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Notes to Accounts of Dishman Pharmaceuticals & Chemicals Ltd.

Mar 31, 2016

1. Details on derivatives instruments and unheeded foreign currency exposures

(i) The following derivative positions are open as at 31 March, 2016. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and interest rate and have not been designated as hedging instruments.

Interest rate swaps to hedge against fluctuations in interest rate changes: As at 31 March, 2016 Rs, NIL (As at 31 March, 2015: Rs, 3.52 crores )

(ii) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes. Outstanding short-term forward exchange contracts entered into by the Company on account of Receivable including forecast receivable:

2. Segmental Reporting

As the Company''s annual report contains both Consolidated and Standalone Financial Statements, segmental information is _presented only on the basis of Consolidated Financial Statement. (Refer note 26.12 of Consolidated Financial Statements).

3. Employee benefit plans a) Defined Benefit Plans

i) Actuarial gains and losses in respect of defined benefit plans are recognized in the Statement of Profit & Loss.

ii) The Company has an obligation towards gratuity, a defined benefit obligation. The company makes lump sum payment to vested employees an amount based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of service or part thereof in excess of six months. Vesting occures upon completion of five years of service.

i. The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations.

ii. Expected Rate of Return of Plan Assets: This is based on the expectation of the average long-term rate of return expected on investments of the Fund during the estimated term of obligations.

iii. Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Notes: Amount recognized as an expense in the Statement of Profit and Loss and included in note no. 24 under Salary and Wages are gratuity Rs, 1.54 crores (Previous Year Rs, 2.30 crores) and leave encashment Rs, (0.59) crores (Previous Year Rs, 0.98 crores).

4. Related party Disclousre

As per Accounting Standard 18, the disclosure of transactions with the related parties are given below: a) Details of related parties:

Description of relationship Name of the related party

Subsidiary Dishman USA Inc.

Subsidiary Dishman Europe Ltd.

Subsidiary Dishman International Trading (Shanghai) Co. Ltd.

Subsidiary Dishman Switzerland Ltd.

Subsidiary CARBOGEN AMCIS (Shanghai) Co. Ltd. [formerly known as

Dishman Pharmaceuticals & Chemicals (Shanghai) Co. Ltd.]

Subsidiary Dishman Pharma Solutions AG

Subsidiary Dishman Australasia Pty Ltd.

Subsidiary CARBOGEN AMCIS Ltd., U.K.

Subsidiary Carbogen Amcis (India) Ltd.

Subsidiary Dishman Care Ltd.

Subsidiary Dishman Middle East FZE

Subsidiary Dishman Japan Ltd. (w.e.f. to 10-12-2014)

Subsidiary Schutz Dishman Biotech Ltd. (w.e.f. 31-03-2016)

Step Down Subsidiary CARBOGEN AMCIS AG

Step Down Subsidiary Cohecie Fine Chemicals B.V.

Step Down Subsidiary Dishman Netherlands B.V.

Step Down Subsidiary Innovative Ozone Service Inc.

Step Down Subsidiary CARBOGEN AMCIS SAS

Step Down Subsidiary Shanghai Yiqian International Trade Co. Ltd.

Associates Bhadra Raj Holding Pvt. Ltd.

Joint Venture Schutz Dishman Biotech Ltd. (upto 30-03-2016)

Joint Venture Dishman Arebia Ltd. (Liquidated w.e.f. 05-01-2015)

Joint Venture Dishman Japan Ltd. (up to 09-12-2014)

Key Management Personnel (KMP) Mr. Janmejay R.Vyas

Key Management Personnel (KMP) Mrs. Deohooti J.Vyas

Key Management Personnel (KMP) Mr. Arpit J.Vyas

Relative of Key Management Personnel Ms. Aditi J Vyas

Relative of Key Management Personnel Ms. Mansi J Vyas

Entity in which KMP can exercise significant influence* B. R. Laboratories Ltd.

Entity in which KMP can exercise significant influence* Azafran Innovacion Ltd.

Entity in which KMP can exercise significant influence* Dishman Infrastructure Ltd.

