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Ahlcon Parenterals (India) Ltd. Notes to Accounts, Ahlcon Parenterals (India) Ltd. Company
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Notes to Accounts of Ahlcon Parenterals (India) Ltd.

Mar 31, 2015

1 Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.

NOTE 2 CAPITAL COMMITMENTS

Capital contracts remaining to be executed (net of advances) and not provided for Rs. 3,03,92,003/- (previous year Rs. 1,390,207,014/-)

NOTE 3 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

NOTE 4 – LEASE

The company has taken various residential, office premises and other assets under operating lease agreements These are generally not non-cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreement. There are no subleases.

NOTE 5 SEGMENT REPORTING:

1. Business Segment: In the opinion of the management, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standered 17 'Segment Reporting' , prescribed by the companies (Accounting Standards) Rules, 2006.

2. Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.

Information about Reportable Segment:

c. The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, Separate figurers for fixed assets / addition to fixed assets cannot be furnished.

Note 6:

During the financial year 2013-14, the company had started expansion of capacity at its existing plant in Bhiwadi, Rajasthan. The expenditure incurred on start-up and commissioning of the project along with certain revenue expenses attributable to assets under construction have been capitalised as an indirect element of the construction cost during the current year. The trial run carried out successfully during the year, and the plant was commissioned and the assets are ready to use.

Expenditure attributable to assets pending capitalisation:

The Company has incurred certain revenue expenses attributable to assets under construction, which are capitalised along with the cost of fixed assets.

The details of such expenditure incurred are given below:

NOTE : 7

In compliance to the accounting standard - 29 on "provisions, contingent liabilities and contingent assets" issued by the institute of chartered accountants of india, contingent liabilities and provisions has been disclosed as below:

NOTE: 8 DELISTING STATUS OF COMPANY

The board of directors , on November, 29, 2013, December, 26, 2013 and shareholders of the Company on February, 10, 2014 (Special Resolution passed through postal ballot ) have approved the delisting of equity shares of the company from the stock exchanges on which the equity shares of the company are presently listed i.e BSE Limited ("BSE"), Delhi Stock Exchange Limited ("DSE"), the Calcutta Stock Exchange Limited ("CSE"), and Jaipur Stock Exchange Limited ("JSE") (collectively "Stock Exchanges") in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, and the company has completed delisting process and obtained final approval from the stock exchanges.

NOTE: 9 CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013 and rule made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The Committee has adopted a Corporate Social Responsibility Policy. As per Section 135 (5) of the Act, the Company needs to ensure at least 2% of the average net profit of preceding three financial years is spent on CSR activities as mentioned in CSR Policy. The average result of preceding three financial years (2011-12, 2012-13 and 2013-14) was Rs. 189,367,581/- and the CSR obligations was Rs. 3751981/- (P.Y. Rs. Nil). However the Company has not spent any amount on CSR during the current year.

NOTE 10 MINIMUM ALTERNATE TAX (MAT)

In the options of convincing evidence credit for Minimum Alternate Tax (MAT) paid during the year has not been recognised.

NOTE 11 ADVANCE FROM CUSTOMERS

The management believes that advance from customers received prior to 31st march, 2014 is in the normal course of its business and outstanding for more than a year as on the balance sheet date should not be considered as deposits in term of the provision of the companies act.

NOTE: 12

Previous year figures have been regrouped and/or rearranged wherever considered necessary.


Mar 31, 2014

Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.

NOTE 1

I. Term loans

a) From Punjab & Sind Bank are secured by way of first and exclusive charge on the specific machinary purchased against the terms loans and on other fixed assets including hypothecation and mortgage on land & building of the company as well as on all the current assets of the company. The term loans bears floating interest at the rate, base rate plus 2.75% p.a. The loans are repayable in quarterly installments of Rs. 28,23,375/- and Rs. 78,75,000/- respectively along with interest.

b) From ''Mizuho Bank Ltd'', unsecured term loan on the specific expansion project of the company, sanctioned to the tune of Rs. 1,000,000,000 bearing interest at the rate, base rate plus 1.25% p.a. The entire loan is repayable after five years from the date of agreement Dated 19th December 2013

II. Vehicle loan is secured by hypothecation of specific vehicle acquired out of proceeds of the loan and carries interest at the rate 10.24% p.a.

