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Notes to Accounts of FDC Ltd.

Mar 31, 2015

1. Contingent Liabilities and commitments (to the extent not provided for)

31st March 2015 31st March 2014 Rupees in lacs Rupees in lacs

Contingent Liabilities

a. Disputed tax matters

Income tax (Appealed by tax authorities) 10.29 10.29

Income tax (Appealed by the Company) 251.08 499.63

Excise duty (Appealed by excise authorities) 2.23 2.12

Excise duty (Appealed by the Company) 265.24 260.25

Sales tax (Appealed by the Company) 231.04 234.82

b. In respect of guarantees given by banks 166.79 371.20

c. Letter of credit issued by bankers 219.00 274.64

d. Estimated amount of duty payable on export 17.41 6.41 obligation against outstanding advances licences

e. During 2013-14, the Company received notices of demand (including 936.12 846.88 interest) from the National Pharmaceutical Pricing Authority, Government of India, on account of alleged overcharging in respect of certain formulations under the Drugs (Prices Control) Order, 1995. The Company fled writ petition before the Hon''ble Supreme Court of India for stay of demand and other matters. The Hon''ble Supreme Court then passed order restraining the Government from taking any coercive action against the Company. The case is currently pending before the Hon''ble Supreme Court of India. The Company has been legally advised that on the basis of the facts and circumstances and grounds raised by the Company, the possibility of an adverse ruling in this case is unlikely. Hence, no provision is considered necessary in this respect.

Commitments

Estimated amount of capital contracts remaining to be executed and not 192.42 721.71 provided for (net of advances paid)

Note:

The Company''s pending litigations comprise of proceedings pending with Income Tax, Excise, Sales Tax Authorities and National Pharmaceutical Pricing Authority of India. The company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the company has made a provision of Rs. 728.45 lacs as at 31st March 2015.

2. As per Accounting Standard – 15 (revised 2005) – "Employee Benefts" the disclosures as defined in the Accounting Standard are given below:

Defined Beneft Plan

The employees'' gratuity fund scheme managed by trust is a defined benefit plan. 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 of employee benefit entitlement and measures each unit separately to build up the final obligation.

I. Salary Escalation Rate

The estimates of future salary increase considered in actuarial valuation is taken on account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

II. Basis used to determine Expected Rate of Return on Plan Assets

The expected rate of return on Plan Assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

III. The Company expects to contribute Rs.361.51 lacs to gratuity in next year (Previous year - Rs. 191.12 lacs).

The liability for Leave Encashment as at the year end is Rs.522.18 lacs (Previous year - Rs. 433.13 lacs) and provision for sick leave as at the year end is Rs.72.08 lacs (Previous year - Rs. 59.97 lacs).

3. Segment Information:

Primary segment information

The Company is engaged in pharmaceutical business which as per Accounting Standard 17 - "Segment Reporting" is considered the only business segment.

Secondary segment information

The Company''s operating divisions are managed from India. The principal geographical areas in which the Company operates are India and others. The country-wise segmentation is not relevant as exports to individual countries are not more than 10% of enterprise revenue.

4. Related party disclosures, as required by Accounting Standard 18 - "Related Parties Disclosures" are given below:

Names of Related parties where control exists irrespective of whether transactions have occurred or not :

Subsidiary Companies

FDC International Limited

FDC Inc.

Anand Synthochem Limited

Joint Venture Entity

Fair Deal Corporation Pharmaceutical SA (Pty) Ltd.

Names of other related parties with whom transactions have taken place during the year :

Key Management Personnel

Mr. Mohan A. Chandavarkar

Mr. Ashok A. Chandavarkar

Mr. Nandan M. Chandavarkar

Mr. Ameya A.Chandavarkar

Ms. Nomita R.Chandavarkar w.e.f. 02.06.2014

Relatives of Key Management Personnel

Ms. Sandhya M. Chandavarkar, Wife of Mr. Mohan A. Chandavarkar

Ms. Mangala A. Chandavarkar, Wife of Mr. AshokA. Chandavarkar

Ms. Meera R. Chandavarkar, Mother of Ms. Nomita R. Chandavarkar w.e.f. 02.06.2014

Enterprises owned or significantly infuenced by Key Management Personnel or their relatives:

Soven Trading and Investment Company Private Limited

Transgene Trading and Investment Company Private Limited

Sudipta Trading and Investment Company Private Limited w.e.f. 02.06.2014

Anand Chandavarkar Foundation

5. Loans and Advances in the nature of loans given to subsidiaries in which directors are interested:

Anand Synthochem Limited

Balance as at 31st March, 2015 Rs. 41.42 lacs (Previous year - Rs. 38.42 lacs).

