Mar 31, 2018
1. CORPORATE AND GENERAL INFORMATION
Albert David Limited ("the Company") is a public limited company incorporated in 1938 and domiciled in India and has its listing on the BSE Limited and National Stock Exchange of India. The Company belongs to a renowned industrial house of Kolkata, the "Kothari Group". The registered office of the Company is situated in Kolkata. The Company''s principal business is manufacturing and trading of Pharmaceutical Formulations, Infusion Solutions, Herbal Dosage Forms, Bulk Drugs and Disposable Syringes & Needles.
2. BASIS OF PREPARATION & PRESENTATION OF FINANCIAL STATEMENT
2.1. Statement of Compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ("the Act"), read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended), other relevant provisions of the Act and other accounting principles generally accepted in India.
The financial statements for all periods up to and including the year ended 31st March, 2017, were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India, which includes the accounting standards prescribed under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 and other provisions of the Act (collectively referred to as "Indian GAAP"). These financial statements for the year ended 31st March, 2018 are the first Ind AS Financial Statements with comparatives, prepared under Ind AS. The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet at 1st April, 2016 throughout all periods presented, as if these policies had always been in effect and are covered by Ind AS 101 "First Time Adoption of Indian Accounting Standards"
An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note No. 47. Certain of the Company''s Ind-AS accounting policies used in the opening Balance Sheet differed from its Indian GAAP policies applied as at 31st March, 2016 and accordingly the adjustments were made to restate the opening balances as per Ind-AS. The resulting adjustment arising from events and transactions before the date of transition to Ind-AS were recognized directly through retained earnings as at 1st April, 2016 as required by Ind- AS 101. The financial statements of the Company for the year ended 31st March, 2018 has been approved by the Board of Directors in their meeting held on 29th May 2018.
2.2. Basis of Measurement
The Company maintains accounts on accrual basis following the historical cost convention, except for followings:
- Certain Financial Assets and Liabilities is measured at Fair value/ Amortised cost (refer accounting policy regarding financial instruments);
- Derivative Financial Instruments measured at fair value;
- Defined Benefit Plans - plan assets measured at fair value.
2.3. Functional and Reporting Currency
The Financial Statements are presented in Indian Rupee (INR), which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Schedule III, unless otherwise stated.
2.4. Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
2.5. Presentation of Financial Statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III (Revised) to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, and various stipulations of Ind AS or any other act are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).
2.6. Operating Cycle for current and non-current classification
All assets and liabilities have been classified as current or non-current depending on the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1.The Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
An asset is classified as current when it is:
- Expected to be realized or intended to sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All the other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current. Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities respectively.
2.7. Measurement of Fair Values
A number of the Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a whole:
- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2: Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3: Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets & liabilities. Involvement of external valuers is decided by the management of the company considering the requirements of Ind AS and selection criteria include market knowledge, reputation, independence and maintenance of professional standards.
11.2. Deferred Tax Assets and Deferred Tax Liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income tax levied by the same taxation authority.
15.1. Trade receivables are non-interest bearing and are generally on terms of 21 to 30 days.
15.2. No trade or other receivables are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.
15.3. Refer note no. 41 for information on trade receivables pledged as securities by the Company.
18.4 Reconciliation of the number of shares at the beginning and at the end of the year
There has been no change/ movements in number of shares outstanding at the beginning and at the end of the year.
18.5 Terms/ Rights attached to Equity Shares :
The Company has only one class of issued shares i.e. Ordinary Shares having par value of Rs. 10/- per share. Each holder of Ordinary Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the ordinary shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.
18.6 Shareholding Pattern with respect of Holding or Ultimate Holding Company
The Company does not have any Holding Company or Ultimate Holding Company.
18.8 No ordinary shares have been reserved for issue under options and contracts/ commitments for the sale of shares/ disinvestment as at the Balance Sheet date.
18.9 No Ordinary Shares have been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.
18.10 No securities convertible into Equity/ Preference shares have been issued by the Company during the year.
18.11 No calls are unpaid by any Director or Officer of the Company during the year.
Nature/ Purpose of each reserve
a) Capital Reserve: During amalgamation / merger / acquisition, the excess of net assets taken, over the consideration paid, if any, is treated as capital reserve.
b) Capital Redemption Reserve: The Company has recognised Capital Redemption Reserve on redemption of preference shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the preference shares redeemed.
c) Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. This reserve is utilised in accordance with the provisions of the Companies Act 2013.
d) General Reserve: The reserve arises on transfer portion of the net profit pursuant to the earlier provisions of Companies Act 1956.
e) Retained Earning: Retained earnings generally represents the undistributed profit/ amount of accumulated earnings of the Company. This includes Rs. 3391.46 lakhs (2017: Rs. 3391.46 lakhs & 2016: Rs. 3391.46) which is not available for distribution as these are represented by changes in carrying amount of Property, Plant and Equipments being measured at fair value as on the date of transition as deemed cost.
f) Equity Instrument through OCI: The Company has elected to recognise changes in the fair value of certain investment in equity instrument in other comprehensive income.
20.1 Deposit (Cover Money) from Stockist are retained with company till continuation of principal stockist relationship.
20.2 There are no amounts due for payment to the Investor Education and Protection Fund at the end of the year.
24.1 Details of Security Given for Loan
Borrowings from State Bank of India are secured by hypothecation of Inventories, Book Debts and Other Current Assets and charge on Fixed Assets of the company.
24.2 Refer note no. 41 for information on the carrying amounts of financial and non-financial assets pledged as security for current borrowings.
3 OPERATING LEASES
3.1 As Lessee
The Company has certain operating leases for, premises (Office and Godowns) which include both cancellable and non-cancellable leases, range between 6 years to 9 years generally and are usually renewable by mutual consent on mutually agreeable terms. With respect to non-cancellable operating lease, the future minimum lease payment at the balance sheet date is as under.
4 Disclosure pursuant to Indian Accounting Standard - 19 ''Employee Benefits'' as notified u/s 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 (As identified & certified by the Management)
44.1 Defined Benefit Plan:
The following are the types of defined benefit plans
44.2 Gratuity Plan
Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972. The present value of defined obligation and related current cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at Balance Sheet date.
44.3 Provident Fund
Provident Fund (other than government administered) as per the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952.