III. Working capital loan

a) Working Capital facility from Punjab & Sind Bank is secured by way of first exclusive hypothication charge on entire current assets (both present & future) including stock of raw materials, finished goods, work in progress, stors & spares etc and assignment of entire book debts of the Company and further secured by way of equitable mortgage of industrial land & building of the company at its Bhiwadi works, Rajasthan.

b) The Working Capital facility from Punjab & Sind Bank is repayable on demand and carries interest at base rate plus 2.75% p.a.

c) Unsecured Short Term facility for Rs. 40,00,00,000/- from Deutsche Bank is received under ''Master Arrangement Letter of Credit Facilities'' dated 1st December 2010 between B. Braun Melsungen AG and Deutsche Bank AG, Mumbai supported by B. Braun Melsungen AG as Security party and Demand Promissory Note for INR Rs. 40,00,00,000/-.

d) The Short Term Credit facility from Deutsche Bank is repayable on demand and carries interest at base rate plus 2.00% p.a.

e) Buyers Credit facility for raw materials is availed from Deutsche Bank and carries interest not exceeding 15 bppa over applicable usd libor.

NOTE 2 - CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: -

SL. PARTICULARS CURRENT YEAR NO. (Rs.)

a Excise duty pending hearing of appeals / writ petitions. Cenvat credit on photocopy of the invoice disallowed - Penalty Cenvat credit on photocopy of the invoice disallowed - Reversal of modvat on material distroyed -

Demand on excise duty on physician Samples 1,667,708

b Service Tax pending hearing of appeals / writ petitions.

i Penalty and interest on Service tax on import of services 906,021 906,021

ii Service Tax on Transport Services paid from Cenvat Register 226,378

iii Irreguler cenvat credit on outward freight 179, 002

c. Value Added Tax - declaration forms pending submission 233,788

d Worker reinstatement pending befor assistant commissionar labour law Alwar. 1,500,000

e Bank Guarantees 16,080,275

f Claims against the Company not acknoledged as debts -

g Duty exemption availed on import of machinery under EPCG Scheme -

SL. PARTICULARS PREVIOUS YEAR NO. (Rs.)

a Excise duty pending hearing of appeals / writ petitions. Cenvat credit on photocopy of the invoice disallowed 619,875 Penalty Cenvat credit on photocopy of the invoice disallowed 619,875 Reversal of modvat on material distroyed 104,170

Demand on excise duty on physician Samples 1,667,708

b Service Tax pending hearing of appeals / writ petitions.

i Penalty and interest on Service tax on import of services 906,021

ii Service Tax on Transport Services paid from Cenvat Register -

iii Irreguler cenvat credit on outward freight 179,002

c. Value Added Tax - declaration forms pending submission 310,561

d Worker reinstatement pending befor assistant commissionar labour law Alwar. 1,500,000

e Bank Guarantees 31,934,078

f Claims against the Company not acknoledged as debts 41,577

g Duty exemption availed on import of machinery under EPCG Scheme 3,167,874

h National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F.No. 21 (807)07/DW IV /NPPA dated 03/09/2008; subsequent letters dated 24/11/2008, 01/05/2009, 08/11/2010, 06/02/2012 and in continuation letter dated 05/04/2013 have raised a demand of Rs. 6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to Rs. 6,64,13,209/-(previous year Rs. 6,64,13,209/-) thereby aggregating to Rs. 12,66,06,100/-(Previous year Rs. 12,66,06,100/-) Based on favourable decisions in similar cases discussions with the solicitors etc, the Company believes that there are fair chance of decisions in its favour in respect of all the items listed in (a) to (d) and (h) above and hence no provision is considered necessary against the same.

NOTE 3 - GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

NOTE 4 SEGMENT REPORTING:

1 Business Segment: In the opinion of the management, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standard 17 ''Segment Reporting'' , prescribed by the companies (Accounting Standards) Rules, 2006.

2 Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.


Mar 31, 2013

1. Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics/Ear drops.

