PharmEasy Unlisted Shares Annual Reports

PharmEasy Unlisted Shares

API Holdings Limited Directors' Report Summary (Fiscal Year Ended March 31, 2024) * **Annual Report Presentation:** The directors present the 5th Annual Report, including audited financial statements (consolidated and standalone). * **Strategic Focus:** During the year, the company realigned focus to improve Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) by enhancing operational efficiencies and synergies. * **Key Initiatives:** * Sustainable Revenue Growth: Focusing on quality, consumer experience, and profitable customer segments amid capital constraints. 25 of 30 diagnostic labs are NABL accredited, providing to top 2% of all labs in India. PharmEasy saw a targeted approach to retain high lifetime revenue customers, increasing average order value by over 20%. * Capacity Utilization: Improved utilization of fulfillment and warehousing infrastructure through supply chain rationalization and integration. * Wallet Share Enhancement: Augmenting wallet share within existing chemist and hospital business via improved customer experience. * Margin Enhancement: Product mix optimization towards higher-margin products (private labels) and sales mix adjustment to prioritize comprehensive care opportunities (diagnostics services). * Cost Optimization: Workforce and expense rationalization through supply chain, back-office, technology headcount, and marketing expense reductions. * Cash Conservation: Working capital optimization via inventory management and improved collections. * **Fiscal Year Definition:** "Fiscal 2024" refers to the 12-month period ending March 31, 2024, with "Fiscal 2023" referencing the period ending March 31, 2023. * **Key Revenue Segments (Fiscal 2024):** * Sale of Products: INR 50,077.18 million. * Distribution to Retailer: INR 8,727.71 million (15.4% of consolidated revenues). Technology-powered platform selling pharmaceutical, OTC, surgical, consumables and private label products. * Distribution to Chemist/Institutions: INR 31,882.27 million (56.3% of consolidated revenues). Focus on profitable, sustainable growth via Retailio 1P, servicing 67K retailers. * Distribution to Hospital: INR 9,409.41 million (16.6% of consolidated revenues). Aknamed focused on profitable customers, wallet share, and portfolio expansion. * Sale of Services: INR 6,565.68 million. * Diagnostics: Thyrocare offers 900+ tests through 30 labs (25 NABL accredited). PharmEasy Labs recorded INR 1,164.76 million in revenues. * Other Services: Fulfilment, technology services, software for doctors/pharmacies, Retailio technology (INR 433.28 million). * **Key Milestones (Diagnostics):** * NABL accreditation increased from 15 to 25 labs. * 95% of samples processed in NABL-accredited labs. * 147 million tests conducted (4% year-on-year growth). * 22 million samples processed (8% year-on-year growth). * Active franchisee base exceeded 7,900 (doubled in three years). * **Financial Highlights Summary (Consolidated):** * Revenue from operations: Decreased 14.7% to INR 56,642.86 million. * Total Revenue: INR 57,589.41 million. * Total Expense: INR 72,547.98 million. * Loss before tax: (INR 25,219.70) million. * EBITDA before exceptional items and ESOP expense: improved to (7.5%). * **Commentary on Revenue Decrease:** Concentrated on higher margin customers, maximized warehouse utilization, and consolidated marketing efforts. Reduced marketing expenses to concentrate on high-value customers. Sales to Hospital decreased by focusing on service levels, better fulfillment and faster delivery. Sales to Chemists/Institutions dropped due to capital constraints, but subsequently resolved with fundraising. Diagnostics grew due to Thyrocare's improved performance, test additions, and franchise network expansion. Focus on high margin business and discontinued non-strategic business. * **ESOP and Exceptional Items:** * ESOP Expense: INR 2,218.52 million. Options granted in prior years are still valued at the fair market value existing at grant date, resulting in higher charge to profit and loss account. Options granted during the year have been valued at the lower fair market value in line with revised Company valuation. * Impairment in Value: INR 6,549.94 million toward impairment primarily related to retailer business. * Other Exceptional Items: Early redemption charges for NCDs (INR 3,424.94 million) and adjusted consideration charges paid towards Medlife acquisition (INR 295 million). Payments made in Q1 of FY 2024-25. * **Cash Flow:** Reduction in net cash outflow from operating activities to INR 611.34 million due to reduced operating losses and working capital optimization. Increase in cash