The Gratuity Scheme is invested in a Group Gratuity policy offered by Life Insurance Corporation of India. The information on the allocation of the fund into major asset classes and expected return on each major class are not readily available. The expected rate of return on plan assets is based on market expectations, at the beginning of the period, for returns over the entire life of the related obligation.
44.4 Asset-Liability Matching Strategy
The Company''s investments are being managed by Life Insurance Company and at the year end interest is being credited to the fund value. The company has not changed the process used to manage its risk from previous periods. The Company''s investments are fully secured and would be sufficient to cover its obligations.
44.5 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.
44.6 Sensitivity Analysis
The sensitivity analyses below have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:
5. TRANSITION TO IND AS
5.1 Basis for Preparation
For all period up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements for the year ended March 31, 2018 are the Company''s first annual IND AS financial statements and have been prepared in accordance with IND AS.
The accounting policies set out in note 3 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the date of transition). This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows.
5.2 Exceptions and Exemptions Applied
IND AS 101 "First-time adoption of Indian Accounting Standards" (hereinafter referred to as Ind AS 101) allows first time adopters certain exemptions from the retrospective application of certain IND AS, effective for April 1, 2016 opening balance sheet. In preparing these consolidated financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.
5.3 Optional Exemptions Availed
a Property Plant and Equipment, Intangible Assets and Investment Properties
As permitted by para D5-D8B of Ind AS 101,The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date except for certain class of assets which are measured at fair value as deemed cost.
b Determining whether an arrangement contains a Lease
Para D9-D9AA of Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind As 17 "Leases" for determining whether an arrangement existing at the date of transition contains a lease by considering the faces and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has applied the above transition provision and has assessed all the arrangements at the date of transition.
c Designation of previously recognised financial instruments
Para D19B of Ind AS 101 permits an entity to designate particular investments in equity instruments as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather at initial recognition). The Company has opted to avail this exemption to designate its investments in equity instruments (other than investment in subsidiaries and associates) as FVOCI on the date of transition.
5.4 Mandatory Exceptions a Estimates
As per para 14 of Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity''s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.
As per para 16 of the standard, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition or at the end of the comparative period.
The Company''s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statement that were not required under the previous GAAP are listed below:
- Fair Valuation of financial instruments carried at FVTPL and/ or FVOCI.
- Impairment of financial assets based on the expected credit loss model.
- Determination of the discounted value for financial instruments carried at amortized cost. b De-recognition of financial assets and liabilities
As per para B2 of Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, "Financial Instruments", prospectively for transactions occurring on or after the date of transition to Ind AS. However, para B3 gives an option to the entity to apply the derecognition requirements from a date of its choice if the information required to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the initially accounting for those transactions. The company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
c Classification and measurement of financial assets
Para B8 - B8C of Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortized cost has been done retrospectively.
5.5 Impact of Transition to Ind AS
The following is a summary of the effects of the differences between IND AS and Indian GAAP on the Company''s total equity shareholders'' funds and profit and loss for the financial periods previously reported under Indian GAAP following the date of transition to IND AS.
5.6 Notes to First Time Adoption a Fair valuation as deemed cost for Property, Plant and Equipment
The Company have considered fair value for property, viz land admeasuring over 7.46 acres, situated in India, with impact of Rs. 3391.46 lacs in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves.
b Fair valuation of Financial Assets
i Under the previous GAAP, investments in equity instruments and mutual funds were classified as longterm investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 March 2017
Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in FVOCI - Equity investments reserve as at the date of transition and subsequently in the other comprehensive income for the year ended 31 March 2017.
ii Under previous GAAP, the interest free security deposit were carried at cost. Under Ind AS the same are measured at fair value on initial recognition and subsequently measured at amortised cost.
c Fair Valuation of Derivative Instrument
Under previous GAAP, in case of forward contracts covered under AS 11, difference between forward rate and spot rate was recognised in profit or loss over the term of contract. Under Ind AS, derivative financial instruments are measured at fair value through profit & loss.
d Expected Credit Loss Model
Under previous GAAP, the Group had created provision for doubtful debts based on specific amount for incurred losses. Under Ind AS, the allowance for doubtful debts has been determined based on expected credit loss model.
e Provision for Expected Sales Return
The Company has recognised provision for expected sales return on account of breakage and expiry of goods. The same has resulted in decrease in revenue and increase in provisions.
f Deferred Tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.
In addition, the various transitional adjustments lead to different temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.
g Remeasurements of post-employment benefit obligations
Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss.
h Reclassification between Previous GAAP and Ind AS
i. Excise duty has been reclassified from revenue to other expenses.
ii. Cash discounts to customers has been reclassified from other expenses to revenue.
i Retained Earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
6. The management assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short term borrowings, and other financial asset & other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments.
7. FAIR VALUE HIERARCHY
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement" An explanation of each level follows underneath the tables.
7.1 Fair Valuation Technique
Investments in mutual funds are measured using quoted market prices at the reporting date multiplied by the quantity held.
The fair value of derivative financial instruments is determined based on observable market inputs including currency spot and forward rates, yield curves, currency volatility etc. These derivatives are estimated by using the pricing models, where the inputs to those models are based on readily observable market parameters, contractual terms, period to maturity, maturity parameters and foreign exchange rates. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from market rates. The said valuation has been carried out by the counter party with whom the contract has been entered with and management has evaluated the credit and non-performance risks associated with the counterparties and believes them to be insignificant and not requiring any credit adjustments.
7.2 During the year ended March 31, 2018 and March 31, 2017, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.
7.3 Explanation to the fair value hierarchy
The Company measures financial instruments, such as, quoted investments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
7.4 Level 1 Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
7.5 Level 2 The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
7.6 Level 3 If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration included in level 3.
8 FINANCIAL RISK MANAGEMENT: OBJECTIVE AND POLICIES.
Financial management of the Company has been receiving attention of the top management of the Company. The management considers finance as the lifeline of the business and therefore, financial management is carried out meticulously on the basis of detailed management information systems and reports at periodical intervals extending from daily reports to long-term plans. Importance is laid on liquidity and working capital management with a view to reduce over-dependence on borrowings and reduction in interest cost. Various kinds of financial risks and their mitigation plans are as follows:
8.1 Credit Risk
The credit risk is the risk of financial loss arising from counter party failing to discharge an obligation. The credit risk is controlled by analysing credit limits and credit worthiness of customers on continuous basis to whom the credit has been granted,obtaining necessary approvals for credit and taking security deposits from trade channels.
a. Provision for expected credit losses
The Company measures Expected Credit Loss (ECL) for financial instruments based on historical trend, industry practices and business environment in which the Company operates.
