Notes to Accounts of Sotac Pharmaceuticals Ltd

Mar 31, 2025

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) Provisions

A provisions is recognized when the Company has a present obligation as a result of past event, if it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liability

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or a present obligation that arises from past events where it
is either not probable that an outflow of resources will be required to settle or a reliable estimate of the
amount cannot be made.

(ii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

O. SEGMENT REPORTING

In accordance with the Accounting Standard 17 "segment reporting" as prescribed under Companies
(Accounting Standard) Rules, 2006 (as amended ), as the company is covered under categories of SMC
companies, the said accounting standard is not applicable to it.

P. CASH & CASH EQUIVALENTS

Cash & cash equivalents comprise cash and cash on deposit with banks and corporations. The company
considers all highly liquid investments with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amount of cash to be cash equivalents.

Q. LEASES

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased
Asset, are classified as ''Operating Leases". Lease rentals with respect to assets taken on ''Operating Lease''
are charged to Statement of Profit and Loss on a straight line basis over the lease term.

Leases which effectively transfer to the Company substantially all the risks and benefits incidental to the
ownership of the leased item are classified as ''Finance Lease''. Assets acquired on Finance Lease which
substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the
Company at the lower of the fair value and the present value of the minimum lease payment and a liability
is created for an equivalent amount. Lease rentals payable is apportioned between the liability and finance
charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

R. GOVERNMENT GRANTS

Government grants / subsidies received towards specific fixed assets have been deducted from the gross
value of the concerned fixed assets and grant / subsidies received during the year towards revenue expenses
have been reduced from respective expenses.

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Mar 31, 2024

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) Provisions

A provisions is recognized when the Company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liability

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(ii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

P. SEGMENT REPORTING

In accordance with the Accounting Standard 17 "segment reporting" as prescribed under Companies (Accounting Standard) Rules, 2006 (as amended), as the company is covered under categories of SMC companies, the said accounting standard is not applicable to it.

Q. CASH & CASH EQUIVALENTS

Cash & cash equivalents comprise cash and cash on deposit with banks and corporations. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amount of cash to be cash equivalents.

R. LEASES

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased Asset, are classified as ''Operating Leases". Lease rentals with respect to assets taken on ''Operating Lease'' are charged to Statement of Profit and Loss on a straight line basis over the lease term.

Leases which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as ''Finance Lease''. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Lease rentals payable is apportioned between the liability and finance charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

S. GOVERNMENT GRANTS

Government grants / subsidies received towards specific fixed assets have been deducted from the gross value of the concerned fixed assets and grant / subsidies received during the year towards revenue expenses have been reduced from respective expenses.

31 Previous years'' figures are regrouped or rearranged or reclassified wherever necessary in order to confirm to the current years'' grouping and classifications.

32 Figures have been rounded off to the nearest rupee.

The Company has adopted accounting standard 15 on employee benefits as per Acturial Valution carried by an

33 independent actuary in the Books of Accounts of the Company and the Disclosure relating to the same which is envisaged under the standard are disclosed as under:

Gratuity:

For, Keyur Shah & Co. For, Sotac Pharmaceuticals Limited

F.R No: 141173W Chartered Accountants

SD/- SD/-

Sharad Patel Dineshkumar Gehlot

SD/- Managing Director Whole time Director

KeyurShah DIN:07252252 Din:07252132

Proprietor M No. : 153774

SD/- SD/-

Brijeshkumar Patel Niyati Parikh

Chief Financial Officer Company Secretary

M No. : F12289

Place: Ahmedabad Place: Ahmedabad

Date: 17th May ''24 Date: 17th May ''24

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Mar 31, 2023

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) Provisions

A provisions is recognized when the Company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liability

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(ii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

O. SEGMENT REPORTING

In accordance with the Accounting Standard 17 "segment reporting" as prescribed under Companies (Accounting Standard) Rules, 2006 (as amended ), as the company is covered under categories of SMC companies, the said accounting standard is not applicable to it.