Maximum balance outstanding during the year Rs. 41.42 lacs (Previous year - Rs. 38.42 lacs).

Out of the above - Rs. 38.42 lacs is payable on demand and Rs.3.00 lacs is payable after one year.

6. Pursuant to Accounting Standard 19 - "Leases", disclosure on leases is as follows:

The Company''s significant leasing arrangements are in respect of godowns / office premises taken on operating lease basis. The aggregate lease rentals payable are charged as Rent and shown under ''Other Expenses'' (Refer Note No. 23).

These leasing arrangements, which are cancelable, range between 1 year and 5 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. There are certain agreements which provide for increase in rent. There are no subleases.

7. The Board of Directors have approved the Scheme of Amalgamation of the Company with Anand Synthochem Limited (wholly owned subsidiary ), Soven Trading and Investment Company Private Limited, Sudipta Trading and Investment Company Private Limited and Transgene Trading and Investment Company Private Limited, ("the Scheme") at their meeting held on 6th September, 2014. As per the Scheme, the appointed date is 1st September, 2014. The Scheme has been approved by Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited and Reserve Bank of India.The Hon''ble High Court of Bombay vide its order dated 24th April, 2015 directed that a meeting of equity shareholders of the company be convened and has dispensed off the meeting of the unsecured creditors. Pending the approval of the Shareholders and Hon''ble High Court of Bombay, no effect of the Scheme has been given in the financial statements.

8. Costs of samples, manufactured and purchased, have been included in cost of materials consumed and purchases of Stock - in - trade respectively.

9. The Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

10. Previous year''s figures have been regrouped/ reclassified, wherever necessary to conform to this years classification.


Mar 31, 2014

1. Long-term borrowings

Note: Under various schemes of Government of Maharashtra, the Company was entitled to interest free Sales Tax deferral incentives for its units at Waluj and Sinnar. These are repayable in annual installments over a period of 9-11 years commencing after a period of 10-12 years from the year of availment of deferred sales tax loan.

2. Trade payables and Other current liabilities

a. As per the information available with the Company, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosure have been made. The Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

b. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

3. Contingent liabilities and commitments (to the extent not provided for):

31st March 2014 31st March 2013

Contingent Liabilities Rupees in lacs Rupees in lacs

a. Disputed tax matters Income tax (Appealed by tax authorities) 10.29 10.29

Income tax (Appealed by the Company) 499.63 -

Excise duty (Appealed by excise authorities) 2.12 2.00

Excise duty (Appealed by the Company) 260.25 229.25

Sales tax (Appealed by the Company) 234.82 232.44

b. In respect of guarantees given by banks 371.20 316.62

c. Letter of credit issued by bankers 274.64 91.69

d. Estimated amount of duty payable on export 6.41 31.50 obligation against outstanding advances licences

e. During the year, the Company has received notices of demand (including interest) from the National Pharmac -eutical Pricing Authority, Government of India on account of alleged overcharging in respect of certain formulations under the Drug Price Control Order, 1995. The Company has filed a writ petition before the Hon''ble Supreme Court of India for stay of the demand and other matters. The Company has been legally advised that on the basis of the facts and circumstances and grounds raised by the Company, the possibility of an adverse ruling in this case is unlikely. Hence no provision is considered necessary in this respect.

4. As per Accounting Standard - 15 (revised 2005) - “Employee Benefits” the disclosures as defined in the Accounting Standard are given below:

Defined Benefit Plan

The employees'' gratuity fund scheme managed by trust is a defined benefit plan. 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 of employee benefit entitlement and measures each unit separately to build up the final obligation.

i. Salary Escalation Rate

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

ii. Basis used to determine Expected Rate of Return on Plan Assets

The expected rate of return on Plan Assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

iii. The Company expects to contribute Rs. 191.12 lacs to gratuity in next year (Previous year - Rs. 141.05 lacs).