For financial assets, a credit loss is the present value of the difference between:
(i) the contractual cash flows that are due to an entity under the contract; and
(ii) the cash flows the the entity expects to receive.
The Company recognises in profit or loss, the amount of expected Credit Losses (or reversal) that is required to adjust the loss allowance at the reporting date in accordance with Ind AS 109.
In determination of allowances for credit losses on trade receivables, the Company has used a practical expedience by computing the expected credit losses based on ageing matrix, which has taken into account historical credit loss experience and adjusted for forward looking information.
8.2 Liquidity Risk
The Company determines its liquidity requirement in the short, medium and long term. This is done by drawings up cash forecast for short term and long term needs.
The Company manage its liquidity risk in a manner so as to meet its normal financial obligations without any significant delay or stress. Such risk is managed through ensuring operational cash flow while at the same time maintaining adequate cash and cash equivalent position. The management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity monitoring future cash flow and liquidity on a regular basis. Surplus funds not immediately required are invested in certain mutual funds and fixed deposit which provide flexibility to liquidate. Besides, it generally has certain undrawn credit facilities which can be assessed as and when required; such credit facilities are reviewed at regular basis.
d The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements (if any). The interest payments on variable interest rate loans in the tables above reflect market forward interest rates at the respective reporting dates and these amounts may change as market interest rates change. The future cash flows on derivative instruments may be different from the amount in the above tables as exchange rates change. Except for these financial liabilities, it is not expected that cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. When the amount payable is not fixed, the amount disclosed has been determined with reference to conditions existing at the reporting date.
8.3 Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risks: Foreign Exchange Risk, Interest Rate Risk and Other Price Risk.
8.4 Foreign Exchange Risk
Foreign Exchange Risk is the exposure of the Company to the potential impact of movements in foreign exchange rates. The Company imports various raw materials viz. chemicals, drugs, API, packing materials viz. granules, items of stores and spares and capital goods as per its requirements from time to time and also borrows funds in foreign currencies. This results in foreign currency risk to the Company. Similarly, company''s exports are also exposed to foreign currency risks.
For the Foreign Exchange exposures risk management, the Company''s Policy is to adopt a flexible approach in hedging its risk. For this, the Company from time to time takes the view from banks and foreign exchange experts and based upon the same and also considering macro-economic factors, forms a view and whenever deemed necessary, hedges its foreign exchange risk. The hedging strategies are taken after careful study/ analysis of foreign exchange market to minimize to the extent possible, any effect of the fluctuation in foreign exchange rates.
b Sensitivity Analysis
A reasonably possible strengthening (weakening) of the INR against USD and EUR as at 31st March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and Profit and Loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
8.5. Interest Rate Risk
The Company is exposed to risk due to interest rate fluctuation on long term borrowings. Such borrowings are based on fixed as well as floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio diversification and exercise of prepayment/refinancing options where considered necessary.
The Company is also exposed to interest rate risk on surplus funds parked in fixed deposits and interest bearing investments. To manage such risks, such investments are done mainly for short durations, in line with the expected business requirements for such funds if any.
8.6 Other Price Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates. the Company do not have any long-term debt obligations. Moreover, the short-term borrowings of the Company do not have a significant fair value or cash flow interest rate risk due to their short tenure.
However, the Company is also exposed to interest rate risk on surplus funds parked in mutual funds (debt oriented) measured at fair value through Profit and Loss.
8.7 Other Price Risk
The Company is exposed to equity price risk, which arises from mutual fund (equity oriented) measured at fair value through Profit and Loss. In order to deploy the surplus funds, necessary planning is done by the Finance & Accounts Department after considering the fund planning of subsequent months and overall fund position. Various investments options are evaluated within the investment options allowed by the Board to arrive at proper decision.
The Investment so made are reviewed every fortnight. To spread the concentration of funds as well as risks, investments in Mutual Funds are scattered and utmost care and vigilance is undertaken before deployment of funds for investment purpose to ensure credit worthiness of the investment and availability of such surplus invested funds to meet any unforeseen situation that may arise.
b Sensitivity Analysis
The table below summarise the impact of increases/ decreases of the index on the Company''s equity investment and profit for the period. The analysis is based on the assumption that the equity index had increased/ decreased by 5% with all other variables held constant, and that all the company''s equity instruments moved in line with the index.
9 CAPITAL MANAGEMENT
The Company objective to manage its capital is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic Investments. Sourcing of capital is done through judicious combination of equity/internal accruals and borrowings, both short term and long term. Net debt ( total borrowings less cash and cash equivalents) to equity ratio is used to monitor capital.
10 DISCONTINUED OPERATIONS
Discontinued operation (pursuant to Ind AS 1 and Ind AS 105)
(a) The Board of Directors has decided to discontinue operations of Mandideep Unit due to continuing loss during its meeting dated 26th December, 2017. The disposal of assets therein including paying of liabilities are expected to be within a year since balance sheet date.
Consequent upon above relevant unit has been accounted for as discontinued operation with departure from cost model of carrying cost of fixed capital outlay which have been accounted for fair value. Similar adjustment has also been made for carrying inventories in terms of fair value in terms of Para-25 of Ind AS 1
No other asset belongs to the disposal group going by the latter term defined in Appendix-''A'' of Ind AS 105 neither the liabilities relate to non-current-assets held for sale or disposal group. As such no other asset or liability qualify for disclosure within the meaning of Para-40, Ind AS-105
11 IMPAIRMENT
The Company has not found any indication of impairment of the assets as per Ind AS 38 and accordingly no further exercise for calculating impairment loss has been undertaken.
12 The Board of Directors have recommended a dividend of Rs.5.50 per equity share of Rs.10/- each (amounting to Rs. 378.43 Lacs including dividend distribution tax, which has not been provided) for the financial year ended 31st March,2018, which is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.