NOTE 2 – GRATUITY AND OTHER POST–EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

NOTE 3 – LEASE

The Company has taken various residential and office premises under operating lease agreements. These are generally not non–cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictioins imposed by Lease Agreement. There are no subleases.

Note 4 Segment Reporting:

1 Business Segment: In the openion of the managemnt, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standered 17 ''Segment Reporting'' , prescribed by the companies (Accounting Standards) Rules, 2006.

2 Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and and exports as different geographical segments.

Note 5 – Revenue includes Rs 57,99,907/– representing goods in transit on CIF basis.

Note 6 – Previous year figures have been regrouped and/or rearranged wherever considered necessary.


Mar 31, 2012

1 Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.

a) Terms / rights / preferences and restrictions attached to the each class of shares

(i) Terms / rights attached to Equity Shares

The Company has fully paid up equity shares having a par value of Rs. 10/- per share. Each holder of equity share is entiteled to one vote per share. The company declares and pays dividend in Indian rupee.

During the year ended March 31, 2012, the amount of final dividend for 2010 -11 distributed to equity shareholders was Rs. 1.50 per share (previous year Rs. 1.50 per share for 2009-10). Further during the year Interim dividend for 2011-12 was also ditributed to equity share holder at Rs. 1.00 per share.

In the event of liquidation of the Company, the holders of equity shares will be entiteled to receive remaining assets of the company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Terms / rights attached to Preference Shares

The Company has fully paid up 6% Redeemable cumulative preference shares having a par value of Rs. 10/- per share. Each holder of redeemable preference shares entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to redeemable preference shares. The Company declares and pays preference dividend in Indian rupee.

The preference shares are non-convertible and non - participatory and are redeemable at par by way of a put and call options at any time after a period of two years from the date of their allotment i.e. 28.10.2006 by giving one month prior notice either by the Company or by preference shareholders.

During the year ended March 31, 2012, neither company nor preference shareholders have excercised the call / put option.

a) Term loans from Punjab & Sind Bank are secured by way of first and exclusive charge on the specific machinary purchased against the terms loans and on other fixed assets including hypothecation and mortgage on land & building of the company as well as on all the current assets of the company. The said loans is further secured by the personel guarantee of the Chairman and two promoter directors in their individual capacity. The term loans bears floating interest at the rate, base rate plus 2.75% p.a. The loans are repayable in quarterly installments of Rs. 28.23 lacs and Rs. 78.75 lacs respectively along with interest.

b) Vehicle loan is secured by hypothecation of specific vehicle acquired out of proceeds of the loan and carries interest at the rate 8-75% p-a-

Note

(i) Working Capital facility from Punjab & Sind Bank is secured by way of first exclusive hypothication charge on entire current assets (both present & future) including stock of raw materials, finished goods, work in progress, stores & spares etc and assignment of entire book debts of the Company and further secured by way of equitable mortgage of industrial land & building of the company at its Bhiwadi works, Rajasthan, and the personal guarantee of the Chairman and two promoter directors in their individual capacity-

(ii) The Working Capital facility from Punjab & Sind Bank is repayable on demand and carries interest at base rate plus 2-75% p-a-

Excise duty on sales amounting to Rs. 6,92,35,747/- (previous year Rs. 5,30,44,901/-) has been reduced from sales in statement of profit & loss.

Excise duty differential of Rs. 92,113/- on increase in stock in the current year and of Rs. 2,05,562/- on increase in stock in the previous year, has been shown under the manufacturing expense in note 24.

NOTE 1 - CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: -

a Excise duty pending hearing of appeals / writ petitions.

i Cenvat credit availed on raw material utilised on prorata basis 2,275,764 3,990,947

ii Cenvat credit diallowed on inputs - 454,797

iii Other Miscellaneous Cases - 170,586

b. Service Tax

i Reversal of cenvat credit availed on input services 113,189 113,189

ii Demand on import of services 1,922,384 1,922,384

c. Value Added Tax

i Declaration forms pending submission 1,767,512 1,218,974

d Letter of credit for import of raw material 15,209,233 31,972,760

e Bank guarantees 5,949,655 4,536,264

f Duty exemption availed on import of machinery under EPCG Scheme 8,982,469 22,619,163

