Home  »  Company  »  Cadila Healthcar  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Cadila Healthcare Ltd.

Mar 31, 2014

I-Company overview:

Cadila Healthcare Limited ["the Company"] operates as an integrated pharmaceutical company with business encompassing the entire value chain in the development, production, marketing and distribution of pharmaceutical products. The product portfolio of the Company includes API, veterinary and human formulations. The Company''s shares are listed on the National Stock Exchange of India Limited [NSE], Bombay Stock Exchange Limited [BSE] and the Ahmedabad Stock Exchange Limited [ASE].

Note: 1-Deffered Tax:

A The Net Deferred Tax Liabilities of Rs. Nil [Previous Year: Rs. 4 Millions] for the year has been provided in the statement of Profit and Loss.

B The Company has substantial unabsorbed depreciation allowances available for set off in future for an indefinite period. Based on the review of the business plan, there is a convincing evidence that there would be sufficient future taxable income against which such deferred tax assets can be realised. However, as a matter of prudence, such deferred tax assets are recognised only to the extent of net deferred tax liability arising for the year.

INR - Millions

As at March 31

2014 2013

Note: 2-Contingent Liabilities and commitments [to the extent not provided for]:

A Contingent Liabilities:

a Claims against the Company not acknowledged as debts [Net of advance of Rs. 4 {Previous Year: Rs. 5} Millions]

[Including Rs. 2 {as at March 31, 2013: Rs. 1} Millions in respect of Amalgamated {*} Companies] 92 89

b i In respect of guarantees given by Banks and/ or counter guarantees given by the Company 32 84

ii In respect of letter of comforts/ corporate guarantees given by the Company to Banks for the outstanding dues of loans availed by some of the subsidiary companies 11,095 10,510

c Other money for which the company is contingently liable:

i In respect of the demands raised by the Central Excise, State Excise & Service Tax Authority [Net of advance of Rs. 11 {Previous Year: Rs. 11} Millions]

[Including Rs. 9 {as at March 31, 2013: Rs. 9} Millions in respect of Amalgamated {*} Companies] 258 184

ii In respect of the demands raised by the Ministry of Chemicals & Fertilizers, Govt. of India under Drug Price Control Order, 1979/ 1995 for difference in actual price and price of respective bulk drug allowed while fixing the price of certain formulations and disputed by the Company, which the Company expect to succeed based on the legal advice [Net of advance of Rs. 264 {Previous Year: Rs. 144} Millions]

[Including Rs. 49 {as at March 31, 2013: Rs. 49} Millions in respect of Amalgamated {*} Companies] 227 184

iii In respect of Income Tax matters pending before appellate authorities which the Company expects to succeed, based on decisions of Tribunals/ Courts [Net of advance of Rs. 33

{Previous Year: Rs. 74} Millions] 28 25

iv In respect of Sales Tax matters pending before appellate authorities/ Court which the Company expects to succeed, based on decisions of Tribunals/ Courts [Net of advance of Rs. 50 {Previous Year: Rs. 50} Millions] 55 41

v Letters of Credit for Imports 56 50

vi The Company has imported certain capital equipment at concessional rate of custom duty under "Export promotion of Capital Goods Scheme" of the Central Government. The Company has undertaken an incremental export obligation to the extent of US $ 10 Millions [equivalent to Rs. 611 Millions approx. {Previous Year: US $ 35 Millions (equivalent to Rs. 1,905 Millions approx.)}] I to be fulfilled during a specified period as applicable from the date of imports. The unprovided liability towards custom duty payable thereon in respect of unfulfilled export obligations 102 366

[*] represents contingent liabilities taken over by the Company under the Scheme of Arrangement and Amalgamation of Cadila Laboratories Limited, and erstwhile Cadila Chemicals Limited, Cadila I Antibiotics Limited, Cadila Exports Limited and Cadila Veterinary Private Limited with the Company I w.e.f. June 1, 1995.

B Commitments:

a Estimated amount of contracts remaining to be executed on capital account and not provided for [Net of Advances of Rs. 59 {Previous Year: Rs. 90} Millions] 477 779

Note: 3- Proposed Dividends:

The Board of Directors, at its meeting held on May 16, 2014, recommended the final dividend of Rs. 9/- per equity share of Rs. 5/- each.