13 Previous GAAP figures have been reclassified/regrouped to confirm the presentation requirements under IND AS and the requirements laid down in Division-II of the Schedule-III of the Companies Act,2013.
Mar 31, 2016
1. Terms/Rights attached to equity share
The company has issued only one class of equity shares having a face value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pay dividend in Indian rupees. The dividend proposal by the Board of Directors is subject to approval of the share holders in the ensuing Annual General Meeting. During the year ended 31st March 2016,amount per share of interim dividend recognized as distributions to equity shareholders was Rs. 5.50 (Previous Year Interim Dividend Rs. Nil). (Previous Year Final Dividend Rs. 5.50)
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the numbers of equity shares held by share holders.
2. Share holders are entitled to voting right in proportion to holding.
3. Shares are ordinarily transferable provided :
a) instrument of transfer is in form prescribed under the Act
b) company does not have any lien on shares under transfer, and
c) transferee has convert his consent persuant to notice under section 56 of the Companies Act, 2013, issued by the company in respect of application of transfer of partly paid share is made by transferors.
4. Term Loan from State Bank of India bearing interest @ 12.30 per annum on reducing balance is secured by : First charge on Fixed Assets acquired/ to be acquired by the company and second charge on entire current assets both existing and future.
5 Borrowings from State Bank of India are secured by hypothecation of Inventories, Book Debts and other current assets and second charge on fixed assets of the company.
6 There is no default in payment of any short term borrowings or interests thereon.
7. No guarantee bond has been furnished against any loan by any source.
8 Refer Note No. 28.7 on outstanding dues to Micro and Small Enterprises
9. * Fixed Deposits includes Rs.66.25 Lacs (which had original maturity of more than 12 months since the date of deposit) were held to adhere to stipulation laid down under Companies (Acceptance of Deposits) Rules 2015 to the effect of retaining specified percentage of Deposit liability payable within one year.
Note : Dispute relates to conflicting contention between Company and Supplier on delivery of goods. Neither any additional provision made during the year nor withdrawn. The provision has been made as a measure of abundant precaution. Possible outflow of fund, if matures, is expected in succeeding years.
10. Segment Reporting :
Based on the guiding principles given in Accounting Standard on Segment Reporting (AS-17) the company''s primary business Segment is Pharmaceuticals. As the Company''s business activity falls within a single primary business segment based on clause - 5, AS-17 the disclosure requirements in this regard are not applicable.
Geographical segment reporting of the company is also not applicable as export to a country or group of countries having common socio-economics or marketing features does not constitute 10% of the turnover of the company.
11. Employee Benefits :
Details of employee benefits considered in these accounts in keeping with Accounting Standard 15 (Revised) prescribed by the Central Government under the Companies (Accounting Standards) Rules, 2006, (also refer note 1.6 of Significant Accounting Policies above).
12. With reference to item 14 of Significant Accounting Policies in Note 1 above the company has not found any indication of impairment of assets within the meaning of Clause-5 AS-28 and accordingly no further exercise for calculating impairment loss has been undertaken.
13. Amount Due to Micro and Small Enterprises.
The Identification of vender under Micro and Small category as defined under "The Micro, Small and Medium Enterprises Development Act 2006" (MSMED Act) is based on the disclosure of such parties made in their invoices/ challan as laid down by relevant statute.
Based on aforesaid exercise amount due to Micro and Small Enterprises as on 31.03.2016 aggregate Rs.14.75 lacs (Previous year Rs.17.58 lacs), the amounts overdue as on March 31, 2016 on account of principal amount together with interest, aggregate to Rs. Nil (Previous year Rs. Nil).
14. Nominal amount of Forward Contracts entered into by the Company against buyer''s credit for hedging adverse impact of foreign currency fluctuation and outstanding as at 31st March 2016 amount to Rs. Nil (Previous Year Rs.252.43 lacs).
15. Pursuant to schedule II of Companies Act, 2013 components identified in terms of specified benchmark forming Part of Assets have been subjected to depreciation separately according to their life span, technically assessed, which led to charging of Rs. 21.16 lacs against surplus column of reserves and surplus (net off deferred tax thereon Rs.11.20 lacs) towards overaged components and decrease in profit by Rs.4.02 lacs for charging depreciation on remaining components to amortize them during their revised life span as technically assessed.
16. The Company has certian operating leases for, permises (Office and Godowns) which are not non-cancellable range between 1.33 years to 9 years generally and are usually renewable by mutual consent on mutually agreeable terms. During the year the Company has charged related lease rental of Rs.53.04 lacs (Previous Year Rs.46.07 lacs) which is included in the statement of Profit and Loss under the head Rent (Refer Note 26.)
17. Corporate Social Responsibility Expenditure
As per Section 135 of the Companies Act, 2013, (Act) a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immidiately preceding three financial years on Corporate Social Responsibility (CSR) activities. A CSR Committee has been formed by the company as per the Act.
- Gross amount required to be spent by the company during the year is Rs.34.80 lacs (Previous Year Rs.28.61lacs).
- Amount spent during the year :
18. The previous periods figure have been regrouped and rearranged wherever necessary.
Mar 31, 2015
1.1 Terms/Rights attached to equity share
The company has issued only one class of equity shares having a face
value of Rs 10 per share.Each holder of equity shares is entitled to
one vote per share.The company declares and pay dividend in Indian
rupees. The dividend proposal by the Board of Directors is subject to
approval of the share holders in the ensuing Annual General Meeting.
During the year ended 31st March 2015,amount per share of dividend
recognized as distributions to equity shareholders was Rs. 5.50
(Previous Year Rs. 5.00)
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company
after distribution of all preferential amounts. The distribution will
be in proportion to the numbers of equity shares held by share holders.
1.2 Share holders are entitled to voting right in proportion to
holding.
1.3 Shares are ordinarily transferable provided :
a) instrument of transfer is in form prescribed under the Act
b) company does not have any lien on shares under transfer, and
c) transferee has convert his consent persuant to notice under section
56 of the Companies Act, 2013, issued by the company in respect of
application of transfer of partly paid share is made by transferors.