P. CASH & CASH EQUIVALENTS

Cash & cash equivalents comprise cash and cash on deposit with banks and corporations. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amount of cash to be cash equivalents.

Q. LEASES

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased Asset, are classified as ''Operating Leases". Lease rentals with respect to assets taken on ''Operating Lease'' are charged to Statement of Profit and Loss on a straight line basis over the lease term.

Leases which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as ''Finance Lease''. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Lease rentals payable is apportioned between the liability and finance charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

R. GOVERNMENT GRANTS

Government grants / subsidies received towards specific fixed assets have been deducted from the gross value of the concerned fixed assets and grant / subsidies received during the year towards revenue expenses have been reduced from respective expenses.

A Current ratio (In times)

During the year, Company received money against the share allotement which is disclosed in the Cash and Cash Equivalents, on acount of that current assets increased in current year from previous year, since current ratios improved.

C Debt Service Coverage Ratio(in times)

In the FY 2022-23, Company earnings increased from previous year and also long term loans converted from one bank to other bank, on account of this debts service coverage ratios increased from 2.61 times to 7.99 times.

E Inventory Turnover Ratio ( In times)

Average inventory increased from Rs. 459.66 lakhs to Rs. 748.79 lakhs on account of this inventory turnover ratios decreased from 12.18 times to 5.35 times.

F Trade Receivables turnover ratio (In times)

Average receivables increased from Rs. 940.56 lakhs to Rs. 1201.88 lakhs on account of this trade receiavbles turnover ratios decreased from 7.78 times to 4.82 times.

G Trade payables turnover ratio (In times)

During the year, Credit purchase decreased as compared to previous year and also average payables increased as compared to previous year,on account of this Trade payables ratios decreased from 3.80 times to 2.33 times.

H Net capital turnover ratio (In times)

During the year, revanue from opeartion decreased as compared to previous year and also net working capital turn out to be positive due to net capital turnover ratios improved.

I Net profit ratio (in %)

During the year, profit increased as compared to previous year as company generated better profits on product on account of this net profit ratios improved.

J Return on Capital employed (in %)

During the year, Company taken more term loans as compared to previous year on account of this return on capital employed ratios decreased from 64.91 % to 37.68%.

Note - 30 - Additional regulatory information

A) The title deeds of immovable properties (other than properties where the Company is the lessee and the lease reements are duly executed in favour of the lessee) are held in the name of the Company.

B) The Company does not have any investment property.

C) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible assets.

D) There are no loans or advances in the nature of loans are granted to Promoters, Directors, KMPs and their related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are outstanding as on 31st March, 2023:

(i) repayable on demand; or

(ii) without specifying any terms or period of repayment

E) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder

F) The company is not declared willful defaulter by any bank or financial institution or other lender.

G) The company has not undertaken any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

H) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

I) The company has not advanced or loan or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the undrstanding (whether recorded in writing or otherwise) that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (Ultimate Beneficiaries) by or on behalf of the company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

J) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (Ultimate Beneficiaries) by or on behalf of the Funding Party or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

K) No transactions has been surrendered or disclosed as income during the year in the tax assessment under the Income Tax Act, 1961. There are no such previously unrecorded income or related assets

L) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

M) The Provision of Section 135 of the Companies Act 2013 in relation to Corporate Social Responsibility are applicable to the Company for the Financial year 2023-24 and Details of the required CSR Spending are as follows:

Note :-

* As per details available on the website of Income Tax Department, M/s. Sotac Pharmaceuticals Limited (hereinafter referred to as the "assessee") have been issued with a notice u/s. 143(1)(a) of Income Tax Act, 1961, proposing adjustments u/s. 143(1)(1)(a) of the Act for A.Y. 2022-23, and the same is pending for assessee''s response, amount related to the same is not quantifiable ** On the basis of available information received from the Management of the company it is pertinent to note that company has created professional tax liability in books of account on which GIDC association has gone for litigation with respect to not to pay professional tax liability against which in future it may be possible to pay interest and penalty in the professional tax liability if GIDC association fails to win the litigation. and as on date amount related to interest and penalty is not quantifiable.