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Notes to Accounts of Anuh Pharma Ltd.

Mar 31, 2016

NOTE 39:

STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES:

39.1. METHOD OF ACCOUNTING:

The Financial Statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards and the relevant provisions of the Companies Act, 2013. Further, the Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except in the case of significant uncertainties.

39.2. USE OF ESTIMATES:

The preparation of financial statements require estimates and assumptions to be made that affects the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. The difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

39.3. INFLATION:

Assets and Liabilities are recorded at historical cost to the Company. These costs are not adjusted to reflect the changing value of the purchasing power of money.

39.4. FIXED ASSETS:

Fixed assets are stated at the cost of acquisition which includes taxes, duties and other identifiable direct expenses net of modvat credit availed less accumulated depreciation and amortization.

39.5. DEPRECIATION AND AMORTIZATION:

39.5.1. Depreciation on Tangible Fixed Assets is provided on pro-rata basis on the written down value method over the useful lives of assets as prescribed in Part C of Schedule II of the Companies Act, 2013. The Management of the Company estimates the useful lives and residual value for the following assets, based on independent technical evaluation, which is different from the useful lives and residual values as per Part C of Schedule II of the Companies Act, 2013, as under:

Category Useful Life Residual Value

Motor Car 5 years 25% of Cost

39.5.2. In the case of Leasehold Land, amortization/depreciation has been provided on pro-rata basis using the straight-line method over the period of the lease.

39.5.3. Intangible Fixed Assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for it use.

39.6. INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.

39.7. INVESTMENTS:

Long Term investments are stated at the cost of acquisition, except where there is diminution in value other than temporary, in which case the carrying value is reduced to recognize the decline. Current Investments are stated at the cost of acquisition or fair value, whichever is lower.

39.8. INVENTORIES:

Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, work-in-progress, packing materials, trading and other products are determined on first-in-first-out basis.

39.9. FOREIGN CURRENCY TRANSACTIONS:

39.9.1. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

39.9.2. Monetary items in the form of Loans, Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. The resultant gain or loss is accounted during the year.

39.9.3. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expense along with the exchange differences on the underlying assets/liabilities.

39.10.REVENUE RECOGNITION:

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, excise duty, adjustment for discounts (net), taxes and foreign exchange gain/loss on corresponding hedge contract. Dividend income is recognized when the right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

39.11.RETIREMENT BENEFITS:

Contribution to provident fund is charged to the Statement of Profit and Loss as incurred. The liability for payment of gratuity is covered through the Group Gratuity Scheme. Gratuity and Leave encashment benefits are accounted for based on actuarial valuations.

39.12.TAXATION:

Provision for income tax is made for both current and deferred taxes. Provision for current income tax is made on the current tax rates based on the assessable income. The Company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the financial statements and in estimating its current tax provision. Deferred tax assets are recognized where there is certainty that there will be sufficient future taxable income available against which such deferred tax assets can be realized.

39.13.IMPAIRMENT OF ASSETS:

At each Balance Sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to its present value using a discount rate that reflects the current market assessment of the time value of money and the risks specific to the asset. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment loss is recognized immediately as income in the Statement of Profit and Loss.

39.14.SUNDRY DEBTORS AND LOANS AND ADVANCES:

Sundry debtors and loans and advances are stated after making adequate provisions for doubtful balances.

39.15.GOVERNMENT GRANTS:

The Company recognizes Special capital Incentive received from the Government for setting up/expansion of an industrial undertaking as a capital Reserve.

39.16.BORROWING COSTS:

Borrowing costs attributable to the acquisition/construction of qualifying assets are capitalized and form part of the cost of the qualifying assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue as an expense.

39.17.PROVISIONS AND CONTINGENCIES:

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent assets and liabilities are not recognized.

39.18.RESEARCH AND DEVELOPMENT:

Revenue expenses on Research and Development is recognized as an expenses in the year in which it is incurred and expenditure on capital assets is depreciated over the useful life of an assets.

39.19.LEASES:

Lease payments for assets taken on operating lease are recognized in the Statement of Profit and Loss over the lease term.