Entity in which Relatives of KMP can exercise significant influence* Discus IT Pvt. Ltd.

* Only where transactions have taken place during the year.

5. During the year, Mr. Tushar D. Shah, Company Secretary has resigned w.e.f. 26th February, 2016 and Company is in process of appointing befitting candidate as Company Secretary. As per the provisions of Section 203 of Companies Act, 2013, the Company is required to fill-up such vacancy within a period of six months from the date of such vacancy.

6. The Board of Directors of the Company at their meeting held on 24th February, 2016 approved a Scheme of Arrangement and Amalgamation amongst the Company with its subsidiaries Dishman Care Limited and Carbogen Amcis (lndia) Limited. The Company has received Observation letter without any adverse comments from both Stock Exchanges i.e. National Stock Exchange of lndia Ltd., and Bombay Stock Exchange Ltd., and Company is in process of filing Draft Scheme with Honorable High Court of Gujarat.

7. Subsequent to 31st March, 2016, the Company has issued and allotted 80,697,136 equity shares of Rs,2/- each, as fully paid up bonus shares in the ratio of 1 (one) equity share for every 1 (one) Equity share held to those shareholders whose names appear in lhe Register of Members / List of Beneficial owners as on the Record Date i.e. on 3rd May,2016.

8. The Company has acquired further 50% stake in Schutz Dishman Biotech Ltd., a Joint Venture Indian Company, from the existing JV Partner i.e. SCHUTZ & CO. BETEILIGUNGSGESELLSCHAFT GMBH, Germany. Hence, with a stake of 72.33% Schutz Dishman Biotech Ltd., becomes a subsidiary of the Company.

9. Figures for the previous year have been regrouped/reclassified/rearranged wherever necessary to make them comparable to those for the current year.

Excluding Directorship in DPCL.

@ Directorship in Companies including overseas companies (listed, unlisted and private limited companies), including DPCL and its subsidiaries.

# As required by Regulation 26 of SEBI (LODR) Regulations, 2015, the disclosure includes chairpersonship and membership of the audit committee and the Stakeholders'' Relationship Committee in Indian public companies (listed and unlisted)


Mar 31, 2015

1.01 Disclosure under Micro, Small, and Medium Enterprises Development Act, 2006 :

The Company has not received any memorandum (as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprise Development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently, the amount paid/payable to these parties during the period is Rs. Nil.

1.02 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

Loans and advances in the nature of loans given to subsidiaries, associates and others and investment in shares of the Company by such parties:

1.03 Details on derivatives instruments and unheeded foreign currency exposures

(i) The following derivative positions are open as at 31 March, 2015. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and interest rate and have not been designated as hedging instruments.

"Interest rate swaps to hedge against fluctuations in interest rate changes: As at 31 March, 2015 Rs. 351.56 lacs (As at 31 March, 2014: Rs. 1684.41 lacs )""

(ii)The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

1.04 Segment information

(A) The Company is in the business of manufacturing and marketing of :

A. Contract Research & Contract Manufacturing (CRAMS).

B. Bulk Drugs, Intermediates, Quats ,Specialty Chemicals and traded goods

(B) Segment revenue of the above business segment includes sales export incentive and income from Research and Development activities. Segment revenue in geographical segment considered for disclosure is as follows:

A. Domestic Sales

B. Export Sales

(i) The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amount allocated on a reasonable basis by management and reconciliation of reportable segments with financial statements.

1.05 Employee benefit plans

a) Defined Benefit Plans

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Statement of Profit & Loss. ii) The Company has an obligation towards gratuity, a defined benefit obligation. The company makes lumpsum payment to vested employees an amount based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of service or part thereof in excess of six months. Vesting occurss upon completion of five years of service.


Mar 31, 2013

1.1 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expense in the period in which they are incurred.

