to closely monitor any materia! changes to future economic conditions.
- 10 The figures for the quarter ended 31st March 2020 are the balancing figures between audited figures in respect of full financial year upto 31st March 2020 and the unaudited published year to date figures upto 31st December 2019, being the date of the end of the third quarter of the financial year which were subjected to limited review.
- 11 The group is engaged in the manufacturing of Active Pharmaceutical Ingredients and intermediates and the same constitutes a single reportable business segment as per lnd ASlOS.
- 12 Figures of previous period have been regrouped I rearranged wherever necessary.
Place: Hyderabad
Date: 05-06-2020 Ramesh Babu Potluri Chairman and Managing Director
Flat # C2, Millenium House, # 8-2-601/B, Road No, 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500034, ~ : 040-23386783/23386784 1>:<:]: [email protected]
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OJ' DIRECTORS OF SMS PHARMACEUTICALS LIMITED
Report on the Audit of Consolidated Financial Results
Opinion
We have audited the accompanying consolidated annual financial results of SMS PHARMACEUTICALS LIMITED (hereinafter referred to as the holding Company) and its associate (Holding Company and its associate together referred to as the Group) for the year ended March 31, 2020, attached here with, being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the Listing Regulations).
In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial Results for the year ended March 31, 2020:
(i) includes the share of profit; (loss) of the following associate entity
VKT Pharma Private Limited
- (ii) are presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended; and
- (iii) gives a true and fair view in conformity with Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34") prescribed under section 133 of the Companies Act 2013 ("the Act") read with relevant rules issued there under and other accounting principles generally accepted in India of the net profit and total comprehensive income and other financial information of the Group for the year ended March 31,2020.
Flat # C2, Millenium House, # 8-2-601/8, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034. ~ : 040-23386783/23386784 [:>:~: [email protected]
Basis for Opinion
We conducted our audit of this Consolidated Financial Results 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 Auditor's Responsibilities for the Audit of the Consolidated Financial Results section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the independence requirements that are relevant to our audit of the Consolidated Financial Results under the provisions of the Act and the Rules there under 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion.
Management's Responsibilities for the Consolidated Financial Results
These Consolidated financial results have been prepared on the basis of the consolidated annual financial statements. The Holding Company's Board of Directors are responsible for the preparation and presentation of these consolidated financial results that give a true and fair view of the net profit/ loss and other comprehensive income and other financial information of the Group including its associates and jointly controlled entities in accordance with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued there under and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and its associates and jointly controlled entities and for preventing and detecting frauds and other irregularities; 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial results 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 results by the Directors of the Holding Company, as aforesaid.
Flat # C2, Millenium House, # 8-2-601/8, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034. ~ : 040-23386783/23386784 l8J: [email protected]
In preparing the consolidated financial results, the respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for assessing the ability of the Group and its associates and jointly controlled entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsIble for overseeing the financial reporting process of the Group and of its associates and jointly controlled entities.
Auditor's Responsibilities for the audit of the Consolidated Financial Results
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Results 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 exisg. 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 Results.
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 Results, 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 controls.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in tlle circumstances, but not for the purpose of expressing an opinion on effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
Flat # C2, Millellium House, # 8-2-601/B, Road No. 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034. ~ : 040-23386783/23386784 M: [email protected]
• Conclude on the appropriateness of the 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 Company'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 Statement 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 Results, including the disclosures, and whether the Consolidated Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the Consolidated Financial Results of the Company to express an opinion on the Consolidated Financial Results.
Materiality is the magnitude of misstatements in the Consolidated Financial Results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgea~le user of the Consolidated Financial Results 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 Results.
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 controls 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 safegnards.
We also performed procedures in accordance with the circular issued by the SEE! under Regulation 33(8) of the Listing Regnlations, as amended, to the extent applicable.
The consolidated financial results includes the audited financial statements/ financial results of associate namely VKT Pharma Private Limited which have been audited by their auditor whose financial statements / financial results reflect total assets of Rs.16634.29 lakhs as at 31 March 2020 total revenue of Rs.3863.69Iakhs, total net loss after tax of Rs.261.56 lakhs and total comprehensive income of Rs.245.78Iakhs for the year ended 31 March 2020.
Flat # (2, Millenium House, # 8-2'601/B, Road No, 10, Near Zaheer Nagar Cross Road, Banjara Hills, Hyderabad - 500 034, ~ : 040-23386783/23386784 ~<J: [email protected]
The independent auditors' reports on financial statements/ Financial Results of the entity have been furnished to us and our opinion on the consolidated Financial Results, in so far as it relates to the amounts and disclosures included in respect of the entity, is based solely on the report of such auditors and the procedures performed by us are as stated in paragraph above.
Our opinion on the consolidated Financial Results is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
The Statement: includes the Consolidated Financial Results for the quarter ended 31 March 2020 being the balancing figure between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the current financial year which were subject to limited review by us. Our opinion on the Statement is not modified in respect of this matter.
Place: Hyderabad Date: 05-06-2020
UDlN: 20227679AAAACQ5567
For Suryanarayana & Suresh., Chartered Accountants
Reg" No.OO6631, S;U'r, ') • //'1 if I) / />J,:<21f"vVvo l/ LV Nagendra Rao Partner
M. No. 227679
