Home  »  Company  »  Abbott India Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Abbott India Ltd.

Mar 31, 2015

1. COMPANY INFORMATION

Abbott India Limited (''The Company'') is a public limited company domiciled in India and is listed and traded on the Bombay Stock Exchange and also traded on the National Stock Exchange. The Company is one of the leading multinational pharmaceutical companies in India and operates with an owned manufacturing facility in Goa and various independent contracts / third party manufacturers based across the country. The Company sells its products through independent distributors primarily within India.

2. DISCLOSURE UNDER ACCOUNTING STANDARD - 15 EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under :

a) Defined Contribution Plans

i) Provident Fund / Employees'' Pension Fund

ii) Superannuation Fund

iii) Employees'' Deposit Linked Insurance Scheme

iv) Group Life Insurance Cover

b) Defined Benefit Plans

i) Gratuity : (Included as part of Contribution to Provident and Other Funds in Note 27 - Employee Benefits Expense)

Gratuity is payable to all eligible employees of the Company on retirement, death, permanent disablement and resignation in terms of the provision of the Payment of Gratuity Act 1972, or Company''s scheme whichever is more beneficial. Benefits would be paid at the time of the separation based on the respective schemes.

ii) Post Retirement Medical Benefits (PRMB) : (Included as part of Staff Welfare Expenses in Note 27 - Employee Benefits Expense)

Under this scheme, select group of senior employees and their spouses are covered for hospitalisation benefits after the employee has retired from the Company. The cover is available to these beneficiaries until they are alive. The Company has procured a group hospitalisation cover from an insurance company for providing these benefits to these beneficiaries.

The insurance premium payable in respect of each of the beneficiaries covered under this scheme is directly paid by the Company to the insurer. The insurance cover and premium varies from one beneficiary to another.

c) Other Long Term Defined Benefit Plans :

i) Compensated Absences (CA) : (Included as part of Salaries and Wages in Note 27 - Employee Benefits Expense)

Compensated benefit is payable to all the eligible employees of the Company on retirement, death, permanent disablement and resignation on the leave balance as per the Company Rules. Benefits would be paid at the time of separation based on last drawn base salary, variable dearness allowance and fixed dearness allowance.

ii) Long Service Benefits (LSB) : (Included as part of Salaries and Wages in Note 27 - Employee Benefits Expense)

Under this scheme, long service benefits accrue to the employees, while in service and is payable upon completion of stipulated service with the Company.

3. DISCLOSURES RELATING TO SHARE BASED COMPENSATION

A) International Stock Ownership Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Affiliate Employee Stock Purchase Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of Abbott Laboratories, USA. Every employee who opts for the scheme contributes, by way of payroll deductions, up to 10% of his cash remuneration towards purchase of shares on a monthly basis over the purchase cycle of 6 months.

The maximum that an employee can contribute to the plan is USD 12,500 per purchase cycle or USD 25,000 per calendar year. At the end of the cycle, accumulated payroll deductions are used to purchase shares at a discounted price. The purchase price of the share is 85% of the lesser of Fair Market Value either on the first or last day of the purchase cycle. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA and are purchased on behalf of the employees at market price less discount, allocated to participants as of last day of the purchase cycle. The concession in the price of the shares is entirely borne by Abbott Laboratories, USA.

In view of the above, no stock compensation expenses are incurred by the Company. During the year ended March 31, 2015, 14,656 shares (March 2014 : 10,782 shares) were purchased by employees at weighted average fair value of US $ 32.99 (March 2014 : US $ 30.07) per share.

B) Employees Stock Options Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Incentive Stock Option Program" whereby specified employees of its subsidiaries covered by the plan are granted an option to purchase shares of Abbott Laboratories, USA at a fixed price (grant price), which shall be at least 100% of the Fair Market Value of the common share for a fixed period of time. Accordingly, no options compensation expenses are incurred by the Company during the period. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA. The Grants issued are vested in one third installments over a three year period and have a 10 years contractual life.

(C) Employees Restricted Stock Options Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA as part of the "Long Term Incentive Program" has offered Restricted Stock Units to specified employees of its subsidiaries, whereby the employees covered by the plan are granted units. The units when vested, become shares of Abbott Laboratories, USA at a Nil Cost. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA. The Grants issued are vested in one third installments over a three year period. No options compensation expenses have been incurred by the Company during the period.