Note: 4-Segment Information:

Segment Information has been given in the Consolidated Financial Statements of the Company. Hence, as per Accounting Standard- 17 issued by the Institute of Chartered Accountants of India, no separate disclosure on segment information is given in these financial statements.

Note: 5

In terms of the Scheme of Amalgamation [the Scheme] of Liva Healthcare Limited, Zydus Animal Health Limited and Zydus Pharmaceuticals Limited [transferor companies], which was sanctioned by the Orders of the Hon''ble High Court of Gujarat, effective date under the Scheme being August 26, 2013, transferor companies have been amalgamated with the Company w.e.f. the appointed date under the Scheme, being April 1, 2012.

Note: 6

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated February 8, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to exemption. Necessary information relating to subsidiaries has been included in the Consolidated Financial Statements.

Note: 7

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classifications/ disclosure.


Mar 31, 2013

1-Company overview:

Cadila Healthcare Limited ["the Company"] operates as an integrated pharmaceutical company with business encompassing the entire value chain in the development, production, marketing and distribution of pharmaceutical products. The product portfolio of the Company includes API, veterinary and human formulations. The Company''s shares are listed on the National Stock Exchange of India Limited [NSE], Bombay Stock Exchange Limited [BSE] and the Ahmedabad Stock Exchange Limited [ASE].

Note: 2-Interim Dividends:

The Board of Directors, at its meeting held on May 30, 2013, has declared an interim dividend of Rs. 7.50 per equity share of Rs. 5/- each.

Note: 3-Segment Information:

Segment Information has been given in the Consolidated Financial Statements of the Company. Hence, as per Accounting Standard-17 issued by the Institute of Chartered Accountants of India, no separate disclosure on segment information is given in these financial statements.

Note: 4-Related Party Transactions:

A Name of the Related Parties and Nature of the Related Party Relationship:

a Subsidiary Companies/ Concerns:

Dialforhealth India Limited

Dialforhealth Unity Limited

Dialforhealth Greencross Limited

German Remedies Limited

Zydus Pharmaceuticals Limited [#]

Zydus Animal Health Limited [#]

Zydus Wellness Limited

M/s. Zydus Wellness-Sikkim, a Partnership Firm

Liva Healthcare Limited [#]

Zydus Technologies Limited

Biochem Pharmaceutical Industries Limited

M/s. Zydus Healthcare, a Partnership Firm

Zydus Lanka (Private) Limited [Sri Lanka]

Zydus International Private Limited [Ireland]

Zydus Netherlands B.V. [the Netherlands]

Zydus France, SAS [France]

Etna Biotech S.R.L. [Italy]

Zydus Pharmaceuticals (USA) Inc. [USA]

Nesher Pharmaceuticals (USA) LLC [USA]

Zydus Healthcare (USA) LLC [USA]

Zydus Noveltech Inc. [USA]

Hercon Pharmaceuticals LLC [USA]

Zydus Healthcare S.A. (Pty) Ltd [South Africa]

Simayla Pharmaceuticals (Pty) Ltd [South Africa]

Script Management Services (Pty) Ltd [South Africa]

Zydus Nikkho Farmaceutica Ltda. [Brazil]

Zydus Pharma Japan Co. Ltd. [Japan]

Laboratorios Combix S.L. [Spain]

Zydus Pharmaceuticals Mexico SA De CV [Mexico]

Zydus Pharmaceuticals Mexico Services Company SA De C.V.[Mexico]

ZAHL B.V. [the Netherlands]

ZAHL Europe B.V. [the Netherlands]

Bremer Pharma GmbH [Germany]

b Joint Venture Companies:

Zydus BSV Pharma Private Limited

Zydus Takeda Healthcare Private Limited

[Formerly known as Zydus Nycomed Healthcare Private Limited]

Zydus Hospira Oncology Private Limited

Bayer Zydus Pharma Private Limited

c Directors and their relatives:

Shri Pankaj R. Patel

Dr. Sharvil P. Patel

Chairman & Managing Director [ C.M.D. ]

Deputy Managing Director & son of C.M.D.

d Enterprises significantly influenced by Directors and/ or their relatives:

Cadmach Machinery Company Private Limited

Zydus Hospitals and Healthcare Research Private Limited

Zydus Hospitals (Vadodra) Private Limited

Zydus Hospitals (Rajkot) Private Limited

MabS Biotech Private Limited

Zydus Infrastructure Private Limited

Cadila Laboratories Private Limited

Pripan Investment Private Limited

Western Ahmedabad Effluent Conveyance Company Private Limited Zest Aviation Private Limited Zandra Infrastructure LLP Zydus Hospital LLP M/s. C. M. C. Machinery M/s. Cadam Enterprises

Note: 5

A In terms of the Scheme of Amalgamation [the Scheme] of:

a Liva Healthcare Limited [LHL] is engaged in the business of marketing and distribution of pharmaceutical products,

b Zydus Animal Health Limited [ZAHL] is engaged in the business of manufacturing, marketing and distribution of veterinary pharmaceutical products, and c Zydus Pharmaceuticals Limited [ZPL] was engaged in the business of distribution of drugs and pharmaceuticals products in earlier years [all three wholly owned subsidiaries of the Company, collectively referred to as the Transferor Companies] which was sanctioned by the Orders of the Hon''able High Court of Gujarat dated August 23, 2013, effective date under the Scheme being August 26, 2013, Transferor Companies have been amalgamated with the Company w.e.f. the Appointed Date under the Scheme, being April 1, 2012.

B In accordance with the Scheme,

a All the assets and liabilities of the Transferor Companies stand transferred to and vested in the Company with effect from the Appointed Date at their carrying amounts appearing in the books of the Transferor Companies except:

i in case of land and buildings, which are recorded at their estimated market values as at the Appointed Date,

ii adjustments are made wherever necessary to conform to the accounting policies and methods adopted by the Company.

b The amalgamation has been accounted under the "Purchase Method" in terms of Accounting Standard [AS] - 14 on "Accounting for

Amalgamations".

c All the issued equity shares of LHL, ZAHL and ZPL held by the company have been extinguished.

d The shortfall in the aggregate value of the assets over the aggregate value of the liabilities of the Transferor Companies taken over by the Company, after adjusting carrying amount of investments in the Transferor Companies held by the Company as on the Effective Date has been debited to Goodwill account to the extent of Rs. 102 Millions. e Such goodwill arising on account of amalgamation as referred to in clause (d) above will be amortised over a period of five years in compliance with the accounting treatment as prescribed under AS - 14 referred earlier. f Pending completion of the formalities of transfer of titles of some of the assets taken over under the Scheme, such assets remain included in the books of the Company under the name of the respective Transferor Companies.

C In view of the aforesaid Scheme of Amalgamation w.e.f. April 1, 2012, the figures of the current year are not comparable with those of Previous year.

Note: 6

The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated February 8, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to exemption. Necessary information relating to subsidiaries has been included in the Consolidated Financial Statements.

Note: 7

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classifications/ disclosure.


Mar 31, 2012

A Securities and Terms of Repayment for Secured Long Term Borrowings: a Debentures:

The Company has issued the following Secured Redeemable Non-convertible Debentures ["Debentures"]:

i 500 debentures each of Rs. 1 Million allotted on December 4, 2009, which carry interest rate of 8.5% p.a. payable on half- yearly basis. These debentures are redeemable at par at the end of five years from the date of allotment.

ii 1,750 debentures each of Rs. 1 Million allotted on July 14, 2011, which carry interest rate of 9.7% p.a., payable on half-yearly basis. These debentures are redeemable at par at the end of five years from the date of allotment, with an option to the Company for redemption at the end of third year from the date of allotment. If the Company exercises its option, these debentures will be redeemed at the end of third year from its date of allotment.

These debentures are secured by way of mortgage on specific trade mark[s] and pari-passu charge on land of the Company situated at village Manipur in the State of Gujarat.

b Rupee Term Loans:

Rupee Term Loan of Rs. 750 Millions is secured by an equitable mortgage of immovable properties and hypothecation of movable plant and machineries of the Company's Formulation Unit at village Moraiya in the State of Gujarat on pari-passu basis with other lenders. The loan is further secured by way of a hypothecation of a specific brand. The loan is repayable in three yearly installments each of Rs. 250 Millions after a moratorium period of three years from the date of its origination [April 29, 2009] along with accrued interest for the period. Interest rates are reset at the end of each six months from the date of origination, at the rate applicable for 5 years Government Security yield 3.45% p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 750 [as at March 31, 2011: Rs. 750] Millions.