The liability for Leave Encashment as at the year end is Rs. 433.13 lacs (Previous year - Rs. 322.17 lacs) and provision for sick leave as at the year end is Rs. 59.97 lacs (Previous year - Rs. 37.23 lacs).

5. Segment Information:

Primary segment information

The Company is engaged in pharmaceutical business which as per Accounting Standard 17 - "Segment Reporting" is considered the only business segment.

Secondary segment information

The Company''s operating divisions are managed from India. The principal geographical areas in which the Company operates are India and others. The country-wise segmentation is not relevant as exports to individual countries are not more than 10% of enterprise revenue.

6. Related party disclosures, as required by Accounting Standard 18 - "Related Parties Disclosures" are given below:

Names of Related parties where control exists irrespective of whether transactions have occurred or not :

Subsidiary Companies

- FDC International Limited

- FDC Inc.

- Anand Synthochem Limited

Joint Venture Entity

- Fair Deal Corporation Pharmaceutical SA (Pty) Ltd.

Names of other related parties with whom transactions have taken place during the year :

Key Management Personnel

- Mr. Mohan A. Chandavarkar

- Mr. Ashok A. Chandavarkar

- Mr. Nandan M. Chandavarkar

- Mr. Ameya A. Chandavarkar

Relatives of Key Management Personnel

- Ms. Sandhya M. Chandavarkar, Wife of Mr. Mohan A. Chandavarkar

- Ms. Mangala A. Chandavarkar, Wife of Mr. Ashok A. Chandavarkar

Enterprises owned or significantly influenced by Key Management Personnel or their relatives

- Mejda Marketing Private Limited

- Akhil Farma Limited

- Soven Trading and Investment Company Private Limited

- Transgene Trading and Investment Company Private Limited

- Anand Chandavarkar Foundation

7. Loans and Advances in the nature of loans given to subsidiaries in which directors are interested:

Anand Synthochem Limited

Balance as at 31st March 2014 Rs. 38.42 lacs (Previous year- Rs. 38.42 lacs).

Maximum balance outstanding during the year Rs. 38.42 lacs (Previous year- Rs. 38.42 lacs).

The same is payable on demand.

8. Pursuant to Accounting Standard 19 - “Leases”, disclosure on leases is as follows:

The Company''s significant leasing arrangements are in respect of godowns / office premises taken on operating lease basis. The aggregate lease rentals payable are charged as Rent and shown under ''Other Expenses'' (Refer Note No. 23).

These leasing arrangements, which are cancelable, range between 1 year and 5 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. There are certain agreements which provide for increase in rent. There are no subleases.

The Company''s interest in the JV is reported as Non-Current Investment (Refer Note No. 9) and stated at cost. The Company''s share of each of the assets, liabilities, income and expenses etc. (each without elimination of the effect of transactions between the Company and the JV) related to its interest in the JV, based on the audited financial statements of Fair Deal Corporation Pharmaceutical SA (Pty) Ltd. is as follows:

No contingent liabilities and capital commitments have been incurred as at 31st March 2014 in relation to the Company''s interest in the JV along with the other venturers (Previous year - Rs. Nil).

9. Foreign currency transactions/ balances of the Company are not hedged by derivative instruments or otherwise. The details of foreign currency transactions/ balances of the Company are:

10. Revenue expenditure on research and development (including depreciation and amortisation) aggregating to Rs.1,987.31 lacs (Previous year - Rs. 2,082.45 lacs) is included under relevant heads in the Statement of Profit and Loss.

11. Costs of samples, manufactured and purchased, have been included in cost of materials consumed and purchases of Stock - in - trade respectively.


Mar 31, 2013

1. As per Accounting Standard - 15 (revised 2005) - "Employee Benefits" the disclosures as defined in the Accounting Standard are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plans are recognised as an expense for the year under Contribution to provident and other funds (Refer Note No. 21) as under:

Defined Benefit Plan

The employees'' gratuity fund scheme managed by trust is a defined benefit plan. 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 of employee benefit entitlement and measures each unit separately to build up the final obligation.

