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Notes to Accounts of Brooks Laboratories Ltd.

Mar 31, 2016

b) Terms & Conditions

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holder 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 number of equity shares held by the shareholders.

e) I information on equity shares alloted as bonus shares 51,52,412 Shares were alloted as Bonus shares during the last five years by capitalization of Free Reserves. Details of which are as mentioned below:

Rs 41.92 lacs (PY Nil) hire purchase loans carry interest @ 9.5% p.a. The loans are repayable in 60 equal monthly installments starting from the respective date of finance. The loan are secured by hypothecation of vehicles financed.

Secured Loans from Banks includes:

a) Cash Credit facility from Kotak Mahindra Bank amounting to Rs. 528.36 lacs (PY Rs. 51.25 lacs) is secured by 1st hypothecation charge on stocks, receivable & all current assets and collaterally secured by equitable mortgage of industrial property at Baddi & corporate office, at Mumbai. The facility is further secured by personal guarantee of Directors of the Company and carries interest @ (KMBR-as on date 9.50%) 1% with a minimum of 10.5%.

Notes : The information regarding dues to Micro Small and Medium Enterprises have been determined on the basis of information available with the company.

*Disclosures required under Sec 22 of MSMED Act, 2006

Note 28 : Contingent liabilities

(i) Letter of credit outstanding Rs. Nil (P.Y. Rs. 368.66 lacs).

(ii) Bank guarantee outstanding Rs. 190.63 lacs (P.Y. Rs. 243.8 lacs).

(iii) Disputed statutory liabilities:

(a) Securities and Exchange Board of India (SEBI) has passed an Adjudication Order on January 12, 2015 against the Company and its directors/officials. As per the said Order, a penalty of Rs 1 crore is imposed on the Company and Rs 10.8 crores on five other persons comprising of three directors and two former officials of the Company. This is on account of certain irregularities in its IPO covering the period from June 2011 to September 2011.

The Company has filed an Appeal against the Order of SEBI before the Securities Appellate Tribunal and awaiting its decision.

(b) Disputed Income Tax demand - matters under appeal : Rs. 1,740.23 lacs (P.Y. Rs. 1,400.72 lacs).

The Company has received Notice of Demand u/s 156 of the Income Tax Act, 1961 for A.Y 2012-13 and A.Y. 2013-14 of Rs. 1,400.72 lacs and Rs. 339.51 lacs respectively. The Company has filed an appeal against the same, and has paid Rs. 665.58 lacs including adjustment for MAT credit of Rs. 307.62 lacs under protest which is disclosed under "Long term loan and advances".

Note 29: Commitments

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances already made) and not provided for isRs. 65.46 lacs (P.Y. 1,193.05 lacs).

(ii) EPCG commitment outstanding: Rs. 449.16 lacs (P.Y. Rs. 449.16 lacs).

The Company has obtained license under Export Promotion Capital Goods Scheme (EPCG) for purchase of capital goods on zero percent custom duty. Under the EPCG the Company needs to fulfill certain export obligations, failing which, it is liable for payment of custom duty. Total Export obligations amounts to Rs. 3,163.29 lacs (P.Y. Rs. 3,163.29 lacs) out of which Rs. 1,289.95 lacs needs to be fulfilled within 6 years & Rs. 1,873.34 lacs needs to be fulfilled within 8 years from the date of purchase of respective Capital Goods.

Note 30 : In the opinion of the Board, Current Assets, Loans & Advances are realizable in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

Note 31 : Depreciation

The Company has revised depreciation rates on tangible fixed assets w.e.f. April 01, 2014 as per the useful life specified in the Schedule II of the Companies Act, 2013 or as re-assessed by the Company. As prescribed in Schedule II, an amount of Rs 5.52 lacs (net of deferred tax) has been charged to the opening balance of retained earnings for the assets in respect of which the remaining useful life is NIL as on April 01, 2014 and in respect of other assets on that date, depreciation has been calculated based on the remaining useful life of those assets.

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

(i) Changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof:

Note 1: Segment Reporting

The Company is mainly engaged in the business of "Manufacturing of Drugs & Pharmaceutical" and there is no other reportable business segment as per Accounting Standard (AS-17) issued by The Institute of Chartered Accountants of India.