1.2 Taxes on income

Tax expenses for a year comprise of current tax and deferred tax. Provision for current tax is determined based on assessable profits of the Company as determined under the Income Tax Act, 1961. Provision for deferred tax is determined based on the effect of timing difference between the assessable profits under the Income Tax Act and the profits as per the Profit and Loss Account. Deferred tax assets, other than those from carry forward losses and unabsorbed depreciation, are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets arising from carry forward losses and unabsorbed depreciation, are recognized and carried forward only to the extent that there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.3 Research and development expenses

Research and development costs incurred for development of products are charged to revenue as incurred, except for development costs relating to the design and testing of new or improved materials, products or processes which are recognized as intangible assets to the extent that it is expected that such assets will generate future economic benefits. Research and development expenditure of capital nature is added to fixed assets. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events and change in circumstances indicate that the carrying value may not be recoverable. Expenditure on development of the production process of molecules is treated as capital work in progress and amortized over the period of life of each product once the commercial exploitation of the respective product starts / put to use.

1.4 Impairment of assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s each class of the fixed assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

1.5 Provisions and contingencies

Provisions are recognized for when the Company has at present, legal or contractual obligation as a result of past events, only if it is probable that an outflow of resources embodying economic benefits will be required and if the amount involved can be measured reliably. Contingent liabilities being a possible obligation as a result of past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more future events not wholly in the control of the Company, are not recognized in the accounts. The nature of such liabilities and an estimate of its financial effect are disclosed in the Notes to Financial Statements. Contingent assets are neither recognized nor disclosed in the financial statements.

1.6 Derivative contracts

In respect of derivate contracts, premium paid, gains or losses on settlement and provision for losses for cash flow hedges are recognized in the profit and loss account.

1.7 Disclosure under Micro, Small, and Medium Enterprises Development Act, 2006The Company has not received any memorandum (as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprise Development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently, the amount paid/payable to these parties during the period is Rs. Nil.

1.8 Details on derivatives instruments and unhedged foreign currency exposures

I. The following derivative positions are open as at 31 March, 2013. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.11, 2.26 and 2.27.

(a) Forward exchange contracts and options [being derivative instruments], which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

(b) Interest rate swaps to hedge against fluctuations in interest rate changes: As at 31 March, 2013 Rs.2747.93 lacs (As at 31 March, 2012: Rs.3720.60 lacs )

1.9 Segment information

The Company is in the business of manufacturing and marketing of :

A. Contract Research & Contract Manufacturing (CRAMS).

B. Bulk Drugs, Intermediates, Quats ,Specialty Chemicals and traded goods.

Segment revenue of the above business segment includes sales export incentive and income from Research and Development activity.

Segment revenue in geographical segment considered for disclosure is as follows:

A. Domestic Sales

B. Export Sales

(i) The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amount allocated on a reasonable basis by management and Reconciliation of reportable segments with financial statements.

1.10 Employee benefit plans

a) Defined Benefit Plans

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit &Loss Account.

ii) The Defined Benefit Plan comprises of Gratuity and Leave Encashment. Gratuity is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months. The plan is funded.

iii) Leave Encashment benefit is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months.


Mar 31, 2012

(i) The Company has issued only one class of shares referred to as equity shares having a par value of Rs. 2.00. All equity shares carry one vote per share without restrictions and are entitled to dividend, as and when declared. All shares rank equally with regard to the Company's residual assets.

(ii) The amount of per share dividend recognised as distributions to equity shareholders during the year ended March 31, 2012 is Rs. 1.20 (previous year: Rs.1.20), subject to approval by shareholders in the ensuing annual general meeting.

(iii) Additions to fixed assets includes:

(a) Loss of Rs. Nil on account of exchange differences pertaining to long term foreign currency monetary liabilities. (Previous year Gain Rs. 62.06 lacs)

(vi) Capital Work in Progress includes:

(a) Rs. 153.84 lacs on account of borrowing cost on borrowings for qualifying assets. (Previous Year Rs. 559.91 lacs)

(b) Loss of Rs. 927.89 lacs on account of exchange differences pertaining to long term foreign currency monetary liabilities. (Previous year Gain Rs. 363.36 lacs)

Notes:

Balances with banks include deposits amounting to Rs. Nil (As at 31 March, 2011 Rs.Nil) and margin monies amounting to Rs. 310.32 lacs (As at 31 March, 2011 Rs. 310.00 lacs) which have an original maturity of more than 12 months.