c Foreign Currency Loans:

i External Commercial Borrowing [ECB] of USD 8 Millions was secured by an equitable mortgage of immovable properties and hypothecation of movable plant and machineries of the Company's Formulation Unit at village Moraiya in the State of Gujarat on pari-passu basis with other lenders. The loan was repayable in six half yearly installments, with first five installments each of Rs. 45 Millions [USD 1 Million] and the sixth installment of Rs. 132 Millions [USD 3 Millions] after a moratorium period of forty two months from the date of its origination [December 29, 2008] along with accrued interest for the period. Interest rates are reset every three months at the rate of 3 months USD LIBOR plus 450 bps p.a. The loan was fully repaid on September 29, 2011 [as at March 31, 2011: Rs. 357 Millions].

ii External Commercial Borrowing [ECB] of USD 10 Millions was secured by hypothecation on movable plant and machineries of the Company's Formulation Unit at village Moraiya in the State of Gujarat on pari-passu basis with other lenders. The loan is further secured by way of hypothecation on a specific trade mark of the Company. The loan was repayable in three equal installments at the end of third, fourth and fifth year from the date of its origination [May 14, 2009] along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 450 bps p.a. The loan was fully repaid on September 15, 2011 [as at March 31, 2011: Rs. 446 Millions].

iii External Commercial Borrowing [ECB] of USD 10 Millions was secured by hypothecation on movable plant and machineries of the Company's Formulation Unit at village Moraiya in the State of Gujarat on pari-passu basis with other lenders. The loan is further secured by way of hypothecation on a specific trade mark of the Company. The loan was repayable in three equal installments at the end of second, third and fourth year from the date of its origination [2nd February 2010] along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 235 bps p.a. The loan was fully repaid on March 22, 2012 [as at March 31, 2011: Rs. 446 Millions].

iv External Commercial Borrowing [ECB] of USD 10 Millions is secured by an equitable mortgage of immovable properties and hypothecation of movable plant and machineries of the Company's API Unit at village Dabhasa/ Umraya in the State of Gujarat. The loan is further secured by way of hypothecation on a specific trade mark of the Company. The loan is repayable in five half yearly installments after initial moratorium period of four years from the date of its origination [April 5, 2007] along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 71.5 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 305 [as at March 31, 2011: Rs. 446] Millions.

v External Commercial Borrowing [ECB] of USD 27 Millions is secured by hypothecation of specific trademarks of the Company. The loan is repayable in three half yearly equal installments starting from April 12, 2012 along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 77.5 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 1374 [as at March 31, 2011: Rs. 1205] Millions.

vi External Commercial Borrowing [ECB] of USD 15 Millions is secured by hypothecation of a specific trade mark of the Company. The loan is repayable on the maturity of loan at the end of five years and one day from the date of its origination [August 19, 2010] along with accrued interest for the period. Interest rates are reset every three months at the rate of 3 months USD LIBOR plus 275 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 764 [as at March 31, 2011: Rs. 670] Millions.

vii External Commercial Borrowing [ECB] of USD 8 Millions is secured by hypothecation of a specific trade mark of the Company. The loan is repayable in six half yearly installments, first five installments each of Rs. 51 Millions [USD 1 Million] and the last installment of Rs. 152 Millions [USD 3 Millions] to commence from June 29, 2012 along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 160 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 407 [as at March 31, 2011: Nil] Millions.

viii External Commercial Borrowing [ECB] of USD 15 Millions is secured by hypothecation of a specific trade mark of the Company. The loan is repayable in three half yearly installments after initial moratorium period of five years from the date of its origination [October 17, 2011] along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 205 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 764 [as at March 31, 2011: Nil] Millions.

ix External Commercial Borrowing [ECB] of USD 20 Millions is secured by English mortgage of immovable properties and hypothecation of movable plant and machineries of the Company's Formulation Unit at village Moraiya in the State of Gujarat on pari-passu basis with other lenders. The loan is repayable in five half yearly installments each of Rs. 204 Millions [USD 4 Millions] after a moratorium period of 30 months from the date of its origination [November 15, 2011] along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 145 bps p.a. Facility fees of 0.72% to be paid in 4 equal installments with first four interest payment date. The outstanding amount of loan as at March 31, 2012 is Rs. 1018 [as at March 31, 2011: Nil] Millions.

x External Commercial Borrowing [ECB] of USD 6.67 Millions will be secured by hypothecation of specific trademarks] of the Company. The loan is repayable in two equal yearly installments starting from February 2, 2013 along with accrued interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 150 bps p.a. The outstanding amount of loan as at March 31, 2012 is Rs. 340 [as at March 31, 2011: Nil] Millions.