39.20.MATERIAL EVENTS:

Material events occurring after the balance sheet date are taken into cognizance.

39.21.OTHER ACCOUNTING POLICIES:

These are consistent with the generally accepted accounting principles.


Mar 31, 2015

NOTE 1:

SEGMENT REPORTING:

In the opinion of the management, the Company''s operations fall within a single segment, namely ''Bulk drugs and Chemicals'', and hence, there are no separate reportable segments as per Accounting Standard 17 ''Segment Reporting''.

2 Defined Benefits Plan:

The present value of obligation is determined based on actuarial valuation using the projected unit credit method. Valuations in respect of gratuity and leave encashment have been carried out and certified by an Independent Actuary.

IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY

1 During the financial year 2012-2013, the Company has set up an in-house Research and Development facility at A-514, TTC Industrial Area, Mahape, Navi Mumbai 400701. This facility has commenced research and development work on May 1,2012. The facility has been recognised by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India vide its letter dated December 31, 2012 upto December 31,2015.

2 OTHER ACCOUNTING POLICIES:

These are consistent with the generally accepted accounting principles.


Mar 31, 2014

1. The company has only one class of Equity Shares having a par value of R 5 per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

2. The shareholders of the Company had approved the sub-division of Equity Shares of the Company having nominal/face value of R 10 each into Equity Shares having nominal/face value of R 5 each at the Extraordinary General Meeting ("EGM") held on June 9, 2006.

Consequently, the Authorised, Issued and Paid-up Share Capital were divided from R 10 per Equity share to R 5 per Equity Share.

Name of related parties and description of relationship (as certified by the management of the Company and relied upon by the auditor):

3. Entities under direct or indirect control or substantial influence:

4. Kant Pharma Pvt. Ltd (proprietor of Eskay Fine Chemicals), S Kant Healthcare Ltd, S.K. Age Exports, Bharti & Co., Sevantilal Kantilal & Co., Sevantilal Kantilal Pvt. Ltd., Sevak Pharma Pvt. Ltd., S.K. Pharma (Jogeshwari), S.K. Brothers, S.K. Distributors, Eskay Speciality Chemicals, Sevantilal Kantilal Trust, S.K. Logistics, Eskay Iodine Pvt. Ltd. and S.Kant Chemicals Pvt. Ltd.

5. Key Management Personnel: Bipin N. Shah (Managing Director)

6. Relatives of Key Management Personnel

Bharat N. Shah, Bipin N. Shah (HUF), Ritesh B. Shah and Vivek B. Shah

1 Defined Contribution Plan:

Contribution to Defined Contribution Plan recognised as expenses in the Statement of Profit and Loss

2 Defined Benefits Plan:

The present value of obligation is determined based on actuarial valuation using the projected unit credit method. Valuations in respect of gratuity and leave encashment have been carried out and certified by an Independent Actuary.

NOTE 7:

IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY

1 During the financial year 2012-2013, the Company has set up an in-house Research and Development facility at A-514, TTC Industrial Area, Mahape, Navi Mumbai 400701. This facility has commenced research and development work on May 1, 2012. The facility has been recognised by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India vide its letter dated December 31, 2012 upto December 31, 2015.


Mar 31, 2013

NOTE 1:

CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

(b) Guarantees issued by banks on behalf of the Company 1,750 1,750

(c) Other money for which the company is contingently liable:

(1) Letter of Credit outstanding 410,562,519 392,858,975

(2) Sales Tax * 2,703,368 2,703,368

413,265,887 395,562,343

413,267,637 395,564,093

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for

(b) Uncalled liability on shares andd other investments partly paid

(c) Other commitments # - -

TOTAL 413,267,637 395,564,093

NOTE 2:

SEGMENT REPORTING:

In the opinion of the management, the Company''s operations fall within a single segment, namely ''Bulk drugs and Chemicals'', and hence, there are no separate reportable segments as per Accounting Standard 17 ''Segment Reporting''.