4. CONTINGENT LIABILITIES

i) Claims against the Company not acknowledged as Debts :

a) In February 1996, the Government had made a tentative claim for a sum of Rs. 11,11.66 Lakhs to be paid into the Drugs Prices Equalisation Account (DPEA) on account of unintended benefit allegedly enjoyed by the Company during the period May 1, 1981 to August 25, 1987. This was contested by the Company and subsequently during the year ended November 30, 2005, a final demand was received for Rs. 3,46.64 Lakhs (including interest of Rs. 1,90.39 Lakhs upto March 31, 2004). The Company, being aggrieved of the said demand and based on legal advice obtained in this regard, contested the above final demand of Rs. 3,46.64 Lakhs and filed a Writ Petition before the Bombay High Court to restrain the Government from recovering the said amount. The Bombay High Court has admitted the Writ Petition and granted stay of the recovery of the amount of Rs. 3,46.64 Lakhs subject to the Company furnishing a Bank Guarantee in respect of the principal amount of Rs. 1,56.25 Lakhs. The said Bank Guarantee has been furnished. The Company however, out of abundant caution and based on its understanding of the facts and circumstances of the case provided for a sum of Rs. 1,00.09 Lakhs (March 2014 : Rs. 96.18 Lakhs) including interest liability till date.

As At As At March 31, March 31, 2015 2014

b) Sales Tax, Service Tax and Custom Duty demands under appeals 9,30.70 9,68.09

c) Reimbursements claimed by Third Party - 47.84

d) Bank Guarantees in respect of Sales Tax demand 2,49.33 2,40.96

ii) Capital Commitments :

Estimated amount of contracts remaining to be executed on capital account and not 6,83.46 1,67.81 provided (Net of advances)

5. SEGMENT REPORTING

In accordance with the principles given in Accounting Standard on Segment Reporting (AS 17) notified by Companies (Accounting Standards) Rules, 2006, the Company has one reportable business segment i.e "Pharmaceuticals". The Company has no other reportable segment. Further, significant business of the Company is within India hence there is no Geographical segment.

6. RELATED PARTY DISCLOSURE

A) Parties where control exists :

Ultimate Holding Company : Abbott Laboratories, USA Holding Company : Abbott Capital India Ltd., U.K.

7. The Company has Bank Overdraft arrangement secured by hypothecation of all stocks and book debts.

8. Previous period''s figures have been regrouped / reclassified to confirm to the current year''s classification.

The figures of the previous period were audited by a firm of Chartered Accountants other than S R B C & CO LLP.


Mar 31, 2014

1. COMPANY INFORMATION

Abbott India Limited (''The Company'') is a public limited company domiciled in India and is listed and traded on the Bombay Stock Exchange and also traded on the National Stock Exchange. The Company is one of the leading multinational pharmaceutical companies in India and operates with an owned manufacturing facility in Goa and various independent contract/ third party manufacturers based across the country. The Company sells its products through independent distributors primarily within India.

3. With effect from the current fnancial year, the Company has changed its accounting year from year ended December 31 to year ended March 31. Accordingly, these fnancial statements are prepared for a period of 15 months from January 1, 2013 to March 31, 2014. Hence, the fgures and Earnings per share for the current accounting period are not comparable with those of the previous accounting year.

2] Defined Benefit Plans

a. Gratuity : (Included as part of Contribution to Provident and other Funds in Note 27 - Employee benefits Expense)

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provision of the Payment of Gratuity Act 1972, or Company''s Scheme whichever is more Beneficial. benefits would be paid at the time of the separation based on the respective Schemes.

b. Post Retirement Medical Benefits (PRMB) : (Included as part of Staff welfare Expenses in Note 27 - Employee benefits Expense)

Under this scheme, select group of senior employees and their spouse are covered for hospitalization benefits after the employee has retired from the Company. The cover is available to these beneficiaries until they are alive. The Company has procured a group hospitalization cover from an insurance company for providing these benefits to these beneficiaries.

The insurance premium payable in respect of each of the beneficiaries covered under this scheme is directly paid by the Company to the insurer. The insurance cover and premium varies from one beneficiary to another.

c. Compensated Absences (CA) : (Included as part of Salaries and Wages in Note 27 - Employee benefits Expense) Compensated benefits is payable to all the eligible employees of the Company on superannuation, death, permanent disablement and resignation on the leave balance as per the Company Rules. benefits would be paid at the time of separation based on last drawn base salary, variable dearness allowance and fixed dearness allowance.

d. Long Service Benefits (LSB) : (Included as part of Salaries and Wages in Note 27 - Employee benefits Expense)

Under this scheme, long service benefits accrue to the employees, while in service and is payable upon completion of stipulated service with the Company.