B Terms of Repayment for Unsecured Long Term Borrowings:

a Interest Free Deemed loan against deferment of sales tax from a financial institution is guaranteed personally by the Chairman and Managing Director of the Company and another loan is interest free sales tax deferred loan, repayable in seven equal installments starting from May 30, 2009. The outstanding amount as at March 31, 2012 is Rs. 213 [as at March 31, 2011: Rs. 285] Millions.

b Loan from Department of Science and Technology is repayable in ten yearly equal installments starting from November 1, 2012 along with interest @ 3% p.a. Interest accrued up to October 31, 2012 will be payable in 5 yearly installments along with repayment installment starting from November 1, 2012. The outstanding amount as at March 31, 2012 is Rs. 38 [as at March 31, 2011: Rs. 38] Millions.

c External Commercial Borrowing [ECB] of USD 10 Millions is repayable in three equal yearly installments starting from May 14, 2012 along with interest for the period. Interest rates are reset every six months at the rate of 6 months USD LIBOR plus 150 bps p.a. The outstanding amount as at March 31, 2012 is Rs. 509 [as at March 31, 2011: Nil] Millions.

Disclosure pursuant to Accounting Standard-15 [Revised] "Employee Benefits": Defined benefit plan and long term employment benefit A General description:

Leave wages [Long term employment benefit]:

The leave encashment scheme is administered through Life Insurance Corporation of India's Employees' Group Leave Encashment cum Life Assurance [Cash Accumulation] scheme. The employees of the company are entitled to leave as per the leave policy of the company. The liability on account of accumulated leave as on last day of the accounting year is recognised [net of the fair value of plan asset as at the balance sheet date] at present value of the defined obligation at the balance sheet date based on the actuarial valuation carried out by an independent actuary using projected unit credit method.

Gratuity [Defined benefit plan]:

The Company has a defined benefit gratuity plan. Every employee who has completed continuous services of five years or more, gets a gratuity on death or resignation or retirement at 15 days salary [last drawn salary] for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Note: 1-Foreign Currency Monetary Items Translation Difference Account:

The Company had opted for accounting the exchange rate differences arising on the Long Term Foreign Currency Monetary Items [LTFCMI] in accordance with the notification dated March 31, 2009 under the Companies [Accounting Standards] Amendment Rules, 2009 on Accounting Standard 11 relating to "the effects of changes in foreign exchange rates". Accordingly, the effects of exchange rate differences arising from long term foreign currency loans availed for funding acquisition of fixed assets have been adjusted to the cost of respective items of fixed assets. While, in other cases, such exchange rate difference on the LTFCMI is transferred to "Foreign Currency Monetary Items Translation Difference Account" [FCMITDA], which is amortised during the tenure of the respective LTFCMI but not beyond March 31, 2020.

INR - Millions

Figures as at end of Current Reporting Previous Reporting Period Period

March 31 2012 2011

Note: 2-Contingent Liabilities and commitments [to the extent not provided for]:

A Contingent Liabilities:

a Claims against the Company not acknowledged as debts [Including Rs. 1 {as at March 31, 2011: Rs. 1} Million in respect of Amalgamated {*} Companies] 57 57

b i In respect of guarantees given by Banks and/or counter guarantees given by the Company 151 150

ii In respect of letter of comforts/ corporate guarantees given by the Company to Banks for the outstanding dues of loans availed by some of the subsidiary companies and a joint venture company 8,752 4,643

c Other money for which the company is contingently liable:

i In respect of the demands raised by the Central Excise, State Excise & Service Tax Authority [Including Rs. 9 {as at March 31, 2011: Rs. 9} Millions in respect of Amalgamated {*} Companies] 41 40

ii In respect of the demands raised by the Ministry of Chemicals & Fertilizers, Govt. of India under Drug Price Control Order, 1979/1995 for difference in actual price and price of respective bulk drug allowed while fixing the price of certain life saving formulations and disputed by the Company, which the Company expect to succeed based on the legal advice [Including Rs. 51 {as at March 31, 2011: Rs. 51} Millions in respect of Amalgamated {*} Companies] 328 319