NOTE 3:

FOREIGN REMITTANCE OF DIVIDEND:

The Company had paid dividend in respect of shares held by Non-Residents. The exact amount of dividends remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is as under:

NOTE 4:

IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY

a. During the financial year 2012-2013, the Company has set up an in-house Research and Development facility at A-514, TTC Industrial Area, Mahape, Navi Mumbai 400701. This facility has commenced research and development work on May 1, 2012. The facility has been recognised by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India vide its letter dated December 31, 2012 upto December 31, 2015.

b. The details of Capital & Revenue expenditure incured on the in-house research and development facility in financial year 2012-2013 is as under:


Mar 31, 2012

A. The company has only one class of Equity Shares having a par value of Rs 5 per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

b. The shareholders of the Company had approved the sub-division of Equity Shares of the Company having nominal/face value of Rs 10 each into Equity Shares having nominal/face value of Rs 5 each at the Extraordinary General Meeting ('EGM') held on June 9, 2006.

Consequently, the Authorised, Issued and Paid-up Share Capital were divided from Rs 10 per Equity share to Rs 5 per Equity Share.

a. The Company has not received the required information from Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have not been made.

CONTINGENT LIABILITIES AND COMMITMENTS

1 (TO THE EXTENT NOT PROVIDED FOR)

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt - -

(b) Guarantees issued by banks on behalf of the Company 1,750 1,750

(c) Other money for which the company is contingently liable:

(1) Letter of Credit outstanding 392,858,975 176,246,578

(2) Sales Tax * 2,703,368 2,703,368

395,562,343 178,949,946

395,564,093 178,951,696

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for - -

(b) Uncalled liability on shares and other investments partly paid - -

(c) Other commitments # - -

395,564,093 178,951,696

* The figure of Rs 2,703,368 is as per the orders dated April 10, 2003 of the Assistant Commissioner of Sales Tax (Appeals), Thane. Thereafter, the Company had preferred an appeal before the Maharashtra Sales Tax Tribunal, which has passed its orders on August 27, 2009. However, the Company has not yet received the revised assessment orders giving effect to the above referred Tribunal orders. The Company has filed a Writ Petition before the Honourable High Court of Bombay contesting the Tribunal order.

# The Company has imported certain raw materials and chemicals under the Advance Authorisation/License scheme without payment of duty subject to fulfilment of specified export obligations. However, the Company has yet to fulfil certain portion of these export obligations within the stipulated validity period. On a forward basis, the Company's management is confident of fulfilling these export obligations within the stipulated validity period and hence, no provision for the duty payable, in case the export obligation is not fulfilled, has been made in the accounts.

2 SEGMENT REPORTING

In the opinion of the management, the Company's operations fall within a single segment, namely 'Bulk drugs and Chemicals', and hence, there are no separate reportable segments as per Accounting Standard 17 'Segment Reporting'.

3 The financial statements for the year ended March 31, 2011 were prepared as per the then applicable, erstwhile Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Comapanies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement priciples followed for preparation of financial statements.


Mar 31, 2011

1. The Company has not received the required information from Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been made.

2. Segment Reporting:

In the opinion of the management, the Company's operations fall within a single segment, namely "Bulk drugs and Chemicals", and hence, there are no separate reportable segments as per Accounting Standard 17 'Segment Reporting'.

3. Contingent Liabilities:

Nature of the Dues 31 -03-2011 31 -03-2010 (Rupees) (Rupees)

a. Guarantees issued by banks on behalf of the Company - 1,219,015

b. Letters of Credit outstanding 176,246,578 208,262,661

c. Claims against the Company not acknowledged as debts:

i Sales Tax (including interest and penalty) 2,703,368* 2,703,368

ii Income-tax - -

2,703,368 2,703,368

* The figure of Rs. 2,703,368 is as per the orders dated April 10, 2003 of the Assistant Commissioner of Sales Tax (Appeals), Thane. Thereafter, the Company had preferred an appeal before the Maharashtra Sales Tax Tribunal, which has passed its orders on August 27, 2009. However, the Company has not yet received the revised assessment orders giving effect to the above referred Tribunal orders. The Company has filed a Writ Petition before the Honourable High Court of Bombay contesting the Tribunal order.