29. DISCLOSURES RELATING TO SHARE BASED COMPENSATION

(A) International Stock Ownership Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Affliate Employee Stock Purchase Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of Abbott Laboratories, USA. Every employee who opts for the scheme contributes, by way of payroll deductions, up to 10% of his cash remuneration towards purchase of shares on a monthly basis over the purchase cycle of 6 months.

The maximum that an employee can contribute to the plan is USD 12,500 per purchase cycle or USD 25,000 per calendar year. At the end of the cycle, accumulated payroll deductions are used to purchase shares at a discounted price. The purchase price of the share is 85% of the lesser of Fair Market Value either on the frst or last day of the purchase cycle. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA and are purchased on behalf of the employees at market price less discount, allocated to participants as of last day of the purchase cycle. The concession in the price of the shares is entirely borne by Abbott Laboratories, USA. In view of the above, no stock compensation expenses are incurred by the Company. During the period January 1, 2013 to March 31, 2014, 10,782 shares (2012 : 4,922 shares) were purchased by employees at weighted average fair value of US $ 30.07 (2012 : US $ 50.01) per share.

(B) Employees Stock Options Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Incentive Stock Option Program" whereby specified employees of its subsidiaries covered by the plan are granted an option to purchase shares of Abbott Laboratories, USA at a fixed price (grant price),which shall be at least 100% of the Fair Market Value of the common share for a fixed period of time. Accordingly, no options compensation expenses are incurred by the Company during the period. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA. The Grants issued are vested in one third installments over a three year period and have a 10 years contractual life.

3. CONTINGENT LIABILITIES

(i) Claims against the Company not acknowledged as Debts :

a. In February 1996, the Government had made a tentative claim for a sum of Rs. 11,11.66 Lakhs to be paid into the Drugs Prices Equalisation Account (DPEA) on account of unintended benefit allegedly enjoyed by the Company during the period May 1, 1981 to August 25, 1987. This was contested by the Company and subsequently during the year ended November 30, 2005, a final demand was received for Rs. 3,46.64 Lakhs (including interest of Rs. 1,90.39 Lakhs upto March 31, 2004). The Company, being aggrieved of the said demand and based on legal advice obtained in this regard, contested the above final demand of Rs. 3,46.64 Lakhs and fled a Writ Petition before the Bombay High Court to restrain the Government from recovering the said amount. The Bombay High Court has admitted the Writ Petition and granted stay of the recovery of the amount of Rs. 3,46.64 Lakhs subject to the Company furnishing a Bank Guarantee in respect of the principal amount of Rs. 1,56.25 Lakhs. The said Bank Guarantee has been furnished. The Company however, out of abundant caution and based on its understanding of the facts and circumstances of the

4. SEGMENT REPORTING

The Company operates in one reportable business segment i.e "Pharmaceuticals" and one reportable geographical segment i.e. "Within India". Hence, no separate information for segment wise disclosure is applicable.

5. RELATED PARTY DISCLOSURE

A. Parties where control exists :

Ultimate Holding Company : Abbott Laboratories, USA Holding Company : Abbott Capital India Ltd., U.K.

B. Other related parties : (1) Fellow Subsidiaries :

Abbott Logistics BV, Netherlands

Abbott Laboratories Intl. Co., USA

Abbott Healthcare Private Limited, India

Abbott Truecare Pharma Private Limited, India

Abbott International LLC, USA

Abbvie Italy, Italy (Upto December 31, 2012)

Abbott Laboratories (Singapore) Pte Ltd., Singapore

Abbott Scandinavia AB

Abbott Laboratories S.A., DAFZ (Dubai Airport Free Zone), Dubai

Abbott Laboratories S.A., Spain

Abbvie Inc, USA (Upto December 31, 2012)

Abbott Healthcare Products B V, Netherlands

Abbvie Logistics BV, Netherlands (Upto December 31, 2012)

Abbott Laboratories S.A., USA

Abbott Laboratories Trading (Shanghai) Co. Ltd., China

Abbott Products Operations AG., Switzerland

Abbott Products GmbH., Germany

Abbott Laboratories, Philippines

Abbott Products SAS, France

British Colloids Ltd., U.K.