2.1 Term Loan from State Bank of India is secured by:
Exclusive first charge on Plant and Machinaries and other tangible
movable assets acquired / to be acquired and Equitable Mortgage on
entire Land and Building of Kolkata Factory and Extensions of first
charge on other tangible fixed assets of the Company at Ghaziabad and
Mandideep Units and extension of hypothecation charge over the
Company''s entire current assets both existing and future.
2.2 Term loan from State Bank of India is repayable in quarterly
installments of Rs. 50 Lacs each payable in each quarter end.
2.3 There is no default in repayment of any loan.
3.1 Working Capital Borrowings from State Bank of India is secured by
hypothecation of Inventories and Book Debts and charge on fixed assets
of the company.
3.2 There is no default in payment of any short term borrowings.
3.3 No guarantee bond has been furnished against any loan by any
source.
(b) Name of related parties in transaction with the company and
description of relationship :
Entities over which key management personnel or his / their relatives
are able to excercise significant influence :
Kothari & Co. Pvt. Ltd.
Kothari Medical Centre.
Commercial House Pvt. Ltd.
Kothari Investment & Industries Pvt. Ltd.
Bharat Fritz Werner Ltd Bhaktwatsal Investments Ltd
Key Managerial Personnel :
Sri A. K. Kothari - Chairman & Managing Director.
Sri K. P. Mundhra - Executive Director.
Sri S. C. Shah - V.P. (Finace) & C.F.O. ( W.e.f. 1st April 2014)
Dr Indrajit Dhar - Associate V.P. (Accts. & Tax.) cum Company Secretary
- ( W.e.f. 1st April 2014)
Directors:
Smt. P. D. Kothari (W.e.f. 31st March, 2014)
Sri R. Singhi Sri H. Kampani
Dr K. Lahiri (W.e.f. 31st March, 2014)
Dr A. K. Bhattacharya (W.e.f. 31st March, 2014)
Sri Arindam Sarkar (W.e.f. 7th August, 2014)
Sri D. D. Binani (Resigned from 13 th November 2014)
Sri P. L. Agarwal (Resigned from 31st Mach 2014)
Sri A. V. Ayenger (Resigned from 31st March 2014)
3.4 Segment Reporting :
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) the company''s primary business Segment is
Pharmaceuticals. As the Company''s business activity falls within a
single primary business segment based on clause - 5, AS-17 the
disclosure requirements in this regard are not applicable.
Geographical segment reporting of the company is also not applicable as
export to a country or group of countries having common socio-economics
or marketing features does not constitute 10% of the turnover of the
company.
3.5 Employee Benefits :
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) prescribed by the Central
Government under the Companies (Accounting Standards) Rules, 2006,
(also refer note 1.6 of Significant Accounting Policies above).
a. The company has recognized, in the statement of profit and loss for
the year ended 31.03.2015, an amount of Rs.536.56 Lacs (Previous Year
Rs.474.17 Lacs) expenses under defined contribution plans. Details
given below :
3.6 With reference to item 14 of Significant Accounting Policies in
Note 1 above the company has not found any indication of impairment of
assets and accordingly no further excercise for calculating impairment
loss has been undertaken.
3.7 Amount Due to Micro and Small Enterprises.
The Identification of Micro and Small Enterprises Suppliers as defined
under "The Micro, Small and Medium Enterprises Development Act 2006"
(MSMED Act) is based on the disclosure of parties belonging to Micro,
small and Medium categories and MSMED Act as laid down by statute.
Amount due to Micro and Small Enterprises as on 31.03.2015 Rs.19.24
lacs (Previous year Rs.21.76 lacs). As certified by the Management, the
amounts overdue as on March 31, 2015 to Micro and Small Enterprises on
account of principal amount together with interest, aggregate to Rs.
Nil (Previous year Rs. Nil).
3.8 Dividend proposed to be distributed on equity Shares @ Rs. 5.50
per share for the year ended 31st March 2015. amounting to Rs. 377.79
lacs (including Rs. 63.90 lacs as Tax on Dividend)
3.9 Effective from April 1, 2014, the Company has charged
depreciation based on the revised remaining useful life of assets as
per the requirement of Schedule II of the Companies Act 2013. Due to
above depreciation for the year ended 31st March, 2015 is higher by
Rs.425.90 lacs and profit is lower by the same amount. Further,
over-aged asset under new dispensation (net of Deferred Tax of Rs.
383.21 lacs) amounted to Rs.744.22 lacs has been adjusted with retained
earnings.
3.10 The previous periods figure have been regrouped and rearranged
wherever necessary.
Mar 31, 2014
1. Terms/Rights attached to equity share
The company has issued only one class of equity shares having a face
value of Rs 10 per share.Each holder of equity shares is entitled to
one vote per share.The company declares and pay dividend in Indian
rupees. The dividend proposal by the Board of Directors is subject to
approval of the share holders in the ensuing Annual General Meeting.
During the year ended 31st March 2014,amount per share of dividend
recognized as distributions to equity shareholders was Rs. 5 (Previous
Year Rs 4.50). In the event of liquidation of the company, the holders
of equity shares will be entitled to receive remaining assets of the
company after distribution of all preferential amounts. The
distribution will be in proportion to the numbers of equity shares held
by share holders.
2. Share holders are entitled to voting right in proportion to
holding.
3. Shares are ordinarily transferable provided :
a) instrument of transfer is in form prescribed under the Act
b) company does not have any lien on shares under transfer, and
c) transferee has convert his consent pursuant to notice under section
10(2) of the Companies Act issued by the company in respect of
application of transfer of partly paid share is made by transferors.
4.. Term Loan from State Bank of India is secured by :
Exclusive frst charge on Plant and Machinaries and other tangible
movable assets acquired / to be acquired and Equitable Mortgage on
entire Land and Building of Kolkata Factory and Extensions of frst
charge on other tangible fixed assets of the Company at Ghaziabad and
Mandideep Units and extension of hypothecation charge over the
Company''s entire current assets both existing and future.
5. Term loan of Rs.1000.00 Lacs from State Bank of India is repayable
in quarterly installments of Rs. 50 Lacs each from frst quarter ended
30th June, 2014 to 31st March,2019.