due to rights issue proceeds (INR 20,000 million). * **Major Events During the Year:** * Mergers and Acquisitions: Proposed Composite Scheme of Arrangement and Scheme of Amalgamation were withdrawn due to the prevailing scenario and delay in/non-receipt of approvals. * Changes in Subsidiaries: Think Health Diagnostics Private Limited became a step-down subsidiary via acquisition. Increased share capital of Care Easy Health Tech Private Limited. Incorporated joint venture in the name of Thyrocare Laboratories (Tanzania) Limited. * **Changes in Share Capital:** Increased authorized share capital and alloted shares. * Increased authorized share capital to INR 35,000 million. * The Company issued Compulsorily Convertible Preference Shares Series B (“CCPS B") by way of rights issue for an aggregate amount upto INR 35,000 million. * 20,66,19,848 CCPS B allotted for INR 20,000.8 million. * Allotment of 2,46,922 (Two Lakh Forty Six Thousand Nine Hundred Twenty Two) equity shares pursuant to the conversion of 10,756 CCPS A. * Further, the Company had allotted an aggregate of 9,81,47,440 (Nine Crore Eighty One Lakh Forty Seven Thousand Four Hundred Forty) equity shares pursuant to the conversion of 49,07,372 CCPS B. * **Debentures:** Board approved issuance and allotment of unrated, unlisted, unsecured, redeemable, non-convertible debentures. * **Material Changes Affecting Financial Position (Subsequent to Fiscal Year End):** Allotment of 15,49,50,398 CCPS B, and 3,14,24,499 CCPS B via preferential issue. Acquisition of additional equity stakes in Aryan Wellness, Mahaveer Medi-Sales, and Aushad Pharma Distributors. Acquisition of Polo Labs diagnostic business by Thyrocare Technologies Limited. * **ROR Letters:** Vistra ITCL (India) Limited issued ROR Letters, intimation of failure to comply with covenants. * **Framework Agreement:** The Company and the Debenture Trustee entered into a framework agreement ("Framework Agreement”). * **Undertaking Rights Issue:** Company received approximately INR 35,000 million to comply with a fund raise condition, Rights Issue in September 2023. * **Post the end of the financial year, in accordance with the terms of the Framework Agreement, the Company redeemed** (i) Tranche 2 NCDs (INR 6,412.90 million); (ii) Tranche 4A NCDs (INR 6,600 million); (iii) Tranche 4B NCDs (INR 6,600 million), (iv) issued CCPS B amounting to INR 3041.89 million and (v) paid early redemption charges of amounting to INR 3,424.94. * **Directors and Key Personnel Changes:** Appointed Mr. Hardik Dedhia and Dr. Dhaval Shah, appointed Dr. Ranjan Pai, Mr. Shyam Powar and Mr. Dovaldas Buzinskas as additional Directors, Mr. Dharmil Sheth and Mr. Harsh Parekh tendered their resignations, Mr. Yartharth Bhargova was appointed as Chief Financial Officer and Mr. Rahul Guha was appointed as President Operations. * **Directors' Responsibility Statement:** Confirms adherence to accounting standards, fair representation of company affairs, and preparation on a going concern basis. * **Auditors:** Price Waterhouse Chartered Accountants LLP appointed as statutory auditors; HRU & Associates appointed as secretarial auditors. * **Risk Management:** Company has a Risk Management Policy for sustainable growth. * **Vigil Mechanism:** Company has a Whistle-blower Policy for reporting unethical practices. * **Internal Financial Control:** Adequate internal financial control is in place with no reportable material weakness. * **Loans, Investments, Guarantees:** Details provided in the standalone financial statements. * **Related Party Transactions:** Transactions with related parties are on arm's length basis, with disclosure of particulars. * **Dividend:** No dividend recommended due to losses. * **Deposits:** No public deposits accepted. * **Corporate Social Responsibility:** Company was ineligible to spend on CSR for the financial year 2023-24. * **Employee Stock Option Scheme:** Disclosures provided under rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014. * **Sexual Harassment:** No cases reported under the Sexual Harassment of Women at Workplace Act, 2013. * **Board Meetings:** 11 Board meetings held. * **Audit Committee:** 3 Audit Committee meetings held. * **Nomination and Remuneration Committee:** 3 Nomination and Remuneration Committee meetings held. * **Stakeholders' Relationship Committee:** No Stakeholders' Relationship Committee meeting held. * **Corporate Social Responsibility Committee:** No Corporate Social Responsibility Committee meeting held. * **Secretarial Standards:** Complied with applicable secretarial standards. * **Foreign Exchange Management Regulations:** Received certificate for compliance with downstream investment regulations. * **Annual Return:** Will be placed on Company website. * **Shifting of Registered office:** Shifted its registered office within the local limits of the Mumbai city. * **Energy conservation, technology absorption and foreign exchange:** Information on energy conservation, technology absorption, and foreign exchange earnings/outgo provided. * The company has installed 500 kWh solar power capacity plant at Bengaluru warehouse which generated 4,97,403 kWh of solar power during the financial year 2023-24, saving approx. INR 600 million+ in terms of electricity bill and also equivalent to mitigating approx. 