1.01 Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31 March, 2012 31 March, 2011 Rs.in Lacs Rs.in Lacs

(i) Contingent liabilities

a) Claims against the Company not acknowledged as debt 3.01 3.12

b) Guarantees

(i) Outstanding guarantees furnished to the bank in respect of 43,359.78 24,867.89 wholly owned subsidiaries and a joint venture company

(ii) Guarantees given by Bank on behalf of the Company 267.21 121.66

c) Letters of Credit in favor of suppliers 1,958.29 2,362.91

d) Disputed central excise duty (including service tax) liability 418.65 435.03

e) Disputed income tax liability for various assessment years 5,273.56 4,007.05 for which appeals are pending with Appellate authorities, out of the said amount, the Company has paid Rs. 662.26 Lacs (Previous Year Rs. 642.26 Lacs) under protest.

f) Disputed sales tax and central sales tax liability ,out of the said 433.96 447.41 amount company has paid Rs.7.83 Lacs under protest.

g) Bills discounted with banks 4,295.19 3,398.57

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital 764.54 2,409.18 account and not provided for Tangible assets

1.02 During the year, the Company has opted for the option given in the paragraph 46A of Accounting Standard - 11 "The effects of changes in Foreign Exchange Rates" inserted by the Notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs.

a) The exchange differences arising on restatement or settlement of long term foreign currency monetary items in so far as they relate to acquisition of a depreciable capital asset are adjusted to the cost of such asset and depreciated over the balance life of the asset

b) In other cases, they have been accumulated in 'Foreign Currency Monetary Items Translation Difference Account' and amortized over the balance period of such long term asset/ liability but not beyond March 31, 2020 by recognition as an income and expenses in each of such periods.

Accordingly, on standalone basis, Rs.927.89 lacs has been added to the cost of the capital assets, Rs. 1.42 lacs has been accumulated 'Foreign Currency Monetary Item Translation Difference Account' and total amortisation on such foreign currency monetary asset / liability for the year ended on 31st March 2012 is Rs.132.63 lacs.

The amount remaining to be amortized in subsequent periods as at the balance sheet date is Rs.131.22 lacs (Previous year Rs. Nil)

1.03 Disclosure under Micro, Small, and Medium Enterprises Development Act, 2006. The Company has not received any memorandum (as required to be fled by the suppliers with notified authority under the Micro, Small and Medium Enterprise Development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently, the amount paid/payable to these parties during the period is Rs. Nil.

1.04 Details on derivatives instruments and unhedged foreign currency exposures

I. The following derivative positions are open as at 31 March, 2012. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.11, 2.26 and

1.05.(a) Forward exchange contracts and options [being derivative instruments], which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

(b) Interest rate swaps to hedge against fluctuations in interest rate changes: As at 31 March, 2012 Rs. 3720.60 lacs (As at 31 March, 2011: Rs.4125.50 lacs )

1.06 Segment information

The Company is in the business of manufacturing and marketing of :

A. Contract Research & Contract Manufacturing (CRAMS).

B. Bulk Drugs, Intermediates, Quats ,Specialty Chemicals and traded goods.

Segment revenue of the above business segment includes sales export incentive and income from Research and Development activity.

Segment revenue in geographical segment considered for disclosure is as follows:

A. Domestic Sales

B. Export Sales

(i) The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amount allocated on a reasonable basis by management and Reconciliation of reportable segments with financial statements.

1.07 The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of revision to the Schedule VI as per a notification issued during the year by the Central Government, the financial statements for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year figures have been accordingly regrouped / re- classified to conform to the current year's classification.

1.08 Employee benefit plans

a) Defined Benefit Plans

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit &Loss Account.

ii) The Defined Benefit Plan comprises of Gratuity and Leave Encashment. Gratuity is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months. The plan is funded.

iii) Leave Encashment benefit is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months.

i. The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations.

ii. Expected Rate of Return of Plan Assets: This is based on the expectation of the average long-term rate of return expected on investments of the Fund during the estimated term of obligations.

iii. Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.