6. Term loan of Rs.600.00 Lacs ( sanctioned amount) from State Bank of
India is repayable in quarterly installments of Rs. 25 Lacs each from
last quarter ended 31st March, 2015 to 31st December,2016 and quarterly
installments of Rs.50.00 Lacs each from quarter ended 31st March, 2017
to 31st December, 2018.
7. There is no default in repayment of any loan.
8. No guarantee bond has been furnished against any loan by any
source.
( Rs in Lacs )
Year
ended Year
ended
31st
March,
2014 31st
March,
2013
9. other Notes to Financial statements :
9.1 Contingent Liabilities and commitments :
(To the extend not
provided for)
I. Contingent Liabilities / Disputed
Liabilities :
A) Claims against the company not
acknowledged as debt:
i) Excise Matters 365.56 731.95
ii) Sales Tax Matters 66.62 67.57
iii) Others 80.46 64.08
B) Guarantees:
Counter guarantees to Banks
for performance against contracts. 259.07 242.80
Guarantee to Other for Export
Obligation 97.05 97.05
Guarantee to Bank securing
Corporate Loan 3500.00 -
given by bank to another company.
(Loan outstanding as on 31.03.2014
Rs.3500.00 Lacs )
II. Commitments
Estimated amount of contract
remaining to be
executed on capital account and not
provided for: 274.73 111.82
9.2 Related Party disclosure :
Related Party disclosures as required under AS-18 on ÂRelated Party
Disclosures" prescribed by the Central Government under the Companies
(Accounting Standards) Rules, 2006, are given below:-
(a) Transaction with Related Parties During the Year.
(b) Name of related parties in transaction with the company and
description of relationship:
Enttes over which key management personnel or his / their
relatives are able to excercise significant influence :-
Kothari & Co. Pvt. Ltd.
M.D. Kothari & Co. Ltd.
Kothari Medical Centre.
Commercial House Pvt. Ltd.
Kothari Investment & Industries Pvt. Ltd.
Vishnuhari Investment & Properties Ltd.
Bharat Fritz Werner Ltd
Kothari Capital & Securities Pvt Ltd
Bhaktwatsal Investments Ltd
Kothari Hitech Consultant Pvt Ltd
Key Management Personnel:
Sri A.K.Kothari - Chairman & Managing Director.
Sri K.P. Mundhra - Executive Director.
10. Segment Reporting:
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) prescribed by the Central Government under the
Companies (Accounting Standards) Rules, 2006, the company''s primary
business Segment is Pharmaceuticals. As the Company''s business activity
falls within a single primary business segment the disclosure
requirements of AS-17 in this regard are not applicable.
Geographical segment reporting of the company is also not applicable as
export sales constitute less than 10% of the total sales of the
company.
11. Employee Benefits:
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) prescribed by the Central
Government under the Companies (Accounting Standards) Rules, 2006,
(also refer note 1.6 of Significant Accounting Policies above).
12. With reference to item 14 of Significant Accounting Policies in
Note 1 above the company has not found any indication of impairment of
assets and accordingly no further excercise for calculating impairment
loss has been under taken.
13. Amount Due to Micro and Small Enterprises
The Identification of Micro and Small Enterprises Suppliers as defined
under ÂThe Micro, Small and Medium Enterprises Development Act 2006" (
MSMED Act) is based on the disclosure of parties belonging to Micro,
small and Medium categories and MSMED Act as laid down by statute.
Amount due to Micro and Small Enterprises as on 31.03.2014 Rs.21.76
lacs (Previous year Rs. 4.93 lacs). As certified by the Management, the
amounts overdue as on March 31, 2014 to Micro and Small Enterprises on
account of principal amount together with interest, aggregate to Rs.
Nil (Previous year Rs. Nil).
14. Nominal amount of Forward Contracts entered into by the Company
against buyer''s credit for hedging adverse impact of foreign currency
fluctuation and outstanding as at 31st March 2014 amount to Rs. Nil
(Previous Year Rs.179.06 lacs).
15. Dividend proposed to be distributed on equity Shares @ Rs5.00 per
share for the year ended 31st March 2014. amounting to Rs.333.86 Lacs
(including Rs.48.50 Lacs as Tax on Dividend )
16. The previous periods figure have been regrouped and rearranged
wherever necessary.
Mar 31, 2013
( Rs in Lacs )
As at As at
31st March,
2013 31st March, 2012
1.1 Contingent Liabilities
and commitments :
I. Contingent Liabilities /
Disputed Liabilities :
A) Claims against the company
not acknowledged as debt :
i) Excise Matters 731.95 754.72
ii) Sales Tax Matters 67.57 25.74
iii) Others 64.08 65.26
B) Guarantees :
Counter guarantees to Banks
for performance against contracts. 242.80 124.55
Guarantee to Other for Export
Obligation 97.05 97.05
II. Commitments
Estimated amount of contract remaining
to be executed on capital account
and not provided for : 111.82 467.96
1.2 Related Party Disclosure :
Related Party disclosures as required under AS-18 on "Related Party
Disclosures prescribed by the Central Government under the Companies
(Accounting Standards) Rules, 2006, are given below :- (a) Transaction
with Related Parties During the Year.
(b) Name of related parties in transaction with the company and
description of relationship :
Entities over which key management personnel or his / their relatives
are able to excercise significant influence :-
Kothari & Co. Pvt. Ltd. M.D. Kothari & Co. Ltd.
Kothari Medical Centre. Commercial House Pvt. Ltd.
Kothari Investment & Industries Pvt. Ltd. Vishnuhari Investment &
Properties Ltd.
Key Management Personnel :
Sri A.K.Kothari  Chairman & Managing Director.
Sri K.P. Mundhra  Executive Director.
1.3 Segment Reporting :
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) prescribed by the Central Government under the
Companies (Accounting Standards) Rules, 2006, the company''s primary
business Segment is Pharmaceuticals. As the Company''s business activity
falls within a single primary business segment the disclosure
requirements of AS-17 in this regard are not applicable.
Geographical segment reporting of the company is also not applicable as
export sales constitute less than 10% of the total sales of the
company.
1.4 Employee Benefits :
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) prescribed by the Central
Government under the Companies (Accounting Standards) Rules, 2006,
(also refer note 1.6 of Significant Accounting Policies above).