4,10,000 kgs of carbon dioxide into the atmosphere; thus, contributing to towards the environment. * In the financial year 2023-24 the Company also installed another solar power plant at our warehouse at Bhandup having capacity of 300 kWh which generated 2,24,474 kWh of solar power which is equivalent to mitigating approx 1,85,000 kgs of carbon dioxide into the atmosphere and savings of approximately more than INR 400 million in electricity bill. * API Holdings is a technology-first organization. Technology led innovations are deployed to offer differentiated experience to our customers, build efficient supply chain, manage large scale health ecosystems (partners, stakeholders, marketplace etc.) and improve productivity across eco-system. * **General Disclosures:** No disclosure/reporting required regarding equity shares with differential rights, material orders impacting going concern, cost records maintenance, auditor-reported fraud, transfer to reserves, one-time settlements, transfer to Investor Education and Protection Fund, or proceedings under the Insolvency and Bankruptcy Code.

PharmEasy Unlisted Shares

Price Waterhouse Chartered Accountants LLP's independent auditor's report for API Holdings Limited's consolidated financial statements as of March 31, 2023, expresses an opinion that the statements provide a true and fair view in conformity with accounting principles generally accepted in India and as required by the Companies Act, 2013. **Opinion** Price Waterhouse audited the consolidated financial statements of API Holdings Limited ("Holding Company") and its subsidiaries ("the Group"), and its associate companies. The consolidated financial statements include the consolidated Balance Sheet as of March 31, 2023, the consolidated Statement of Profit and Loss (including Other Comprehensive Income), the consolidated Statement of Changes in Equity, the consolidated Statement of Cash Flow for the year then ended, and notes to the consolidated financial statements. The auditor's opinion is that the consolidated financial statements give the information required by the Companies Act, 2013, and present a true and fair view in conformity with accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its associate companies as of March 31, 2023, and of consolidated total comprehensive Income (comprising of loss and other comprehensive income), consolidated changes in equity and its consolidated cash flows for the year then ended. **Basis for Opinion** The audit was conducted in accordance with Standards on Auditing (SAs) specified under Section 143(10) of the Act. The auditors believe that the audit evidence obtained is sufficient and appropriate to provide a basis for their opinion. **Emphasis of Matter** Note 58 to the Consolidated Financial Statements is regarding the preparation of financial statements of Care Easy Health Tech Private Limited, a subsidiary, on a realisable value basis because the company has ceased business operations. The auditor’s opinion is not modified in respect of this matter. **Other Information** The Holding Company's Board of Directors is responsible for other information in the Director's report, excluding the consolidated financial statements and the auditor's report. The auditor's opinion does not cover this other information, and they do not express any form of assurance conclusion thereon. The auditor's responsibility is to read the other information and consider whether it is materially inconsistent with the consolidated financial statements or their knowledge obtained in the audit or otherwise appears to be materially misstated, and they have nothing to report in this regard. **Responsibilities of Management and Those Charged with Governance** The Holding Company's Board of Directors is responsible for the preparation and presentation of the consolidated financial statements that give a true and fair view of the consolidated financial position, financial performance, and cash flows of the Group, including its associate companies, and for the maintenance of adequate accounting records. Responsibilities