Based on favourable decisions in similar cases legal opinion taken by the Company, discussions with the solicitors etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (d) above and hence no provision is considered necessary against the same.

i. National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F.No. 21 (807)07/DW IV /NPPA dated 03/09/2008; subsequent letters dated 24/11/2008, 01/05/2009, 08/11/2010 and in continuation letter dated 06/02/2012 have raised a demand of Rs. 6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to Rs. 5,59,00,067/- (previous year Rs. 4,45,95,347/-) thereby aggregating to Rs. 11,60,92,958/- (Previous year Rs. 10,47,88,238/-)

ii. Capital Commitments :- Capital contracts remaining to be executed (net of advances) and not provided for Rs. 1,19,09,039/- (previous year Rs. 52,96,373/-)

NOTE 2 - GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Note: Wholetime Director is covered under the Company's gratuity scheme along with the other employees of the Company. The gratuity liability is determined for all the employees on overall basis by an independent actuarial valuation- The specific amount of gratuity for whole time directors cannot be ascertained separately and accordingly the same has not been included in the above note.

NOTE 3 - LEASE

The Company has taken various residential and office premises under operating lease agreements- These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement. There are no subleases.

NOTE 4 - RELATED PARTY DISCLOSURES

a. List of Related Parties (As ascertained by the management)

1 Enterprises under Common Control Ahluwalia Contracts (India) Ltd.

Ahluwalia Builders Development Group (P) Ltd- Tidal Securities Pvt. Ltd.

Capricon Industrials Ltd- Ahlcons India (P) Ltd.

Ahlcon Ready Mix Concrete Pvt. Ltd.

Dipesh Mining Pvt. Ltd.

Jiwanjyoti Traders Pvt. Ltd.

Paramount Dealcomm Pvt. Ltd.

Prem Sagar Merchants Pvt. Ltd.

Splendor Distributors Pvt. Ltd.

Enterprises over which key managerial personal is able to exercise significant influence.

Shantidevi Progressive Educational Society Karamchand Ahluwalia Charitable Hospital

2 Individuals owning, directly or indirectly a substantial Interest in the voting power of the Company

Mrs. Sudarshan Walia Director

(Also relative of Key Management Personnel)

3 Key Management Personnel

Mr. Bikramjit Ahluwalia Chairman

Dr. Rohini Ahluwalia Vice Chairperson & Whole Time Director (also relative of Key management personnel)

4 Relative of the key management personnel with whom the transactions have taken place during the year Mrs.

Mukta Ahluwalia Daughter of Chairman

5 Non-Executive Directors Mrs. Sudarshan Walia Mr. Arun Kumar Gupta Dr. S.S. Arora

Prof. G.P. Talwar Dr. S.C.L Gupta Mr. S.K. Sachdeva

NOTE 5 - SEGMENT REPORTING:

1. Business Segment: In the opinion of the managemnt, there is only one reportable segment i.e. manufacturing of pharmaceuticals products, as envisaged by Accounting Standard 17 'Segment Reporting', prescribed by the companies (Accounting Standards) Rules, 2006.

2. Geographical Segment: The Company sells its products to various customers within the country and also exports to other countries. Considering size and proportion of exports to local sales, the Company considers sales made with in the country and exports as different geographical segments.

Information about secondary business Segments:

Rest of the current assets are common and not segregateable, geographical segment wise.

c. The Company has common fixed assets for producing goods for domestic market and Overseas Market. Hence, Separate figurers for fixed assets / addition to fixed assets cannot be furnished.

NOTE 6

The promoters of the company viz., Ahluwalia family group, vide letter dated 22nd March, 2012 informed the company that they have executed an agreement to sell their shareholding of equity shares of Rs. 10 each held by them in the company to B. Braun Singapore Pte. Ltd. (Acquirer). The transfer of aforesaid shares will take place after receiving the necessary approvals by the Acquirer- The Acquirer is an unlisted company incorporated under the laws of Singapore.

NOTE 7

Till the year ended 31st March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for the preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI has been notified under the companies Act, 1956, which has become applicable to the Company. Accordingly in veiw of the same, the Company has reclassified previous year figures to confirm to this year classification


Mar 31, 2011

1 NATURE OF OPERATIONS

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.