Mar 31, 2011

1. Contingent Liabilities to the extent not provided for:

a. Guarantees given by Bank on behalf of the Company Rs 121.66 Lacs (Previous Year Rs. 148.52 Lacs)

b. Letters of Credit in favor of suppliers Rs 2362.91 Lacs (Previous Year Rs 908.87 Lacs)

c. Outstanding guarantees furnished to the bank in respect of wholly owned subsidiaries and a joint venture company Rs. 24867.89 Lacs (Previous Year Rs. 35115.35 Lacs)

d. Claims against the Company not acknowledged Rs. 3.12 Lacs (Previous Year Rs. 4.56 Lacs)

e. Disputed central excise duty (including service tax) liability is Rs. 435.03 Lacs (Previous Year Rs. 329.27 Lacs)

f. Disputed income tax liability Rs. 4007.05 Lacs (Previous Year Rs. 2292.52 Lacs) for various assessment years for which appeals are pending with Appellate authorities, out of the said amount company has paid Rs. 642.26 Lacs (Previous Year Rs. 422.26 Lacs) under protest.

g. Disputed sales tax and central sales tax liability Rs. 447.41 Lacs (Previous Year Rs. 181.62 Lacs), out of the said amount company has paid Rs. 24.93 Lacs under protest.

h. Bills discounted with banks Rs. 3398.57 Lacs (Previous Year Rs. 4516.46 Lacs.)

2. Estimated amount of contracts remaining to be executed on capital accounts not provided for (Net of Advances) Rs. 2409.18 Lacs (Previous Year Rs. 4282.56 Lacs)

3. From the financial year 2008-09, the company changed its accounting policy pertaining to recognition of exchange rate differences on settlement or restatement of foreign currency monetary assets and liabilities by exercising the option as per the notification dated March 31, 2009 issued by the Ministry of Corporate Affairs. As a result:

a. The exchange differences arising on restatement or settlement of long term foreign currency monetary items in so far as they relate to acquisition of a depreciable capital asset are adjusted to the cost of such asset and depreciated over the balance life of the asset.

b. In other cases, they have been accumulated in Foreign Currency Monetary Items Translation Difference Account and amortized over the balance period of such long term asset/ liability but not beyond March 31, 2011 by recognition as an income and expenses in each of such periods.

Accordingly, Rs. 20.38 lacs have been added in the cost of fixed assets, Rs. 41.03 lacs has been added in Foreign Currency Monetary Items Translation Difference Account, and Rs. 89.63 lacs has been amortized and charged to profit and loss account during the year.

The amount remaining to be amortized in subsequent periods as at the balance sheet is Rs. NIL Lacs.

4. Secured Loans

Secured Redeemable Non-Convertible Debentures -First Trench of Rs. 7500.00 lacs issued in February,2010, are secured by, first pari-passu charge on the fixed assets of the Company located at Bavla. The debentures carry interest rate of 10.35% p.a. and are redeemable @ 20% each in the 4th and 5th year and 30% each in the 6th and 7th year from the date of allotment.

Secured Redeemable Non-Convertible Debentures-Second Trench issued in June 2010, are secured by, first pari-passu charge on the fixed assets of the Company located at Bavla. The debentures carry interest rate of 9.65% p.a. and are redeemable @ 50% each in the 4th and 5th year from the date of allotment.

Secured Foreign Currency Term Loan from Bank of India (amount outstanding as at March 31, 2011 Rs. 2020.47 lacs), is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company and further secured by pledge of the shares of the Company held / to be held in wholly owned subsidiary in China, namely Dishman Pharmaceuticals & Chemicals (Shanghai) Co.Ltd.

Secured Foreign Currency Term Loan from Development Bank of Singapore (amount outstanding as at March 31, 2011 Rs. 4125.50 lacs), is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company.