include: maintenance of adequate accounting records, selection and application of appropriate accounting policies, making reasonable and prudent judgments and estimates, and designing, implementing, and maintaining adequate internal financial controls that operate effectively for accuracy and completeness of accounting records. They are also responsible for assessing the Group's ability to continue as a going concern. **Auditor's Responsibilities** Auditor objectives are to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement (fraud or error) and to issue an auditor's report including their opinion. They must exercise professional judgment, maintain skepticism, identify and assess risks of misstatement, design and perform audit procedures, obtain understanding of internal control relevant to the audit, evaluate appropriateness of accounting policies, conclude on management's use of the going concern basis, and evaluate overall presentation, structure, and content of the consolidated financial statements. Auditors are also responsible for expressing an opinion on whether the Holding company has adequate internal financial controls with reference to consolidated financial statements in place and the operating effectiveness of such controls, also. **Other Matters** The auditor did not audit the financial statements of 7 subsidiaries, which reflect total assets of Rs 16,705.33 million and net assets of Rs 7,480.53 million as at March 31, 2023, total revenue of Rs. 16,735.92 million, total comprehensive income of Rs 2,009.53 million and net cash flows amounting to Rs 277.95 million for the year ended on that date, as considered in the consolidated financial statements. The auditor also did not audit financial statements for three associates. The auditor's opinion on the consolidated financial statements is based solely on the reports of the other auditors for these entities. **Report on Other Legal and Regulatory Requirements** As required by paragraph 3(xxi) of the Companies (Auditor's Report) Order, 2020 (“CARO 2020”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, the auditors report the CARO 2020 comments from the other auditors on specific subsidiaries. The auditor is required to report, to the extent applicable, on the following matters: * Obtained all necessary information and explanations. * Proper books of account as required by law have been kept. * The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account and records maintained for the purpose of preparation of the consolidated financial statements. * The aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act. * None of the directors of the Group companies are disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act. * Internal financial controls with reference to consolidated financial statements of the Group and the operating effectiveness of such controls. * Impact of pending litigations on the consolidated financial position of the Group. * The Group were not required to recognise a provision as at March 31, 2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract and did not have any derivative contracts as at March 31, 2023. * There were no amounts which were required to be transferred to the Investor Education and Protection Fund. * No material funds have been advanced or loaned or invested by the Company or its subsidiaries/associates to any other person(s) or entity(ies), including foreign entities, with the understanding that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or any of such subsidiaries/associates or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries * The dividend declared during the year by the Holding Company, its subsidiary companies, and associate companies, is in compliance with Section 123 of the Act. * The reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable, given it applies from financial year beginning April 1, 2023. * The Group has paid/ provided for managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Act. **Report on the Internal Financial Controls** The audit opinion is that the Holding Company, its subsidiary companies, and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2023. However, this opinion is not modified in respect of this matter with respect to the auditor reliance on other auditor reports for seven subsidiary companies, and three associates companies, which are companies incorporated in India. The financial statements and accompanying notes are an integral part of this report. The report is signed by Nitin Khatri, Partner, with Membership Number 110282, in Mumbai on December 05, 2023. The Firm Registration Number is 012754N/N500016. The UDIN is 23110282BGYBDM1371.

