Advanced Enzyme Technologies Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020

* The Interest Coverage Ratio for Quarter ended March 31, 2020 is 56.38x & for year ended March 31, 2020 is 61.80x

1. The above standalone financial results of the Advanced Enzyme Technologies Limited ('the Company') were reviewed by the Audit Committee and thereafter approved by the Board of Directors at their meeting held on 30 May 2020. The statutory auditors have expressed an unmodified opinion. The audit report will be filed with stock exchanges and will be available on the Company’s website. The above results has been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies in India.

2. The Company operates only in one business segment viz. 'manufacturing and sales of enzymes'.

3. The Company has adopted Ind AS 116 'Leases', effective annual reporting period beginning 1 April 2019 and applied the standard to its leases using modified retrospective approach. Accordingly, the Company is not required to restate the comparative information for the previous year/period. There is no impact of adoption of Ind AS 116 to the retained earnings as at 1 April 2019.

The Company has recognised, a lease liability of Rs. 8.03 million and corresponding Right-of-Use (ROU) asset on the date of transition i.e. 1 April, 2019.

The major impact of adopting Ind AS 116 on the Company’s unaudited standalone financial results for the quarter and year ended 31 March 2020 is as follows:

- Depreciation and amortisation expenses has increased by Rs. 0.77 million and Rs. 3.09 million for the quarter and year ended 31 March 2020 respectively due to amortisation of ROU asset.

- Finance cost has increased by Rs 0.13 million and Rs. 0.63 million for the quarter and year ended 31 March 2020 respectively due to interest accrued on outstanding lease liability.

- Rent expense has decreased by Rs 0.87 million and Rs. 3.39 million for the quarter and year ended 31 March 2020 respectively due to recognition of operating lease as ROU asset and a corresponding lease liability.

4. The Company has allotted 2,000 equity shares during the quarter ended 31 March 2020 and 29,500 equity shares during the year ended 31 March 2020 to employees under the 'AETL Employee Stock Option Scheme 2015’- ("AETL ESOS 2015").

5. During the year ended 31 March 2020, the Company has provided for impairment in the value of investment made in Advanced Enzymes Malaysia Sdn. Bhd. ('AEM'), loan given to AEM and interest receivable from AEM aggregating to Rs. 10.5 million. The Company plans to initiate the procedure for winding up of AEM.

6. The Company has decided to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by the taxation Laws (Amendment) Ordinance, 2019 from financial year 2021-22. Accordingly, there is no impact on the provision for income tax for the quarter and year ended 31 March 2020. The Company expects to reverse the deferred tax liabilities partly in the current financial year and partly in the subsequent periods. Accordingly, the deferred tax balances have been re-measured using the tax rate expected to be prevalent in the period in which the deferred tax balances are expected to reverse, and the resultant impact has been recognised in the current period Statement of Profit and Loss.

7. The Company has decided to sell/transfer lease rights for one of its leasehold land situated at Jalna, Maharashtra. Accordingly, the cost of land and building appurtenant thereto along with the development costs has been classified as non-current assets held for sale.

8. The figures for the quarter ended 31 March 2020 and corresponding quarter ended in the previous year as reported in these standalone financial results are the balancing figures between standalone audited figures in respect of the full financial year and the published year to date figures upto the end of the third quarter of the relevant financial year. Also, the figures up to the end of the third quarter had only been reviewed and not subjected to audit.

9. In March 2020, the World Health Organisation declared COVID-19 to be a pandemic and several restrictions have been imposed by the Governments across the globe on the travel, goods movement and transportation considering public health and safety measures. Considering the Company’s/ Group’s products are classified as an ‘essential commodity’, management believes that the impact of the pandemic may not be significant. As of today, production facilities remain operational, following enhanced internal safety guidelines. The Company/ Group has considered internal and external information while assessing recoverability of its assets disclosed in the financial statement upto the date of approval of these financial results by the Board of Directors. Based on such assessment and considering the current economic indicators, the Company expects to recover the carrying amount of these assets. Management has also considered the impact of COVID-19 on the business for the foreseeable future and have concluded that the Company has sufficient resources to continue as a going concern. The impact of the global health pandemic may be different from that estimated as at the date of approval of these financial results and the Company will continue to closely monitor any material changes to future economic conditions.

10. The Board of Directors in its meeting held on 30 May 2020 have proposed the final dividend for the financial year 2019-20 of Rs 0.60 per equity share and the same will be paid after approval of the shareholders in the Annual General Meeting of the Company.
By Order of the Board of Directors

M. M. Kabra
Wholetime Director