1.5 With reference to item 14 of Significant Accounting Policies in
Note 1 above the company has not found any indication of impairment of
assets and accordingly no further excercise for calculating impairment
loss has been under taken.
1.6 Amount Due to Micro and Small Enterprises The Identification of
Micro and Small Enterprises Suppliers as defined under "The Micro,
Small and Medium Enterprises Development Act 2006Â ( MSMED Act ) is
based on the disclosure of parties belonging to Micro, small and Medium
categories and MSMED Act as laid down by statute.
Amount due to Micro and Small Enterprises as on 31.03.2013 Rs.4.93 lacs
(Previous year Rs. 5.36 lacs). As certified by the Management, the
amounts overdue as on March 31, 2013 to Micro and Small Enterprises on
account of principal amount together with interest, aggregate to Rs.
Nil (Previous year Rs. Nil ).
1.7 Nominal amount of Forward Contracts entered into by the Company
against buyer''s credit for hedging adverse impact of foreign currency
fluctuation and outstanding as at 31st March 2013 amount to Rs.179.06
lacs (Previous Year Rs.944.95 lacs).
1.8 Dividend proposed to be distributed on equity Shares @ Rs4.50 per
share for the year ended 31st March 2013 amounting to Rs.300.47 Lacs
(including Rs.43.65 Lacs as dividend distribution Tax)
1.9 The previous periods figures have been regrouped and rearranged
wherever necessary.
Mar 31, 2012
1.1 Term Loan from State Bank of India is secured by :
Exclusive first charge on Plant and Machinaries and other tangible
movable assets acquired / to be acquired and Equitable Mortagage on
entire Land and Building of Kolkata Factory and Extensions of second
charge on other tangible fixed assets of the Company at Ghaziabad and
Mandideep Units and extension of hypothecation charge over the
Company's entire current assets both existing and future.
1.2 Term loan from State Bank of India is repayable in quarterly
instalments of Rs 150 Lacs each.
1.3 Deposit (Cover Money) Stockist are retained with company unless
removed or left.
1.4 There is no default in repayment of any loan.
2.1 Working Capital Borrowings from State Bank of India is secured by
hypothecation of Inventories and Book Debts and charge on fixed assets
of the company.
2.2 There is no default in payment of any short term borrowings.
3.1 *Fixed Deposits held to adhere to stipulation laid down under
Companies (Acceptance of Deposits) Rules 1975 to the effect of
retaining specified percentage of Deposit liability.
(Rs. in Lacs)
31st March,
2012 31st March
2011
4. OTHER NOTES TO FINANCIAL STATEMENTS :
4.1 Contingent Liabilities and commitments :
I. Contingent Liabilities / Disputed
Liabilities :
A) Claims against the company not
acknowledged as debt:
i) Excise Matters 754.72 804.94
ii) Sales Tax Matters 25.74 25.74
iii) Others 65.26 126.02
B) Gurantees:
Counter gurantees to Banks
for performance against contracts. 124.55 80.46
Gurantee to Other for Export Obligation 97.05 97.05
II. Commitments
Estimated amount of contract remaining to be
executed on capital account and not
provided for: 467.96 1.68
5.1 Segment Reporting:
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) issued by the Institute of Chartered Accountants of
India, the company's primary business Segment is Pharmaceuticals. As
the Company's business activity falls within a single primary business
segment the disclosure requirements of AS-17 in this regard are not
applicable. Geographical segment reporting of the company is also not
applicable as export sales constitute less than 10% of the total sales
of the company.
5.2 Employee Benefits:
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) issued by the Institute of
Chartered Accountants of India (also refer note 1.6 of Significant
Accounting Policies above). a. The company has recognized, in the
profit & loss statement of the year ended 31.03.2012, an amount of Rs
399.62 Lacs (Previous Year Rs 375.15 Lacs) expenses under defined
contribution plans. Details given below :
The expenses for the above mentioned benefits have been disclosed under
the following line items : Gratuity - Gratuity under Employee Benefits
Expense.
Leave Salary - Salary, Wages & Bonus under Employee Benefits Expense.
5.3 With reference to item 14 of Significant Accounting Policies in
Note 1 above the company has not found any indication of impairment of
assets and accordingly no further excercise for calculating impairment
loss has been under taken.
5.4 Amount Due to Micro and Small Enterprises
The Identification of Micro and Small Enterprises Suppliers as defined
under "The Micro, Small and Medium Enterprises Development Act 2006"
(MSMED Act) is based on the discloser of parties belonging to Micro
small catogories and MSMED Act as laid down by statute.
Amount due to Micro & Small and Medium Enterprises as on 31.03.2012 Rs
5.36 lacs (Previous year Rs 1.66 lacs). As certified by the Management,
the amounts overdue as on March 31, 2012 to Micro and Small Enterprises
on account of principal amount together with interest, aggregate to Rs
Nil (Previous year Rs Nil).
5.5 Nominal amount of Forward Contracts entered into by Company and
outstanding as at 31st March 2012 amount to Rs 944.94 Lacs (Previous
Year Rs 745.82 Lacs).
5.6 The company has given certain Plant and Machinery under a
non-cancellable operating lease in earlier year for a period of 117
months which has been terminated during the current year. The terms of
the lease include operating term for renewal and restrict the right to
sell, sub-let or allow any third person to use the machinery without
the prior consent of the company in writing. Initial Direct cost for
such leases are borne by the lessor.
5.7 Dividend proposed to be distributed on equity Shares @ Rs 4.50 per
share for the year ended 31st March 2012. amouting to Rs 298.48 Lacs
(including Rs 41.66 Lacs as dividend distribution Tax).
5.8 In view of the revision to the Schedule VI as per notification
issued by the Central Government, the financial statements for the year
ended 31st March 2012 have been prepared as per requirements of the
Revised Schedule VI to the Companies Act, 1956. The previous periods
figure have been accordingly regrouped / reclassified to conform to the
current year's classification.