2. Segment Information:

Primary segment information

The Company is engaged in pharmaceutical business which as per Accounting Standard 17 - "Segment Reporting" is considered the only business segment.

Secondary segment information

The Company''s operating divisions are managed from India. The principal geographical areas in which the Company operates are India and others. The country-wise segmentation is not relevant as exports to individual countries are not more than 10% of enterprise revenue.

3. Related party disclosures, as required by Accounting Standard 18 - "Related Parties Disclosures" are given below:

Names of Related parties where control exists irrespective of whether transactions have occurred or not :

Subsidiary Companies

- FDC International Limited

- FDC Inc.

- Anand Synthochem Limited

Joint Venture Entity

- Fair Deal Corporation Pharmaceutical SA (Pty) Ltd.

Names of other related parties with whom transactions have taken place during the year :

Key Management Personnel

- Mr. Mohan A. Chandavarkar

- Mr. Ashok A. Chandavarkar

- Mr. Nandan M. Chandavarkar

- Mr. Ameya A. Chandavarkar

Relatives of Key Management Personnel

- Ms. Sandhya M. Chandavarkar, Wife of Mr. Mohan A. Chandavarkar

- Ms. Mangala A. Chandavarkar, Wife of Mr. Ashok A. Chandavarkar

Enterprises owned or significantly influenced by Key Management Personnel or their relatives

- Anand Synthochem Limited (upto 16th October 2011)

- Mejda Marketing Private Limited

- Akhil Farma Limited

- Soven Trading and Investment Company Private Limited

- Transgene Trading and Investment Company Private Limited

- Anand Chandavakar Foundation

4. Loans and Advances in the nature of loans given to subsidiaries in which directors are interested:

Anand Synthochem Limited

Balance as at 31st March 2013 Rs. 38.42 lacs (Previous year - Rs. 38.42 lacs).

Maximum balance outstanding during the year Rs. 38.42 lacs (Previous year - Rs. 38.42 lacs).

The same is payable on demand.

5. Pursuant to Accounting Standard 19 - "Leases", disclosure on leases is as follows:

The Company''s significant leasing arrangements are in respect of godowns / office premises taken on operating lease basis. The aggregate lease rentals payable are charged as Rent and shown under ''Other Expenses'' (Refer Note No. 23).

These leasing arrangements, which are cancelable, range between 1 year and 5 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. There are certain agreements which provide for increase in rent. There are no subleases.

6. During the current year, Company has made revision in the estimated useful life of certain class of fixed assets which has resulted in higher charge of depreciation cost of Rs. 803.79 lacs. [Refer Note 1(d)]

7. Pursuant to Accounting Standard 27 - "Financial Reporting of interests in Joint Ventures", the disclosures relating to the Joint Venture Entity (JV) is as follows:

8. Foreign currency transactions/ balances of the Company are not hedged by derivative instruments or otherwise. The details of foreign currency transactions/ balances of the Company are:

9. Revenue expenditure on research and development (including depreciation and amortisation) aggregating to Rs. 2,082.45 lacs (Previous year - Rs.1,599.04 lacs) is included under relevant heads in the Statement of Profit and Loss.

10. Costs of samples, manufactured and purchased, have been included in Cost of materials consumed and purchases of stock-in-trade respectively.

11. Previous year''s figures have been regrouped/ reclassified, wherever necessary to conform to this year''s classification.


Mar 31, 2012

1. Contingent liabilities and commitments (to the extent not provided for):

31st March 2012 31st March 2011 Rupees in lacs Rupees in lacs

Contingent Liabilities Rupees in lacs Rupees in lacs

a.Disputed tax matters

Income tax 10.29 10.29

Excise duty 235.47 128.50

Sales tax 196.52 128.53

b.In respect of guarantees given by banks 154.65 112.31

c. Letter of credit issued by bankers 452.12 241.10

d.Estimated amount of duty payable on export obligation against outstanding advances licenses 4.63 2.55 Commitments

Estimated amount of capital contracts remaining to be executed and not provided for (net of advances paid) 858.12 973.89

Defined Benefit Plan

The employees' gratuity fund scheme managed by trust is a defined benefit plan. 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 of employee benefit entitlement and measures each unit separately to build up the final obligation.