Abbvie PTE Ltd., Singapore (Upto December 31, 2012)

Abbott Healthcare Products Ltd., U.K.

Abbott Laboratories S.A., Ukraine

(2) Key Management Personnel :

(i) Mr Rehan A. Khan – Managing Director (with effect from May 15, 2012)

(ii) Mr K. M. Marfatia – Director

(iii) Mr V. Mohan – Managing Director (till May 14, 2012)


Dec 31, 2012

1. COMPANY INFORMATION

Abbott India Limited (The Company'') is a public limited company domiciled in India and is listed and traded on the Bombay Stock Exchange and also traded on the National Stock Exchange. The Company is one of the leading multinational pharmaceutical companies in India and operates with an owned manufacturing facility in Goa and various independent contract/ third party manufacturers based across the country. The Company sells its products through independent distributors primarily within India.

2. (a) During the previous year, the Scheme of Amalgamation (''Scheme'') of Solvay Pharma India Limited (hereinafter referred to as "Solvay Pharma") with the Company was sanctioned by the Hon''ble High Court of Bombay vide its Order dated July 15, 2011. A copy of the said order was filed with the Registrar of Companies on August 10, 2011 ("The Effective Date").

(b) The swap ratio for the merger was 2:3 i.e. every two shares of Solvay Pharma entitled their holder to three shares of Abbott India Limited. The fractional entitlement of shares (equivalent to 497 shares) have been paid in cash with reference to the price prevailing on the Date of Allotment.

(c) Under the Scheme, the amalgamation took place effective January 1, 2011 (The Appointed Date''). Accordingly, the "Statement of Profit and Loss for the year ended December 31, 2011" includes the results of Solvay Pharma.

(d) The amalgamation was accounted under the "pooling of interests" method as prescribed by Accounting Standard 14 (AS 14) "Accounting for Amalgamations". Accordingly, the assets, liabilities and other reserves of Solvay Pharma as at December 31, 2010 were taken over at their book values after adjusting the reserves for the financial effect of conflicting accounting policies between the Company and Solvay Pharma, additional share capital allotted by the Company (over the share capital of Solvay Pharma) and cash for fractional shares payable by the Company.

3. The financial statements for the year ended December 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI of the Companies Act, 1956, the financial statements for the year ended December 31, 2012 are prepared as per Revised Schedule VI of the Companies Act, 1956. Accordingly, the previous year figures have also been regrouped/ reclassified to conform to the current year''s classification.

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at December 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined I to the extent such parties have been identified on the basis of information available with the Company.

With effect from January 1, 2012, the Company has retrospectively changed its method of providing depreciation on fixed assets from written down value (WDV) method to straight line method (SLM). As a result, an amount of Rs. 29,08.40 Lakhs, arising from the retrospective change in the method of providing depreciation till December 31, 2011, has been written back as an exceptional item in the Statement of Profit and Loss for the year ended December 31, 2012.

Further, with effect from January 1, 2012, the Company has revised the estimated useful life of its assets, on account of which the depreciation charge for the year is higher by Rs. 6,83.88 Lakhs.

4. DISCLOSURE UNDER ACCOUNTING STANDARD -15 ''EMPLOYEE BENEFITS'':

The Company has classified the various benefits provided to employees as under:

1] Defined Contribution Plans

a. Provident Fund/ Employees'' Pension Fund

b. Superannuation Fund

c. Employees'' Deposit Linked Insurance Scheme

d. Group Life Insurance Cover

2] Defined Benefit Plans

a. Gratuity

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provision of the Payment of Gratuity Act 1972, or Company''s Scheme whichever is more beneficial. Benefits would be paid at the time of the separation based on the respective Schemes

b. Post Retirement Medical Benefits (PRMB)

Under this scheme, select group of senior employees and their spouse are covered for hospitalisation benefit after the employee has retired from the Company. The cover is available to these beneficiaries until they are alive. The Company has procured a group hospitalisation cover from an insurance company for providing these benefits to these beneficiaries. The insurance premium payable in respect of each of the beneficiaries covered under this scheme is directly paid by the Company to the insurer. The insurance cover and premium varies from one beneficiary to another.

c. Compensated Absences (CA)

Compensated benefits is payable to all the eligible employees of the Company on superannuation, death, permanent disablement and resignation on the leave balance as per the Company Rules. Benefits would be paid at the time of separation based on last drawn base salary, variable dearness allowance and fixed dearness allowance.

d. Long Service Benefits (LSB)

Under this scheme, long service benefit accrues to the employees, while in service and is payable upon completion of stipulated service with the Company.