iii In respect of Income Tax matters pending before appellate authorities which the Company expects to succeed, based on decisions of Tribunals/ Courts. 917 66

iv In respect of Sales Tax matters pending before appellate authorities/ Court which the Company expects to succeed, based on decisions of Tribunals/ Courts. 36 93

v Letters of Credit for Imports 46 2

vi The Company has imported certain capital equipment at concessional rate of custom duty under "Export promotion of Capital Goods Scheme" of the Central Government. The Company has undertaken an incremental export obligation to the extent of US $ 19 Millions [equivalent to Rs. 971 Millions approx.{Previous reporting period: US $ 4 (equivalent to Rs. 163 Millions approx.)}] to be fulfilled during a specified period as applicable from the date of imports. The unprovided liability towards custom duty payable thereon in respect of unfulfilled export obligations 156 5

[*] represents contingent liabilities taken over by the Company under the Scheme of Arrangement and Amalgamation of Cadila Laboratories Limited, and erstwhile Cadila Chemicals Limited, Cadila Antibiotics Limited, Cadila Exports Limited and Cadila Veterinary Private Limited with the Company w.e.f. June 1, 1995. B Commitments:

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

[Net of Advances] 2,082 651

Note: 3-Dividends proposed to be distributed:

The Board of Directors, in its meeting held on May 10, 2012, recommended the final dividend of Rs. 7.50 per equity share of Rs. 5/- each.

B i For accounting of derivative instruments the company has been following Accounting Standard 11 "The effects of changes in foreign exchange rates" issued by Institute of Chartered Accountants of India ("ICAI"). However, pursuant to ICAI Announcement on "Accounting for Derivatives" and recommendation for early adoption of Accounting Standard 30 "Financial Instruments: Recognition and Measurement", the Company has voluntarily adopted the Standard with effect from October 1, 2011. The company has designated derivative instruments and non derivative financial liabilities as cash flow hedge. This has resulted in change in accounting policy followed by the company. Consequent to this, the Company's net profit after tax for the reporting period is higher by Rs. 24 Millions. ii The effective portion on fair valuation of derivative instruments and non derivative financial liabilities designated as cash flow hedge, amount to Rs. 275 Millions is shown under "Hedge Reserve" under "Reserves and Surplus".

Note: 4-Segment Information:

Segment Information has been given in the Consolidated Financial Statements of the Company. Hence, as per Accounting Standard-17 issued by the Institute of Chartered Accountants of India, no separate disclosure on segment information is given in these financial statements.

Note: 5 The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated February 8, 2011 and February 21, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to exemption. Necessary information relating to subsidiaries has been included in the Consolidated Financial Statements.

Note: 6 The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous reporting period's figures have been regrouped/ reclassified wherever necessary to correspond with the current reporting period's classifications/ disclosure.


Mar 31, 2010

1 The Company has opted for accounting the exchange rate differences arising on the Long Term Foreign Currency Monetary Items [ LTFCMI ] in accordance with the notification dated March 31,2009 under the Companies 1 Accounting Standards ] Amendment Rules, 2009 on Accounting Standard 11 relating to "the effects of changes in foreign exchange rates". Accordingly, the effects of exchange rate differences arising from long term foreign currency loans availed for funding acquisition of fixed assets have been adjusted to the cost of respective items of fixed assets. While, in other cases, such exchange rate difference on the LTFCMI is transferred to "Foreign Currency Monetary Items Translation Difference Account [FCMITDA J, which is amortised during the tenure of the respective LTFCMI but not beyond March 31,2011.

2 During February, 2010, a fire broke at one of the warehouse of the Company. The Company is in process of lodging a claim with the insurance company, amounting to Rs. 195 Millions [ Mio ] as estimated by the company. Pending the final settlement this has been shown as "Insurance Claim Receivable" under "Loans & Advances". The difference, if any, on settlement of claim wilt be effected in Profit and Loss account.

3 The grant-in-aid received amounting to Rs. 39 million from Ozone Cell, Ministry of Environment and Forests for meeting the expenditure incurred towards activities carried out in relation to phasing out of Chlorofiuorocabons (CFCs) in the manufacture of Pharmaceutical Metered Dose Inhalers (MDIs) is treated as revenue in nature and accordingly is shownunder the head "Other Income" in the Profit and Loss Account.