Secured Foreign Currency Term Loan from International Finance Corporation (amount outstanding as at March 31, 2011 Rs. 6690.00 lacs), is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company.

Secured Term Loan from Industrial Development Bank of India Limited (IDBI) (amount outstanding as at March 31, 2011 Rs. 1400.00 lacs) is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company.

Secured Term Loan from Indusind Bank Limited (amount outstanding as at March 31, 2011 Rs. 3566.03 lacs) is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company.

Secured Term Loan from Bank of Maharashtra (amount outstanding as at March 31, 2011 Rs. 1500.00 lacs) is secured by first pari-passu charge on the fixed assets of the Company located at Bavla and the second pari-passu charge on the current assets of the Company.

Secured Term Loan from Standard Chartered Bank (amount outstanding as at March 31, 2011 Rs. 1500.00 lacs) is secured by first charge on the movable fixed assets of the Naroda EOU plant of Company located at Plot No. 1216/24 to 27 and 1216/11, Pharse IV, GIDC Estate, Naroda , Ahmedabad.

Working Capital Loans are secured against hypothecation of inventories, collateral security of book debts, first charge on fixed assets of the Company situated at Naroda, except EOU Unit and second charge on fixed assets of the Company situated at Bavla.

Hire Purchase Finances are secured by hypothecation of respective assets.

5. Unsecured loans from banks are personally guaranteed by one of the promoter directors.

Unsecured loans include loans from Life Insurance Corporation of India availed on the Keyman insurance policies of the key personnel of the entity.

6. The Company has pledged its 1 (One) equity share of Dishman FZE with ABN AMRO Bank N.V. as security against loan availed by its subsidiary company, Dishman FZE

The Company has pledged its 28,000,000 (Twenty Eight Millions) equity share of Dishman Pharma Solutions AG, Switzerland with Cooperative Centrale Raifeisen- Boerenleenbank BA (trading as Rabobank International), Singapore as security against loan availed by its subsidiary company, Dishman Pharma Solutions,AG.

12. There are no dues to Micro and small Enterprises as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

13. Employee Benefits

The present value of gratuity and leave encashment obligations is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Details of post retirement benefits are as follows:

1. Defined Benefit Plans

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit &Loss Account.

ii) The Defined Benefit Plan comprises of Gratuity and Leave Encashment. Gratuity is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months. The plan is funded.

iii) Leave Encashment benefit is a benefit to an employee based on 15 days last drawn basic salary including dearness allowance(if any) for each completed year of continuous service with part thereof in excess of six months.

15. Balances of receivables, payables and loans and advances parties are subject to their confirmations. These balances are therefore, subject to adjustments, if any, as may be required on settlement of these balances with the parties.

20. Segmental Reporting

The Company is in the business of manufacturing and marketing of

A. Contract Research & Contract Manufacturing (CRAMS).

B. Bulk Drugs, Intermediates, Quats, Specialty Chemicals & Traded Goods.

Segment revenue of the above business segment includes sales export incentive and income from Research and Development activity.

Segment revenue in geographical segment considered for disclosure is as follows:

A. Domestic Sales

B. Export Sales

The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segment and amount allocated on a reasonable basis by management

21. Financial and derivative instruments

Derivative contracts entered into by the Company and outstanding as at March 31, 2011.

(a) For hedging currency and interest related risks

(b) All derivative and financial instruments acquired by the Company are for hedging purposes only.

(c) The year end foreign currency exposures that have not been hedged by any derivate instrument or otherwise are as under

22. The Ministry of Corporate Affairs, Government of India , vide its order No.47/42/2011-CL-III dated 21st January, 2011 issued under section 212(8) of the companies Act, 1956 has exempted the company from attaching the Balance Sheet and Profit and Loss Accounts of the subsidiaries under section 212(1) of the companies Act, 1956. As per the order, key details of the subsidiaries are attached along with the consolidated financial statement.

23. Donation includes of Rs NIL Lacs given to Political Party (Previous Year Rs. 200 Lacs) .

24. Previous year figures have been regrouped / rearranged wherever necessary.

 
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