(E) Category of Plan Assets

The Company''s Plan Assets in respect of Gratuity are funded through the Group Schemes of the Life Insurance Corporation of India.

5. DISCLOSURES RELATING TO SHARE BASED COMPENSATION :

(A) International Stock Ownership Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Affiliate Employee Stock Purchase Plan" (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of Abbott Laboratories, USA. Every employee who opts for the scheme contributes, by way of payroll deductions, up to 10% of his cash remuneration (i.e. basic salary for Officers and basic salary & dearness allowance for Staff category) towards purchase of shares on a monthly basis over the purchase cycle of 6 months.

The maximum that an employee can contribute to the plan is USD 12,500 per purchase cycle or USD 25,000 per calendar year. At the end of the cycle, accumulated payroll deductions are used to purchase shares at a discounted price. The purchase price of the share is 85% of the lesser of Fair Market Value either on the first or last day of the purchase cycle. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA and are purchased on behalf of the employees at market price less discount, allocated to participants as of last day of the purchase cycle. The concession in the price of the shares is entirely borne by Abbott Laboratories, USA.

In view of the above, no stock compensation expenses are incurred by the Company. During the year ended December 31, 2012, 4,922 shares (2011 : 425 shares) were purchased by employees at weighted average fair value of US $ 50.01 (2011 : US $ 38.42) per share.

(B) Employees Stock Options Plan (Stocks of Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Incentive Stock Option Program" whereby specified employees of its subsidiaries covered by the plan are granted an option to purchase shares of Abbott Laboratories, USA at a fixed price (grant price),which shall be at least 100% of the Fair Market Value of the common share for a fixed period of time. Accordingly, no options compensation expenses are incurred by the Company during the year. The shares of Abbott Laboratories, USA are listed with the New York Stock Exchange, USA. The Grants issued are vested in one third installments over a three year period and have a 10 years contractual life.

6. CONTINGENT LIABILITIES :

(i) Claims against the Company not acknowledged as Debts :

a. In February 1996, the Government had made a tentative claim for a sum of Rs. 11,11.66 Lakhs to be paid into the Drugs Prices Equalisation Account (DPEA) on account of unintended benefit allegedly enjoyed by the Company during the period May 1,1981 to August 25,1987. This was contested by the Company and subsequently during the year ended November 30, 2005, a final demand was received for Rs. 3,46.64 Lakhs (including interest of Rs. 1,90.39 Lakhs upto March 31, 2004).The Company, being aggrieved of the said demand and based on legal advice obtained in this regard, contested the above final demand of Rs. 3,46.64 Lakhs and filed a Writ Petition before the Bombay High Court to restrain the Government from recovering the said amount. The Bombay High Court has admitted the Writ Petition and granted stay of the recovery of the amount of Rs. 3,46.64 Lakhs subject to the Company furnishing a Bank Guarantee in respect of the principal amount of Rs. 1,56.25 Lakhs. The said Bank Guarantee has been furnished. The Company

7. SEGMENT REPORTING :

The Company operates in one reportable business segment i.e. "Pharmaceuticals" and one reportable geographical segment i.e. "Within India". Hence, no separate information for segment wise disclosure is applicable.

8. RELATED PARTY DISCLOSURE :

A. Parties where control exists :

Ultimate Holding Company : Abbott Laboratories, USA Holding Company : Abbott Capital India Limited, U.K.

9. The Company has Bank Overdraft arrangement secured by hypothecation of all stocks and book debts.


Nov 30, 2009

1. Contingent Liabilities :

(a) In February 1996, the Government had made a tentative claim for a sum of Rs 11,11.66 Lakhs to be paid into the Drugs Prices Equalisation Account (DPEA) on account of unintended benefit allegedly enjoyed by the Company during the period May 1, 1981 to August 25, 1987. This was contested by the Company and subsequently during the year ended November 30, 2005, a final demand was received for Rs 3,46.64 Lakhs (including interest of Rs 1,90.39 Lakhs upto March 31, 2004).The Company, being aggrieved of the said demand and based on legal advice obtained in this regard, contested the above final demand of Rs 3,46.64 Lakhs and filed a Writ Petition before the Bombay High Court to restrain the Government from recovering the said amount. The Bombay High Court has admitted the Writ Petition and granted stay of the recovery of the amount of Rs 3,46.64 Lakhs subject to the Company furnishing a Bank Guarantee in respect of the principal amount of Rs 1,56.25 Lakhs.