X Salary Escalation Rate

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

XI Basis used to determine Expected Rate of Return on Plan Assets

The expected rate of return on Plan Assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

XII The Company expects to contribute Rs. 162.76 lacs to gratuity in next year (Previous year - Rs. 156.17 lacs).

The liability for leave encashment as at the year end is Rs. 302.42 lacs (Previous year - Rs. 259.75 lacs) and provision for sick leave as at the year end is Rs. 37.03 lacs (Previous year - Rs. 36.69 lacs).

2. Segment Information:

Primary segment information

The Company is engaged in pharmaceutical business which as per Accounting Standard 17 - "Segment Reporting" is considered the only business segment.

Secondary segment information

The Company's operating divisions are managed from India. The principal geographical areas in which the Company operates are India and others. The country-wise segmentation is not relevant as exports to individual countries are not more than 10% of enterprise revenue.

3. Related party disclosures, as required by Accounting Standard 18 - "Related Parties Disclosures" are given below:

Names of Related parties where control exists irrespective of whether transactions have occurred or not:

Subsidiary Companies

- FDC International Limited

- FDC Inc.

- Anand Synthochem Limited (w.e.f. 17th October 2011)

Joint Venture Entity

- Fair Deal Corporation Pharmaceutical SA (Pty) Ltd.

Names of other related parties with whom transactions have taken place during the year:

Key Management Personnel

- Mr. Mohan A. Chandavarkar

- Mr. Ashok A. Chandavarkar

- Mr. Nandan M. Chandavarkar

- Mr. Ameya A. Chandavarkar

Relatives of Key Management Personnel

- Ms. Sandhya M. Chandavarkar, Wife of Mr. Mohan A. Chandavarkar

- Ms. Mangala A. Chandavarkar, Wife of Mr. Ashok A. Chandavarkar

Enterprises owned or significantly influenced by Key Management Personnel or their relatives:

- Anand Synthochem Limited (upto 16th October 2011)

- Mejda Marketing Private Limited

- Akhil Farma Limited

- Soven Trading and Investment Company Private Limited

- Transgene Trading and Investment Company Private Limited

- Anand Chandavarkar Foundation

4. Loans and Advances in the nature of loans given to subsidiaries in which directors are interested:

a.Anand Synthochem Limited Balance as at 31st March 2012 - Rs. 38.42 lacs (Previous year - Rs. Nil). Maximum balance outstanding during the year - Rs. 38.42 lacs (Previous year - Rs. Nil). The same is payable on demand.

b.FDC International Limited Balance as at 31st March 2012 - Rs. Nil (Previous year - Rs. Nil). Maximum balance outstanding during the year - Rs. Nil (Previous year - Rs. 231.04 lacs). The same is payable on demand.

5. Pursuant to Accounting Standard 19 - "Leases", disclosure on leases is as follows:

The Company's significant leasing arrangements are in respect of godowns / office premises taken on operating lease basis. The aggregate lease rentals payable are charged as Rent and shown under 'Other Expenses' (Refer Note No. 23).

These leasing arrangements, which are cancelable, range between 1 year and 5 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. There are certain agreements which provide for increase in rent. There are no subleases.

6. Based on valuation by independent valuers, the Board of Directors, at its meeting held on 15th October 2011, had resolved to purchase 100% equity shares of Anand Synthochem Limited (ASL), a related, unlisted Public Company, from its erstwhile shareholders, for a total amount of Rs. 644.58 lacs (including a loan of Rs. 38.42 lacs), thereby making ASL, a wholly owned subsidiary of FDC Limited. ASL owns a property at Dombivali, Maharashtra admeasuring 81,855 sq.ft.

7. Revenue expenditure on research and development (including depreciation and amortisation) aggregating to Rs. 1,599.04 lacs (Previous year - Rs. 1,461.03 lacs) is included under relevant heads in the Statement of Profit and Loss.

8. Costs of samples, manufactured and purchased, have been included in Cost of materials consumed and Purchases of stock-in-trade respectively.

9. Previous year's figures have been regrouped/ reclassified, wherever necessary to conform to this year's classification.

 
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