2 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: -

sl Particulars current Previous no year (Rs.) year (Rs.)

a Excise duty pending hearing of appeals / writ petitions.

i Cenvat credit availed on raw material utilised on prorata basis 3,990,947 22,067,968

ii Cenvat credit diallowed on inputs 454,797 390,658

iii Other Miscellaneous Cases 170,586 170,586

iv Show cause notice demanding excise duty on exempted goods - 33,846,670

b. Service Tax

i Reversal of cenvat credit availed on input services 113,189 760,416

ii Demand on foreign based services 1,922,384 976,021

c. Value Added Tax

i Declaration forms pending submission 1,218,974 4,740,990

ii Value Added Tax Demand - 10,863

d. Income Tax

i demand raised during Assessment Year 2005-06 - 88,334

ii demand raised during Assessment Year 2006-07 - 165,707

e Letter of credit for import of raw material 31,972,760 -

f Letter of credit for import of Capital Equuipment - 88,062,000

g Bank guarantees 4,536,264 135,000

h Duty examption availed on import of machinery under EPCG Scheme 22,619,163 -

Based on favourable decisions in similar cases legal opinion taken by the Company, discussions with the solicitors etc, the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (d) above and hence no provision is considered necessary against the same.

ii. National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F.No. 21 (807) 07/DW IV/ NPPA dated 03/09/2008; subsequent letter dated 24/11/2008 and dated 01/05/2009 and in continuation letter dated 08/11/2010 have raised a demand of Rs.6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to Rs.4,45,95,347/- (previous year Rs.4,00,76,757/-) thereby aggregating to Rs.10,47,88,238/- (Previous year Rs.10,02,69,648/-)

iii. Capital commitments :- Capital contracts remaining to be executed (net of advances) and not provided for Rs.5296373.00, (previous year Rs.13,30,26,438.00).

3. In terms of Accounting standerd 10 issued by the Institute of Chartered Accountants of India and the opinion of Expert Advisory Committee the company has, during the year charged to Profit and Loss Account by debiting to stores consumed account, the value of spares of Rs. NIL (previous year Rs.1,620,478/-) in respect of plant and machinary which has already been fully depreciated i.e. its useful life has already been over.

4 secured lOans

a. Working capital facility / Term loans from Punjab & Sind Bank are secured by way of first and exclusive charge on all the current assets of the company and the specific machinery purchased against the term loans and on other Fixed Assets including hypothecation and mortgage on land & building of the company, both existing and future. The said loan is further secured by the personal guarantee of the chairman and two directors in their personal capacity.

b. Term loans (vehicles) are secured by hypothecation of specified assets.

c. Secured Term loan repayment due in the next 12 months Rs.4,33,29,358 (Previous year Rs.1,17,84,806).

5 The 6% Redeemable Cumulative Preference Shares redeemable during the year on excercising option by the Company / shareholders have not been redeemed as none has excercised the option during the year.

6 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/ termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

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

7 In the opinion of the Management and to the best of their knowledge and belief, the value of current assets, loans and advances if realized in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

8 a. Excise duty on sales amounting to Rs.5,30,44,901/- (previous year Rs.4,64,35,868/-) has ben reduced from sales in Profit & Loss Account.

b. Excise duty differential of Rs.2,05,562/- on increase in stock in the current year and of Rs.2,29,040 /- on decrease in stock in the previous year, has been shown under the manufacturing expense in Schedue 16.

9 lease

The Company has taken various residential and office premises under operating lease agreements. These are generally not non-cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictioins imposed by Lease Agreement. There are no subleases.

10 RELATED PARTY DISCLOSURES

a. List of Related Parties (As ascertained by the management)

1 Enterprises under common control

Ahluwalia Contracts (India) Ltd.

Ahluwalia Builders Development Group (P) Ltd.

Tidal Securities Pvt. Ltd.

Capricon Industrials Ltd.

Ahlcons India (P) Ltd.

Ahlcon Ready Mix Concrete Pvt. Ltd.

Dipesh Mining Pvt Ltd.

Jiwanjyoti Traders Pvt Ltd.

Paramount Dealcomm Pvt, Ltd.