Mar 31, 2011
1. Contingent Liabilities not provided for :
2010-2011 2009-2010
Rs.in lacs Rs.in lacs
i) Excise Matters 804.94 721.78
ii) Sales Tax Matters 25.74 29.65
iii) Counter guarantees 332.73 222.96
iv) Others 126.02 70.83
2. Estimated amount of contract remaining to be executed on capital
account and not provided for Rs. 1.53 lacs (net of advance Rs.0.15
lacs) (Previous year Rs.101.81 lacs, net of advance Rs. 5.17 lacs)
3. Related Party Disclosure:
(b) Name of related parties in transaction with the company and
description of relationship:
Entities over which key management personnel or his / their relatives
are able to excercise significant influence :-
Kothari & Co. Pvt. Ltd.
Claro India Ltd.
Kothari Medical Centre.
Key Management Personnel :
Sri A.K. Kothari à Chairman & Managing Director.
Sri K.P. Mundhra à Executive Director.
4. Segment Reporting:
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) issued by the Institute of Chartered Accountants of
India, the companyÃs primary business Segment is Pharmaceuticals. As
the CompanyÃs business activity falls within a single primary business
segment the disclosure requirements of AS-17 in this regard are not
applicable. Geographical segment reporting of the company is also not
applicable as export sales constitute less than 10% of the total sales
of the company.
5. Employee Benefits:
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) issued by the Institute of
Chartered Accountants of India (also refer note 6 of Significant
Accounting Policies above).
6. With reference to item 14 of Significant Accounting Policies in
Schedule P above the company has not found any indication of impairment
of assets and accordingly no further excercise for calculating
impairment loss has been under taken.
7. Amount Due to Micro and Small Enterprises
The Identification of Micro and Small Enterprises Suppliers as defined
under ÃThe Micro, Small and Medium Enterprises Development Act 2006Ã is
based on the information available with the management. As certified by
the Management, the amounts overdue as on March 31, 2011 to Micro and
Small Enterprises on account of principal amount together with
interest, aggregate to Rs. Nil (Previous year Rs. Nil )
8. Addition to Fixed Assets reduced by Rs.52.49 lacs (Previous Year
Rs.39.50 lacs) on account of exchange difference during the year.
9. Nominal amount of Forward Contracts entered into by Company and
outstanding as at 31st March 2011 amount to Rs. 745.82 lacs (Previous
Year Rs.1930.90 lacs).
10. The company has given certain Plant and Machinery under a
non-cancellable operating lease in earlier year for a period of 117
months. The terms of the lease include operating term for renewal and
restrict the right to sell, sub-let or allow any third person to use
the machinery without the prior consent of the company in writing.
Initial Direct cost for such leases are borne by the lessor.
11. Figures for the previous year have been rearranged and regrouped
wherever necessary.
Mar 31, 2010
1. Contingent Liabilities not provided for:
2009-2010 2008-2009
Rs.in lacs Rs.in lacs
i) Excise Matters 721.78 707.56
ii) Sales Tax Matters 29.65 34.37
iii) Counter guarantees 222.96 212.51
iv) Others 70.83 50.10
2. Estimated amount of contract remaining to be executed on capital
account and not provided for Rs. 101.81 lacs (net of advance Rs.5.17
lacs) (Previous year Rs.100.40 lacs, net of advance Rs. 11.38 lacs).
3. Related Party Disclosure:
Related Party disclosures as required under AS-18 on "Related Party
Disclosures" issued by the Institute of Chartered Accountants of India
are given below:-
(b) Name of related parties in transaction with the company and
description of relationship:
Entities over which key management personnel or his / their relatives
are able to excercise significant influence:.
Kothari & Co. Pvt. Ltd.
Clara India Ltd.
Kothari Medical Centre.
Key Management Personnel:
Sri A. K. Kothari - Chairman & Managing Director.
Sri K. P. Mundhra - Executive Director.
4. Segment Reporting:
Based on the guiding principles given in Accounting Standard on Segment
Reporting (AS-17) issued by the Institute of Chartered Accountants of
India, the companys primary business Segment is Pharmaceuticals. As
the Companys business activity falls within a single primary business
segment the disclosure requirements of AS-17 in this regard are not
applicable. Geographical segment repoting of the company is also not
applicable as export sales constitute less than 10% of the total sales
of the company.
5. Employee Benefits:
Details of employee benefits considered in these accounts in keeping
with Accounting Standard 15 (Revised) issued by the Institute of
Chartered Accountants of India (also refer note 6 of Significant
Accounting Policies above).
a. The company has recognized, in the profit and loss account of the
year ended 31.03.2010, an amount of Rs 295.27 Lacs (Previous Year
Rs.270.95 Lacs) expenses under defined contribution plans. Details
given below:-
6. With reference to item 14 of Significant Accounting Policies in
Schedule P above the company has not found any indication of impairment
of assets and accordingly no further excercise for calculating
impairment loss has been under taken.
7. Amount Due to Micro and Small Enterprises
The Identification of Micro and Small Enterprises Suppliers as defined
under "The Micro, Small and Medium Enterprises Development Act 2006" is
based on the information available with the management. As certified by
the Management, the amounts overdue as on March 31, 2010 to Micro and
Small Enterprises on account of principal amount together with
interest, aggregate to Rs. Nil (Previous year Rs. Nil).
8. Addition to Fixed Assets reduced by Rs.39.50 lacs (Previous Year
Rs.Nil) on account of exchange difference during the year.
9. Nominal amount of Forward Contracts entered into by Company and
outstanding as at 31st March 2010 amount to Rs. 1930.90 lacs (Previous
Year Rs.303.18 lacs).
10. The company has given certain Plant and Machinery under a
non-cancellable operating lease in earlier year for a period of 117
months. The terms of the lease include operating term for renewal and
restrict the right to sell, sub-let or allow any third person to use
the machinery without the prior consent of the company in writing.
Initial Direct cost for such leases are borne by the lessor.
Lease rentals are recognised as income which was Rs.26.33 lacs during
the year (Previous Year Rs.26.33 lacs). The gross value and accumulated
depreciation of such asset as at 31st March 2010 was Rs 171.26 lacs
(Previous Year Rs.171.26 lacs) and Rs.142.11 lacs (Previous Year Rs
124.40 lacs) respectively. The future minimum lease rental receivable
by the company at the year end are as follows:
11. Figures for the previous year have been rearranged and regrouped
wherever necessary.
12. Information pursuant to Schedule VI of the Companies Act, 1956.