The said Bank Guarantee has been furnished. The Company however, out of abundant caution and based on its understanding of the facts and circumstances of the case provided for a sum of Rs 79.29 Lakhs (2008 : Rs 75.39 Lakhs) including interest liability till date.

Year ended Year ended November 30, 2009 November 30, 2008 Rupees in Lakhs Rupees in Lakhs

(b) Claims against the Company, not acknowledged as debts in respect of :

(i) Excise on free samples on account of change in valuation method - 8.34

(ii) Income Tax demand under appeals on account of advertisement expenditure.................... 2,23.18 2,23.18

(iii) Sales Tax disallowances on account of disputed set off.. 9.16 -

(iv) Reimbursement claimed by third party............. 47.84 -

(c) Estimated amount of Contracts remaining to be executed on capital account and not provided for (net of advances)....................... 87.91 1,17.90

(d) In respect of the guarantees issued by the banks............. 2,56.65 1,11.55

2. Disclosure for Operating leases :

(a) The Company has obtained various residential/office premises (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms.

(b) Lease payments are recognised in the Profit and Loss Account under "Rent" in Schedule 14 - Manufacturing, Administrative and Selling Expenses.

3. Excise duty deducted from turnover represents amount of excise duty collected by the Company on sale of goods manufactured by the Company. Excise duty of Rs 44.04 lakhs (Debit) (2008 : Rs 30.95 lakhs - credit) included in Miscellaneous Expenses under Schedule 14 - Manufacturing, Administrative and Selling Expenses represents mainly the difference in amount of excise duty on closing stock and opening stock of finished goods and excise duty paid on the goods distributed as medical samples.

4. Consequent to the sale of the undertaking at Jejuri, Maharashtra, as a going concern in 2002, the eligibility certificate under the package scheme of incentives notified under Maharashtra Governments Resolution Number IDL-1088/(6603) IND-8, dated 30.09.1988 stood transferred to the purchaser as per order passed by Office of the Joint Director of Industries dated February 11, 2004. As the Sales Tax deferral benefit was being utilised by the Company, the Company had agreed to repay these amounts on the respective due dates to the purchaser. During the year, the Company has repaid the balance outstanding amount.

5. The Company operates in one reportable business segment i.e. "Pharmaceuticals" and one reportable geographical segment i.e. "Within India". Hence, no separate information for segment wise disclosure is applicable.

6. Related Party Disclosure :

(a) Parties where control exists :

Ultimate Holding Company - Abbott Laboratories, USA

Holding Company - Abbott Capital India Limited, UK

(b) Other related parties with whom transactions have taken place during the year:

(i) Fellow subsidiaries :

- Abbott Logistics BV, Netherlands

- Abbott GmbH & Co. KG, Germany

- Abbott Laboratories (Singapore) Pte Ltd., Singapore

- Abbott Laboratories Intl. Co., USA

- Abbott Equity Holdings Ltd., England

- Abbott Australasia Pty. Ltd., Australia

- Abbott Healthcare Pvt. Ltd., India

- Abbott Laboratories, Chicago IL

- Abbott Korea Ltd., Korea

- Abbott S. A., Belgium

- Abbott South Africa (Pty) Ltd., South Africa

- Abbott S.A., China

- Abbott Laboratories Ltd., UK

(ii) Key Management personnel :

Mr V Mohan - Managing Director

Mr R Sonalker - Director - Finance

Mr S Vasudevan (w.e.f. February 02, 2009) - Director - Marketing

Mr A Bhatt - Regional Human Resource Director

Mr U D Chiniwala - Director - Risk & Financial Controlling

Mr K M Marfatia - Director - Legal & Secretarial

Mr L N Neti - Director - Supply Chain

Dr Z Madan (upto November 30, 2009) - Director - Medical

Mr V M Nagesh - Head - Quality

Mr Arun Khedkar (upto February 28, 2009) - Director - Business Development

Mr S Jain (upto November 30, 2008) - Director - Marketing

Mr R Vohra (upto March 31, 2008) - Head - Strategy & Business Development

(iii) Relatives of Key Management Personnel :

Mrs V Jain - Wife of Mr S Jain

7. Employee Benefits :

The Accounting Standard-15 Employee Benefits as notified in the Companies (Accounting Standards) Rules 2006, has been adopted by the Company.