Prem Sagar Merchants Pvt Ltd.

Splendor Distributors Pvt. Ltd.

Enterprises over which key managerial personal is able

to exercise significant influence.

Shantidevi Progressive Educational Society

Karamchand Ahluwalia Charitable Hospital

2 Individuals owning, directly or indirectly a substantial Interest in the voting power of the Company

Mrs. Sudarshan Walia Director

(Also relative of Key Management Personnel)

3 Key Management Personnel

Mr. Bikramjit Ahluwalia Chairman

Dr. Rohini Ahluwalia Vice Chairperson & Whole

Time Director (also relative of Key management personnel)

4 Relative of the key management personnel with whom the transactions have taken place during the year

Mrs. Mukta Ahluwalia Daughter of Chairman

5 Non Executive Directors

Mrs. Sudarshan Walia Mr. Arun Kumar Gupta Dr.. S.S.Arora Prof. G.P.Talwar Dr. S.C.L Gupta Mr. S K. Sachdeva

11 Additional information required under Part II of Schedule VI of the Companies Act, 1956 (To the extent applicable to the Company and as certified by the Management).

12 Previous year figures have been regrouped and / or rearranged wherever considered necessary.


Mar 31, 2010

1 Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics / Ear drops.

2 Contingent Liabilities not provided for in respect of:-

Sl. No. Particulars Current Year Previous Year Rs. Rs.

a) Excise duty pending hearing of appeals / writ petitions.

i) Cenvat credit availed on raw material utilised on prorata basis 22,067,968 8,471,820

ii) Cenvat credit diallowed on inputs 390,658 390,658

iii) Other Miscellaneous Cases 170,586 170,586

iv) Show cause notice demanding excise duty on exempted goods 33,846,670 -

b) Service Tax

i) Reversal of cenvat credit availed on input services 760,416 760,416

ii) Demand on foreign based services 976,021 976,021

c) Value Added Tax

i) Declaration forms pending submission 4,740,990 78,345

ii) Value Added Tax demand 10,863 175,080

d) Income Tax

i) demand raised during Assessment Year2001-02 - 226,864

ii) demand raised during Assessment ] Year 2003-04 - 104,936

iii) demand raised during Assessment Year 2005-06 88,334 88,334

iv) demand raised during Assessment Year 2006-07 165,707 426,141

e) Letter of credit for import of raw material - 4,819,550

f) Letter of credit for import of Capital Equuipment 88,062,000 -

g) Bank guarantees 135,000 8,433,955

Based on favourable decisions in similar cases legal opinion taken by the Company, discussions with the solicitors etc, the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (d) above and hence no provision is considered necessary against the same.

i National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F.No. 21 (807) 07/DW IV/ NPPA dated 03/09/2008; subsequent letter dated 24/11/2008 and in continuation letter dated 01/05/2009 have raised a demand of Rs.6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to Rs.4,00,76,757/- (previous year Rs. 3,10,47,824/-) thereby aggregating to Rs.10,02,69,648/- (Previous year Rs. 9,12,40,715/-)

iii Capital commitments:- Capital contracts remaining to be executed (net of advances) and not provided for Rs. 13,30,26,438.00, (previous year Rs. Nil).

4 In terms of Accounting Standard-10 issued by The Institute of Chartered Accountants of India and the opinion of the Expert Advisory Committee the company has, during the year charged to the Profit & Loss Account by debiting to stores consumed account, the value of spares of Rs.16,20,478/- in respect of plant & machinery which has already been fully depreciated i.e

its useful life has already been over. These spares have been carried in the inventory from previous years and are now shown in inventory at zero value.

3 The company has advanced a sum of Rs. 35,95,182/- in foreign currency towards registration of its products in various countries in earlier years. This amount has been wirtten off in the absence of any confirmation from registering authorities about the final outcome of our application. The same has been charged under the head prior period adjustment.

4 A sum of Rs.25,00,000/- towards purchase / installation of ERP System in the company to M/s MGRM Infotech Solutions Pvt Ltd was written off during F.Y 2008-09 as non-recoverable due to incomplete status of the job and non submission of bills thereof. However in the current year the ERP system has been installed and implemented as such the amount written off has been recalled and adjusted as intangible assets. The amount recalled has been credited to profit and loss account under the head prior period adjustment.