PharmEasy Unlisted Shares

Consolidated financial statements for API Holdings Limited (formerly known as API Holdings Private Limited) include an independent auditor's report and financial statements as of March 31, 2022. **Independent Auditor's Report** The report expresses an opinion on the consolidated financial statements of API Holdings Limited and its subsidiaries and associate companies, stating that they give a true and fair view in conformity with accounting principles generally accepted in India and providing the information required by the Companies Act, 2013. The audit was conducted in accordance with Standards on Auditing (SAs). The report also includes sections on the responsibilities of management and auditors, other information, and other legal and regulatory requirements, including compliance with the Companies (Auditor’s Report) Order, 2020 (CARO 2020). The audit opinion is not modified with respect to reliance on reports of other auditors of subsidiaries and associate companies. The report states that the Holding Company, its subsidiaries and its associate companies have, in all material respects, an adequate internal financial controls system with reference to consolidated financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2022. **Consolidated Balance Sheet Highlights (as of March 31, 2022):** * **Total Assets:** Rs. 113,983.27 million * **Non-current Assets:** Rs. 88,961.22 million, including goodwill of Rs. 70,955.45 million and other intangible assets of Rs. 6,635.14 million. * **Current Assets:** Rs. 25,022.05 million, including inventories of Rs. 7,612.40 million, trade receivables of Rs. 8,608.50 million, and cash and cash equivalents of Rs. 1,543.97 million. * **Total Equity:** Rs. 70,224.81 million * Equity attributable to owners: Rs. 66,972.85 million * Non-controlling interests: Rs. 3,251.96 million * **Total Liabilities:** Rs. 43,758.46 million * **Non-current Liabilities:** Rs. 6,142.40 million, including borrowings of Rs. 1,000.69 million. * **Current Liabilities:** Rs. 37,616.06 million, including borrowings of Rs. 24,853.54 million and trade payables of Rs. 4,403.14 million. **Consolidated Statement of Profit and Loss Highlights (Year Ended March 31, 2022):** * **Total Income:** Rs. 57,810.02 million * **Revenue from Operations:** Rs. 57,288.21 million * **Other Income:** Rs. 521.81 million * **Total Expenses:** Rs. 84,915.90 million * **Cost of Materials Consumed:** Rs. 854.60 million * **Purchase of Stock-in-Trade:** Rs. 52,566.12 million * **Employee Benefits Expense:** Rs. 14,589.71 million * **Finance Costs:** Rs. 2,582.64 million * **Depreciation and Amortization Expense:** Rs. 1,587.85 million * **Other Expenses:** Rs. 15,025.51 million * **Loss Before Tax:** Rs. (39,707.70) million * **Total Tax Credit:** Rs. 210.70 million * **Loss After Tax:** Rs. (39,924.96) million * **Other Comprehensive Income/ (Loss):** Rs. 106.05 million * **Total Comprehensive Loss for the Year:** Rs. (39,818.91) million **Consolidated Statement of Changes in Equity (Year Ended March 31, 2022):** The statement provides details on changes in share capital, instruments entirely in the nature of equity, and other equity components such as securities premium, retained earnings, capital reserve, amalgamation deficit balance, employee stock option outstanding, equity component of compound financial instruments, money received against share warrants, and non-controlling interest. The total equity as of March 31, 2022, is Rs. 70,224.81 million. **Consolidated Statement of Cash Flows (Year Ended March 31, 2022):** * **Net Cash Flow Used in Operating Activities:** Rs. (25,893.69) million * **Net Cash Flow Used in Investing Activities:** Rs. (57,892.06) million * **Net Cash Flow From Financing Activities:** Rs. 83,053.68 million * **Net Decrease in Cash and Cash Equivalents:** Rs. (732.07) million * **Cash and Cash Equivalents at End of Year:** Rs. 1,568.76 million **Notes to Financial Statements:** *API Holdings Limited (API) is a public company primarily involved in diversified businesses like trading pharmaceutical and cosmetic goods, mobile applications, diagnostic services, teleconsulting and more. *Basis of Preparation and significant accounting policies including: *going concern and use of estimates and judgements; * consolidation; * segment reporting and more. *Details of property, plant and equipment; goodwill, intangible assets, investments, financial assets, trade receivables, cash and cash equivalents, provisions, current and non-current liabilities, equity, revenue, expenses, financial instruments, leases, employee benefits, taxation, business combinations, share-based payments, earnings per share, segment reporting, foreign currency translation and other significant items are explained in detail. *Acquisitions: * Thyrocare Technologies Limited, effective September 2, 2021, for a total consideration of Rs 48,952.92 million. *Akna Medical Private Limited, effective September 17, 2021, for a total consideration of Rs 11,650.93 million. * Medlife and other businesses including the Scheme of Amalgamation of several entities into API Holdings Limited in earlier periods. *Impairment testing was performed, resulting in impairment charges for distribution to chemists/institutions, IT operations and Diagnostics CGUs. *Additional details on ESOP plans, related party transactions and subsequent events are also noted. *The financial statements were authorized for issue on 13 September 2022.