The Company has classified the various benefits provided to employees as under:

I. Defined Contribution Plans

(a) Provident Fund/Employees Pension Fund

(b) Superannuation Fund

(c) Employees Deposit Linked Insurance Scheme

(d) Group Life Insurance Cover

II. Defined Benefit Plans

(a) Contribution to Gratuity Fund

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provisions of The Payment of Gratuity Act, 1972 or Companys Scheme whichever is more beneficial. Benefits would be paid at the time of the separation based on the respective Schemes.

(b) Provision for Post Retirement Medical Benefits (PRMB)

Under this scheme, select group of senior employees and their spouse are covered for hospitalization benefit after the employee has retired from the Company. The cover is available to these beneficiaries until they are alive. The Company has procured a group hospitalization cover from an insurance company for providing these benefits to these beneficiaries. The insurance premium payable in respect of each of the beneficiary covered under this scheme is directly paid by the Company to the insurer. The insurance cover and premium varies from one beneficiary to another.

(c) Provision for Compensated Absences (CA)

Compensated benefits is payable to all the eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provision of the leave balance as per the Company Rules. Benefits would be paid at the time of separation based on last drawn base salary, variable dearness allowance and fixed dearness allowance.

(d) Provision for Long Service Benefits (LSB)

Under this scheme, long service benefit accrues to the employee, while he is in service and is payable to him upon completion of stipulated service with the Company.

(E) Category of Plan Assets

The Companys Plan Assets in respect of Gratuity are funded through the Group Schemes of the Life Insurance Corporation of India.

j. Leave Availment Pattern

5% (2008 : 5%) of the leave balance as at the valuation date and each subsequent year following the valuation date will be availed by the employee. The balance leave is assumed to be available for encashment on separation from the Company.

k. The estimates of future salary increases, considered in the actuarial valuation, is primarily based on account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

8. (a) International Stock Ownership Plan (Stocks of the Abbott Laboratories, USA)

Abbott Laboratories, USA has an "Affiliate Employee Stock Purchase Plan" (employee share purchase plan) whereby all permanent eligible employees of the Company have been given a right to purchase shares of the Company i.e. Abbott Laboratories, USA. Every employee who opts for the scheme contributes, by way of payroll deductions, up to 10% of his cash remuneration (i.e. basic salary for Officers and basic salary & dearness allowance for Staff category) towards purchase of shares on a monthly basis over the purchase cycle of 6 months.

The maximum that an individual can contribute to the plan is US$ 12,500 per purchase cycle or US$ 25,000 per calendar year. At the end of the cycle, accumulated payroll deductions are used to purchase shares at a discounted price. The purchase price of the share is 85% of the lesser of Fair Market Value either on the first or last day of the purchase cycle. The shares of Abbott Laboratories, USA are listed with the Securities Exchange Commission of USA and are purchased on behalf of the employees at market price less discount, allocated to participants as of on last day of the purchase cycle. The concession in the price of the shares is entirely borne by Abbott Laboratories, USA.

In view of the above, no stock compensation expenses are incurred by the Company. During the year ended November 30, 2009, 287 (2008: 406) shares were purchased by employees at weighted average fair value of $ 42.06 (2008 : $ 45.47) per share.

9. The Company has Bank Overdraft arrangement secured by hypothecation of all stocks and book debts.

10. Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 :

(a) An amount of Rs 66.98 Lakhs (2008 : Rs 19.04 Lakhs) and Rs Nil (2008 : Rs Nil) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year other than interest under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Schedule 10 - "Current Liabilities and Provisions" regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

11. In respect of the amounts as mentioned under Section 205C of the Companies Act, 1956, no dues are required to be credited to the Investor Education and Protection Fund as on November 30, 2009.

12. The revenue expenditure on Research and Development is Rs 5,93.57 Lakhs (2008 : Rs 4,48.15 Lakhs).

13. Disclosure as per Accounting Standards (AS-29) for provisions is as under:

The Company, based on prevailing trade practices, makes provision for the cost of replacement of its date expired and damaged products upon return of such products, subject to certain terms and conditions. It is made based on the best estimates of the management taking into consideration the type of products sold, the likely returns and the costs required to be incurred for such replacements.

14. The figures of the previous year are regrouped/rearranged wherever considered necessary.

 
Subscribe now to get personal finance updates in your inbox!