5 Secured Loans

a) Working capital facility / Term loans from Punjab & Sind Bank are secured by way of first and exclusive charge on all the current assets of the company and the specific machinery purchased against the term loans and on other Fixed Assets including hypothecation and mortgage on land & building of the company, both existing and future. The said loan is further secured by the personal guarantee of the chairman and two directors in their personal capacity.

b) Term loans (vehicles) are secured by hypothecation of specified assets.

c) Secured Term loan repayment due in the next 12 months Rs.1,17,84,806/- (Previous year Rs. 1,12,93,500).

6 The 6% Redeemable Cumulative Preference Shares redeemable during the year on excercising option by the Company / shareholders have not been redeemed as none has excercised the option during the year.

7 Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

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

8 In the opinion of the Management and to the best of their knowledge and belief, the value of current assets, loans and advances if realized in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

The gratuity liability is determined for all the employees on overall basis by an independent actuarial valuation. The specific amount of gratuity for Whole Time Director cannot be ascertained separately and accordingly the same has not been included in the above note.

9 a) Excise duty on sales amounting to Rs 4,64,35,868/- (previous year Rs 6,06,49,888/-) has been reduced from sales in Profit & Loss Account.

b) Excise duty differential of Rs.2,29,040/- on decrease in stock in the current year and of Rs.4,14,359/- on increase in stock in the previous year, has been shown under the manufacturing expense in Schedue 17.

10 Lease

The Company has taken various residential and office premises under operating lease agreements. These are generally not non-cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement. There are no subleases.

11 Related Party disclosures

a. List of Related Parties (As ascertained by the management)

1 Enterprises under common control Ahluwalia Contracts (India) Ltd.

Ahluwalia Builders Development Group (P) Ltd.

Tidal Securities Pvt. Ltd.

Capricon Industrials Ltd.

Ahlcons India (P) Ltd.

Ahlcon Ready Mix Concrete Pvt. Ltd.

Dipesh Mining Pvt Ltd.

Jiwanjyoti Traders Pvt Ltd.

Paramount Dealcomm Pvt, Ltd.

Prem Sagar Merchants Pvt Ltd.

Splendor Distributors Pvt. Ltd.

Enterprises over which key managerial personal is able to exercise significant influence.

Shantidevi Progressive Educational Society

Karamchand Ahluwalia Charitable Hospital

2 Individuals owning, directly or indirectly a substantial Interest in the voting power of the Company

Mrs. Sudarshan Walia Director (Also relative of Key Management Personnel)

3 Key Management Personnel Mr. Bikramjit Ahluwalia Chairman

Dr. Rohini Ahluwalia Vice Chairperson&Whole Time Director (also relative of Key management personnel)

4 Relative of the key management personnel with whom the transactions have taken place during the year

Mrs. Mukta Ahluwalia Daughter of Chairman

5 Non Executive Directors

Mrs. Sudarshan Walia

Mr. Arun Kumar Gupta

Dr.. S.S.Arora

Prof. G.P.Talwar

Dr. S.C.L Gupta

Mr. S K. Sachdeva

12 Segment Reporting:

The Company is operating in one segment, i.e. Pharmaceuticals only, and hence the segment reporting as defined by AS 17 (Segmental Reporting), issued by ICAI. is not applicable.

13 Additional information required under Part II of Schedule VI of the Companies Act, 1956, (To the extent applicable to the Company and as certified by the Management).

14 Previous year figures have been regrouped and / or rearranged wherever considered necessary.


Mar 31, 2009

1. Nature of Operations

Ahlcon Parenterals (India) Limited is the manufacturer of Pharmaceutical Intravenous Fluids and Opthalmics /Ear drops.

