Dishman Carbogen Amcis Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2024
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Mar 2024
Notes:
1. The Financial results (standalone and consolidated) have been reviewed by the Audit Committee and approved by the Board of Directors at their meetings held on 30th May, 2024.
2. These financial results (standalone and consolidated) have been prepared in compliance with Ind AS as notified by the Ministry of Corporate Affairs and prescribed under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting pronouncements generally accepted in India, to the extent applicable.
3. Statutory Auditors have carried out an audit of standalone as well as consolidated financial results of the Company for the year ended 31st March, 2024 and issued unmodified report thereon.
4. The figures for quarter ended 31st March, 2024 and for corresponding quarter ended 31st March, 2023 are the balancing figures between the audited figures in respect of the full financial year and the reviewed year-to-date figures up to the third quarter of the financial year.
5. The amalgamation held between Dishman Pharmaceuticals and Chemical Limited and Dishman Care Limited into Dishman Carbogen Amcis Limited accounted in the year 2016-17 under the “Purchase Method” as per the then prevailing Accounting Standard 14 – Accounting for Amalgamations, as referred to in the Scheme of Amalgamation approved by the Hon’ble High Court, Gujarat, which is different from Ind AS 103 “Business Combinations”. The excess of consideration payable over net assets acquired had been recorded as goodwill amounting to INR 1,326.86 crores, represented by underlying intangible assets acquired on amalgamation and was being amortized over the period of 15 years from the Appointed Date i.e. 1st January, 2015. During the previous year, Board of Directors had re-assessed the life of goodwill with the power confirmed by Honorable High Court through scheme, considering the benefits to be available to the company going forward, and accordingly had decided to amortize the carrying value of INR 685.58 crores over a revised life of 15 years starting from 1st April, 2022.
Had the goodwill not been amortized as required under Ind AS 103, the Depreciation and Amortization expense would have been lower by INR 11.36 crores, INR 11.49 crores and INR 11.27 Crores for quarter ended 31st March, 2024, 31st December, 2023 and 31th March, 2023, respectively and INR 45.71 crores and INR 45.71 crores for the year ended 31st March, 2024 and 31st March, 2023, respectively, and the Profit Before Tax for the corresponding periods would have been higher/lower by an equivalent amount.
6. The Company has opted to publish only consolidated financial results in the news paper. The stand-alone financial results are available for perusal on the Company’s website: www.imdcal.com as well as on the Stock Exchange’s websites i.e. on www.bseindia.com and www.nseindia.com.
7. Group is required to disclose segment information based on the ‘management approach’ as defined in Ind AS 108- Operating Segments, which is how the Chief Operating Decision Maker (CODM) evaluates the Group’s performance and allocates resources based on the analysis of the various performance indicators. CODM reviews the results of the Group engaged in the business of Contract Research and Manufacturing Services (CRAMS), quats, specialty chemicals, Vitamins D3 and its analogues, cholesterols, disinfectants etc. Accordingly, Group as a whole is a single segment. The information as required under Ind AS 108 is available directly from the financial statements, hence no separate disclosure has been made.
8. Consolidated financial results comprise the results of the parent Company, Dishman Carbogen Amcis Limited and its subsidiaries (together referred as “the Group”) viz. Dishman CARBOGEN AMCIS (Europe) Ltd., Dishman USA Inc., Dishman International Trading (Shanghai) Co. Ltd, CARBOGEN AMCIS Holdings AG., Switzerland; CARBOGEN AMCIS (Shanghai) Co. Ltd., Shanghai Yiqian International Trade Co. Ltd.; CARBOGEN AMCIS BV, Carbogen Amcis Ltd., U.K., CARBOGEN AMCIS AG (“CGAM AG”), Switzerland, CARBOGEN AMCIS SAS, Dishman Carbogen Amcis (Japan) Ltd., Dishman Carbogen Amcis (Singapore) Pte. Ltd.,; Dishman Biotech Ltd.; CARBOGEN AMICS Specialities AG.; CARBOGEN AMICS Innovations AG.; DISHMAN CARBOGEN AMCIS AG.; CARBOGEN AMCIS Real Estate, Dishman Medicare Limited (formerly known as Visible Investment Limited) and Dishman Carbogen AMCIS Technology AG.
9. Nami Trading FZ LLC registered with Ras Al Khaimah Economic Zone, UAE has been de-registered w.e.f. 17th May, 2024, which was dormant since long. The Company had invested in the said Company an amount of AED 15,000 (INR 4.00 lacs).