4. The Company has imported certain raw materials and chemicals under the Advance License scheme without payment of duty subject to fulfilment of specified export obligations. However, the Company has yet to fulfil certain portion of these export obligations within the stipulated validity period. On a forward basis, the Company's management is confident of fulfilling these export obligations and hence, no provision for the duty payable, in case the export obligation is not fulfilled, has been made in the accounts.

(b) As of the Balance Sheet date, the Company's net foreign currency exposure that is not hedged by a derivative instrument or otherwise is Rs. 10,460,102/- (Previous Year Rs.170,637,842).

5. Previous years figures have been re-grouped and/or re-classified as deemed appropriate.


Mar 31, 2010

1. Particulars regarding Capacity, Production, Opening and Closing Stock and Turnover - as certified by the Managing Director (figures in bracket relate to previous year):

(a) Licensed Capacity : Not Applicable

2. The Company has not received the required information from Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been made.

3. Segment Reporting:

In the opinion of the management, the Companys operations fall within a single segment, namely "Bulk drugs and Chemicals", and hence, there are no separate reportable segments as per Accounting Standard 17 "Segment Reporting".

1. Entities under direct or indirect S. Kant Pharma Pvt. Ltd (proprietor of Eskay Fine Chemicals), S Kant control or substantial influence: Healthcare Ltd, S.K. Age Exports, Bharti & Co., Sevantilal Kantilal & Co.,

Sevantilal Kantilal Pvt. Ltd., Sevak Pharma Pvt. Ltd., S.K. Age Exports, S.K. Pharma (Jogeshwari), S.K. Brothers, S.K. Distributors, Eskay Speciality Chemicals and Sevantilal Kantilal Trust.

2. Key Management Personnel: Bipin N. Shah (Managing Director) and G.C. Sharda (Chief Executive Officer)

3. Relatives of Bharat N. Shah, Bipin N. Shah (HUF), Ritesh B. Shah, Ketan N. Shah and Key Management Personnel Vivek B. Shah

4. Contingent Liabilities:

31-3-2010 31-3-2009 Nature of the Dues Rupees Rupees

a. Guarantees issued by banks on behalf of the Company 1,219,015 4,167,207

b. Letters of Credit outstanding 208,262,661 298,400,000

c. Claims against the Company not acknowledged as debts:

i Sales Tax (including interest and penalty) 2,703,368* 2,703,368

ii Income-tax - 329,694

2,703,368 3,033,062

* The figure of Rs.2,703,368 is as per the orders dated April 10, 2003 of the Assistant Commissioner of Sales Tax (Appeals), Thane. Thereafter, the Company had preferred an appeal before the Maharashtra Sales Tax Tribunal, which has passed its orders on August 27, 2009. However, the Company has not yet received the revised assessment orders giving effect to the above referred Tribunal orders. The Company now plans to file a Writ Petition before the Honourable High Court of Bombay contesting the Tribunal order.

5. The Company has imported certain raw materials and chemicals under the Advance License scheme without payment of duty subject to fulfilment of specified export obligations. However, the Company has yet to fulfil certain portion of these export obligations within the stipulated validity period. On a forward basis, the Companys management is confident of fulfilling these export obligations and hence, no provision for the duty payable, in case the export obligation is not fulfilled, has been made in the accounts.

(b) As of the Balance sheet date, the Companys net foreign currency exposure that is not hedged by a derivative instrument or otherwise is Rs. 170,637,842 (Previous Year Rs. 185,387,624)

6. (a) In context with the Interim Dividend of Rs.27,840,000 paid by the Company, the Company has not complied with the provisions of section 205(1 A) (i.e. there is a delay in transfer of dividend into a separate Bank Account) and 205A (i.e. there is a delay in payment of dividend to its shareholders) of the Companies Act, 1956.

(b) During the financial year 2009-2010, the Company has paid Remuneration to Ritesh B. Shah, which is in excess of limit specified in section 314(IB) of the Companies Act, 1956. The Company has since recovered the excess remuneration in financial year 2010-11.

7. Previous years figures have been re-grouped and/or re-classified as deemed appropriate.

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