Note 2: Related Party Disclosures

a. List of Related Parties :

(i) Directors

Mr. Atul Ranchal (Chairman)

Mr. Rajesh Mahajan (Managing Director)

Dr. Durga Shankar Maity (CEO cum Technical Director)

(ii) Key Managerial Personnel

Mr. Ketan Shah (Chief Financial Officer) (upto 9th October, 2014)

Mr. Anil Kumar Pillai (Chief Financial Officer) (from 1st November, 2014)

Ms. Ashima Bnodha (Company Secretary) (upto 16th June, 2014)

Mr. Ankit Parekh (Company Secretary) (upto 20th June, 2015) Mrs. Jyoti Sancheti (Company Secretary) (From 23rd November2015)

(iii) Relative of Directors with whom the Company has entered into transaction

Mrs. Saras Gupta

Mrs. Rajani Ranchal Mrs. Davinder Kumari

Note 3 : Corporate Social Responsibility

During the year the Company has incurred expenditure towards CSR activities and has spent Rs. 6.09 lacs (as stated below) as against Rs. 34.61 lacs as required by section 135 read with Schedule VII of the Companies Act, 2013.

Note 4 : The Company had raised an amount of Rs. 6300.00 lacs through an IPO of equity shares during the financial year 2011-12, by way of 63.00 lacs Equity Shares of Rs 10/- at a premium of Rs 90/- per share. The said proceeds has been fully utilized over the years (including current year) in terms of the offer document for the purpose of setting up a new manufacturing unit in Gujarat, general corporate purpose and meeting IPO expenses.

Note 5 : The Company has re-grouped, reclassified and/or re-arranged previous year''s figures, wherever necessary to confirm to current year''s classification.


Mar 31, 2015

Note 1 : Contingent liabilities

(i) Letter of credit outstanding Rs, 368.66 lacs (P.Y. Rs, 246.49 lacs).

(ii) Bank guarantee outstanding Rs, 243.8 lacs (P.Y. Rs, 187.63 lacs).

(iii) Disputed statutory liabilities:

(a) Securities and Exchange Board of India (SEBI) has passed an Adjudication Order on January 12, 2015 against the Company and its directors/offcials. As per the said Order, a penalty of Rs 1 crore is imposed on the Company and Rs 10.8 crores on fve other persons comprising of three directors and two former offcials of the Company. This is on account of certain irregularities/ fraudulent activities in its IPO covering the period from June 2011 to September 2011.

The Company has fled an Appeal against the Order of SEBI before the Securities Appellate Tribunal and awaiting its decision.

(b) Disputed Income Tax demand - matters under appeal : Rs, 1,400.72 lacs.

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances already made) and not provided for is Rs, 1,193.05 lacs (P.Y. 1.58 lacs).

(ii) EPCG commitment outstanding : Rs, 449.16 lacs (P.Y. Rs, 449.16 lacs).

The Company has obtained license under Export Promotion Capital Goods Scheme(EPCG) for purchase of capital goods on zero percent custom duty. Under the EPCG the Company needs to fulfll certain export obligations, failing which, it is liable for payment of custom duty. Total Export obligations amounts to Rs, 3,163.29 lacs (P.Y. Rs, 3,163.29 lacs) out of which Rs, 1,289.95 lacs needs to be fulfilled within 6 years & Rs, 1,873.34 lacs needs to be fulfilled within 8 years from the date of purchase of respective Capital Goods.

Note 2 : In the opinion of the Board, Current Assets, Loans & Advances are realizable in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

Note 3 : Depreciation

Effective from 1st April,2014 the Company has charged depreciation on its fixed assets based on their useful life as stipulated under Schedule II of the Companies Act, 2013. Due to this, the depreciation for the year ended on 31st March, 2015 is higher by Rs, 25.25 lacs as compared to the depreciation computed under the provisions of the Companies Act, 1956. Further, based on the transitional provisions as provided in Note 7(b) of Schedule II, Rs, 8.17 lacs is adjusted against opening balance of Retained Earnings.

Note 4 : Related Party Disclosures

a. List of Related Parties : i) Directors

Mr. Atul Ranchal (Chairman)

Mr. Rajesh Mahajan (Managing Director)

Dr. Durga Shankar Maity (CEO cum Technical Director) ii) Key Managerial Personnel

Mr. Ketan Shah (Chief Financial Officer) (upto 9th October, 2014)

Mr. Anil Kumar Pillai (Chief Financial Officer) (from 1st November, 2014)

Ms. Ashima Bnodha (Company Secretary) (upto 16th June, 2014)

Mr. Ankit Parekh (Company Secretary) (from 1st August, 2014) iii) Relative of Directors with whom the Company has entered into transaction

Mrs. Saras Gupta

Mrs. Rajani Ranchal

Mrs. Davinder Kumari

Note 5 : The financial statements for the year ended 31st March, 2014 were audited by another form of Chartered Accountants and the same has been reclassified, wherever considered necessary, to conform with the current year's presentation. Figures wherever not available/ furnished in last year's financial statements have not been given and hence are not strictly comparable.