4 The Company has imported certain capital equipments at concessional rate of custom duty under "Export Promotion of Capital Goods Scheme" of the Central Government. The Company has undertaken an incremental export obligation to the extent of US $ 2 Millions {equivalent to Rs. 105 Millions Approx.} [ Previous Year US $ 0.15 {equivalent to Rs. 8 Millions approx.} ] to be fulfilled during a specified period as applicable from the date of imports. The liability towards custom duty payable thereon in respect of unfulfilled export obligations as on March 31, 2010 of Rs. 17 [ as at 31-03-09 Rs. 13 ] Millions is not provided for.

5 The Company has taken various residential / office premises / godowns under operating lease or leave and license agreement. The lease terms in respect of such premises are on the basis of individual agreement entered into with the respective landlords. The Company has given refundable interest free security deposit in accordance with the agreed terms. The lease payments are recognised in the profit and loss account under" Rent" in schedule 16.

6 The Company has invested Rs. 50 Millions and given loans & advances of Rs. 131 [ As at 31-03-09 Rs. 122 ] Millions to Dialforhealth India Ltd. [DIL], a wholly owned subsidiary of the Company. The accumulated losses as at March 31, 2010 amounting to Rs. 105 f As at 31-03-09 Rs. 102 ] Millions has exceeded the net worth of DIL. However having regard to the long term strategic investment, the diminution in the value of investments in DIL is considered to be temporary and loans and advances are considered good and accordingly no provision has been made.

7 A Provision for product warranty claims in respect of the products sold during the year is made on the basis of managements estimation of probable customer claims in respect thereof considering the estimated stock lying with retailers. The Company does not expect any reimbursement of such claims in future.



8 Contingent liabilities not provided for: INR-Millions

As at March 31.

2010 2009

A In respect of guarantees given by Banks and counter guarantees given by the Company. 135 107

B In respect of letter of comforts / corporate guarantees given by the Company to Banks for the outstanding dues of loans availed by some of the subsidiary companies and a joint venture company 4294 4154

C Claims against the Company not acknowledged as debts [ Including Rs. 8 {as at 31-03-09 Rs. 8} Millions in respect of Amalgamated {*} Companies ] 68 57

D In respect of the demand raised by the Central Excise, State Excise & Service Tax dept. against which the Company has preferred an appeal. The Company has been legally advised that the demand is not tenable. [ Including Rs. 9 {as at 31-03-09 Rs. 9} Millions in respect of Amalgamated {*} Companies ] 49 332

E In respect of the demand raised by the Ministry of Chemicals & Fertilizers, Govt, of India under Drug Price Control Order, 1979 for difference in actual price and price of respective bulk drug allowed while fixing the price of certain life saving formulations and disputed by the Company. Based on the legal advice the Company does not foresee the crystallization of the liability.

[ Including Rs. 42 {as at 31-03-09 Rs. 42} Millions in respect of Amalgamated {*} Companies ] 227 219

F In respect of Income Tax matters pending before appellate authorities which the Company expects to succeed, based on decisions of Tribunals / Courts. 12 14

6 In respect of Sales Tax matters pending before appellate authorities / Court which the Company expects to succeed, based on decisions of Tribunals / Courts. 74 49

Note: [ * ] represents contingent liabilities taken over by the Company under the Scheme of Arrangement and Amalgamation of Cadila Laboratories Ltd., and erstwhile Cadila Chemicals Ltd., Cadila Antibiotics Ltd., Cadila Exports Ltd. and Cadila Veterinary Pvt. Ltd. with the Company w.e.f. 1st June, 1995. 9 Estimated amount of contracts remaining to be executed on capital account and not provided for

[Net of Advances] 582 698



10 Deferred Tax:

A The Deferred tax liability of Rs. 110 Millions for the year has been reversed in the Profit and Loss Account.

* Bonus Declaration:

Share holders at Extra Ordinary General Meeting held at March 22, 2010 have approved issue of bonus shares and in view of this on April 9, 2010, the Company has allotted 68,249,507 bonus shares in the ratio of one fully paid up equity shares for two equity shares held on the record date. In view of this, no effect of Bonus shares has been given in final accounts. However, the Basic & Diluted EPS has been adjusted for both the reporting periods as per the requirements of Accounting Standard - 20 on" Earning Per Share" issued by the Institute of Chartered Accountants of India.

 
Subscribe now to get personal finance updates in your inbox!