2. Contingent Liabilities not provided for in respect of: -

Sl No Particulars Current Year Previous Year Rs. Rs.

a. Duty exemption availed on import of machinery under EPCG Scheme NIL 12,485,385

b. Disputed Income Tax Demand 801,275 6,019,139

c. Disputed Sales Tax Demand 175,080 194,534

d. Demand for non-submission of C-Forms 78,345 181,273

e. Disputed demand under Central Excise Act 10,769,501 1,810,781

f. Letter of Credit for import of raw material 4,819,550 11,467,044

g. Bank Guarantees 8,433,955 4,444,908

i. Based on discussions with the solicitors, the Company believes that there is a fair chance of decision in its favour in respect of all the items listed in (b) to (e) above and hence no provision is considered necessary by the Company.

ii. National Pharmaceutical Pricing Authority (NPPA) vide its orders, letter F.No. 21 (807) 07/DW IV/ NPPA dated 03/09/2008; subsequent letter dated 24/11/2008 and in continuation letter dated 01/05/2009 have raised a demand of Rs.6,01,92,891/- being excess amount charged from consumers of product Ciplox, over and above price as per norms under DPCO, 1995, manufactured by us on behalf of CIPLA Ltd., along with interest thereupon, amounting to Rs.3,10,47,824/- thereby aggregating to Rs.9,12,40,715/-.

3. The company has received representation from some of the suppliers confirming registration under "The Micro, Small & Medium Enterprises Development Act 2006", on the basis of confirmation received.

4. Secured Loans

a. Working capital facility / term loans from Syndicate Bank are secured by way of first and exclusive charge on all the current assets of the Company and the specific machinery purchased against the term loans and on other Fixed Assets including hypothecation and mortgage on land & building of the Company, both existing and future. The said loan is further secured by the personal guarantee of the chairman and two directors in their personal capacity.

b. Term loans (vehicles) are secured by hypothecation of specified assets.

c. Secured Term loan repayment due in the next 12 months Rs.1,12,93,500/- (Previous year Rs. 1,31,46,750).

5. The 6% Redeemable Cumulative Preference Shares redeemable during the year on exercising option by the Company / shareholders have not been redeemed as none has excercised the option during the year.

6. Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has been funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

7. The deferred payment liability which has been paid during the year in full represented balance liability on acquisition /construction of land & building from promoter Company M/s Ahluwalia Contracts (India) Limited.

8. In the opinion of the Management and to the best of their knowledge and belief, the value of current assets, loans and advances if realized in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

9. a. Excise duty on sales amounting to Rs 6,06,49,888/- (previous year Rs 14,70,93,716/-) has ben reduced from sales in Profit & Loss Account.

b Excise duty differential of Rs.4,14,359/- on decrease in stock in the current year and of Rs.15,07,115/- on increase in stock in the previous year, has been shown under the manufacturing expense in Schedue 17

10. a. Provision for current taxation of Rs. 103.50 lacs (Previous year Rs. 217.50 Lacs) represents Regular Tax Liability as per the provisions of the Income Tax Act, 1961.

11. Related Party disclosures

a. List of Related Parties (As ascertained by the management)

1 Enterprises under common control

Ahluwalia Contracts (India) Ltd.

Ahluwalia Builders Development Group (P) Ltd.

Tidal Securities Pvt. Ltd.

Capricon Industrials Ltd.

Ahlcons India (P) Ltd.

Ahlcon Public School

2 Individuals owning, directly or indirectly a substantial Interest in the voting power of the Company

Mrs. Sudarshan Walia Director

(Also relative of Key Management Personnel)

3 Key Management Personnel

Mr. Bikramjit Ahluwalia Chairman

Dr. Rohini Ahluwalia Vice Chairperson&Whole Time Director

4 Relative of the key management personnel with whom the transactions have taken place during the year Mrs. Mukta Ahluwalia DaughterofChairman

5 Non Executive Directors

Mrs. Sudarshan Walia Director

Mr. Arun Kumar Gupta Director

Dr. S.S.Arora Director

Prof. G.P.Talwar Director

Dr. S.C.L Gupta Director

Mr. D.N. Davar Director (Since resigned /relieved)

Mr. S.K. Sachdeva Director

12. Segment Reporting:

The Company is operating in one segment, i.e. Pharmaceuticals only, and hence the segment reporting as defined by AS 17 (Segmental Reporting), issued by ICAI. is not applicable.

13. Previous year figures have been regrouped and / or rearranged wherever considered necessary.

 
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