10. There was a joint inspection carried out during the quarter ending March, 2020 by the Swissmedic and European Directorate for the Quality of Medicines & HealthCare (EDQM), due to which there were certain audit observations issued deficient to EU GMP Part II and other relevant Annexes for the Company’s Bavla site. There was an impact on the production at the Company’s Bavla manufacturing site due to the observations received, which impacted the revenue and profitability of the Company’s operations at Bavla since March 2020 till now.
The Company’s Bavla site was jointly successfully inspected by the EDQM and Italian Medicines Agency (AIFA) from 18th September, 2023 to 20th September, 2023. The Company’s Bavla site was also successfully inspected by the Japanese PMDA from 31st July, 2023 to 3rd August, 2023. The final certificates of both the above successful inspections were received on 23rd January, 2024 and 2nd February, 2024 from Japanese PMDA authority and EDQM & AIFA authorities respectively.
The Company’s Bavla site was also inspected by US Food and Drug Administation (USFDA) during 4th March, 2024 to 7th March, 2024. On 8th May, 2024 the Company has received Establishment Inspection Report (EIR) from the US FDA indicating closure of the inspection.
11. The SaaS cost related to current IT project (D365), for the quarter ended 31st March, 2024, 31st December, 2023, 31st March, 2023, for the year ended 31st March, 2024 and for the year ended 31st March, 2023 amounts to INR 0.73 Crore, 1.46 Crores, INR 3.77 Crore, INR 9.18 Crores and INR 10.58 Crores respectively. These costs were directly expensed in the books of subsidiary companies and not capitalized due to the recently published IFRIC agenda decision (Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets)-Agenda Paper 2) which clarified the recognition criteria for such arrangements.
12. Other expenses for the previous quarter includes forex loss of INR 76.37 crores, majorly due to abnormal movement between USD/CHF resulting in mark to market notional loss on foreign currency bank account revaluation in one of the subsidiaries. The core Earnings before Interest, Tax and Depreciation and Amortisation and SaaS cost (EBITDA) for the previous quarter excluding the same is INR 118.94 crores.
13. Exceptional Items during the year:
a. During the quarter, one of the group subsidiary Cabogen AMCIS SAS, dispose of its certain assets lying at old facility being non-movable in nature amounting to INR 3.09 Crores. The same has been reported as exceptional item.
b. During the quarter ended September 2023, the Company discarded certain inventory, which was not expected to be usable for projects that the company estimated to undertake in near to mid-term. The loss on account of this impairment was Rs. 3.05 Crores.
14. During the year, the certain covenants related to the non-convertible debentures were breached as on 31st March, 2024. However, subsequent to the balance sheet date but prior to the date of the board meeting, the Company obtained revised covenant requirement, as requested, from the debenture holders and is in compliance with the same.
15. There is a breach in certain covenants related to its syndicate bank loans at the company’s subsidiary, CARBOGEN AMCIS HOLDING AG. Management is currently in negotiation with the lenders regarding the receipt of waiver for the breached covenants. The company has already received positive response from the lenders who have in-principally agreed for the waiver of covenants for the next 12 months, whilst certain other terms are being negotiated. Management is confident of receiving the formal waiver in due course of time. Till the time formal waiver is received, the Company’s subsidiary has classified the borrowing related to breach as a current liability, in accordance with the applicable accounting standards.
16. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits has received Presidential assent and has been published in the Gazette of India. However, the effective date of the Code and final rules for quantifying the financial impact are yet to be notified. The Group will assess the impact of the Code when relevant provisions are notified and will record related impact, if any, in the period the Code becomes effective.
17. The Company had issued senior, secured, rated, listed, redeemable, principal protected, market linked, non-convertible debentures of INR 50.00 crores (Indian Rupees Fifty Crores only) and has maintained security cover more than 1.10 times of the principal amount and interest amount as on 31st March, 2024 by creating first ranking exclusive charge on identified land parcel being Freehold Non Agricultural land belonging to the Dishman Infrastructure Limited. There was no interest or principal payment falling due during the quarter ended 31st March, 2024.
18. The previous quarter / year figures have been re-grouped, re-cast and re-arranged wherever considered necessary to make it comparable.
19. The Company is not a Large Corporate as per the applicability criteria given under the Chapter XII of SEBI Operational circular no. SEBI/HO/DDHS/P/CIR/ 2021/613 dated August 10, 2021 read with SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023.