Mar 31, 2014

1. 91,20,112(PY91,20,112) Shares out of Issued, Subscribed and Paid up Share Capital were alloted as Bonus Shares in last five years by Capitalization of Reserves.

2. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act,2006 and, hence, disclosures relating to amounts unpaid as at the end together with interest paid/payable under this Act has not been given.

3. Other Payable includes amounts payble on account of EPF, ESI, Salary Payable, Telephone exp.etc.

4. Inventories are valued as per method described in significant Accounting Policies.

5. The Company has sent letters to parties to confirm their balances, but only few parties have responded so far. Hence Debtor balances appearing in the Balance Sheet are subject to their Reconciliation.

6. As per Accounting Standard 15"Employee Benefits", the disclosures as defined in the Accounting Standard are given below:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method , which recognises each period of service as giving rise to additional unit.

7 : The company operates only in one business segment viz. "Pharmaceutical Formulation" Since in the opinion of management, the inherent nature of activities engaged by the company are governed by the same set of risks and rewards, so these have been grouped and identified as a single segment in accordance with the Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

8 : During the year company has undertaken a review of all Fixed Assets in line with the requirements of AS-28 on "Impairement of Assets" issued by the Institute of Chartered Accountants of India. Based on such review, no provision for impairement is required to be recognized for the year.


Mar 31, 2012

1.1 91.20,112( PY 91,20,112) Shares out of Issued , Subscribed and Paid up Share Capital were alloted as Bonus Shares in last five years by Capitalization of Reserves

1.2 During the financial year 2011-12 , the Company has raised a sum of Rs 63,00,00,000 through issue of 63,00,000 Equity Shares of Rs 10/- each at a premium of Rs 90/- per share. The issue was made through Book Building Process.

2.1 The Company has not recevied information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act,2006 and, hence, disclosures relating to amounts unpaid as at the end together with interest paid/payable under this Act has not been given.

3.1 As per Accounting Standard 15"Employee Benefits", the disclosures as defined in the Accounting Standard are given below:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method , which recognises each period of service as giving rise to additional unit

4 The company operates only in one business segment viz. "Pharmaceutical Formulation"

Since in the opinion of management, the inherent nature ot activities engaged by the company are governed by the same set of risks and rewards, so these have been grouped and identified as a single segment in accordance with the Accounting Standard on Segment Reporting (AS-17) issued by ICAf.


Mar 31, 2011

1. The figures for the year have been re-grouped / re-arranged /.re-cast wherever necessary t market it comparable.

2. The company has sent letters of balance confirmation to all the parties but only a few have responded so far. So the balance in the party accounts whether in debit or in credit subject to reconciliation.

3. A sum of Rs.69,125 (Previous Year Rs.1,15,125 ) is due from Staff of the company being imprest for traveling, conveyance and other charges.

4. Fixed deposits with banks of Rs.60,99,000.00 (previous year Rs. 78,42,256) as pledged as Margin Money with banks.

5. Remittance in foreign currency on account of Dividend is ML (P/YML)

6. The company operates only in one business segment viz, "Pharmaceutical Formulation*' and is engaged in manufacturing and trading of medicines. Since in the opinion of management, the inherent nature of activities "engaged by the .company are governed by the same set of risks -and rewards, so these have been grouped and identified as a single segment in accordance with the Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

7. In the opinion of die board, and to the best of their knowledge and belief* the value on realisation of the current assets, loans & advance shown In the Balance Sheet in die ordinary course of business will be at least equal to the amount at which they are stated in the Balance Sheet and provision for all known and determined liabilities has been made- It. Some of suppliers of material have been identified as small scale industrial undertaking on the basis of information available with the company. However none of these parties has an outstanding credit balance exceeding Rs.1,00,000.00 as on 31.03,2011

8. Contingent Liabilities;. (Not provided for in the books of accounts)

Current Year Previous Year

(a) Letter of Credit outstanding $5,24J Lacs - (Appx Rs.233.64 lacs)

9. During the year, the company has undertaken a review of ail fixed assets in line with the requirements of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountant of India. Based on such review, no' provision for impairment is required to be recognized for the year.

10, "He figures in the Balance Sheet and Profit & Loss Account for the year have been rounded off to nearest multiple of rupee.

11 The company-has provided a Provision for gratuity and leave encasement as per valuation which was done as required under accounting standard (AS-15) "accounting for retirement benefits" by an independent Aetuarian valuer.

12, Additional information pursuant to the provision of paragraph 3,4C & 4D of Part 11 of schedule VI of the Companies Act, 1956. (as certified by the management)

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