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Notes to Accounts of Ipca Laboratories Ltd.

Mar 31, 2016

I) Rights and obligations of shareholders

The Company has only one class of share referred as Equity shares having a par value of Rs, 21- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

* Debenture redemption reserve is maintained in accordance with the Companies (Share capital & Debenture) Rules, 2014.

** General Reserve represents the reserve created in accordance with Companies (Transfer of Profits to Reserves) Rules, 1975.

*** Hedging Reserve represents the fair value changes of hedging instruments that are designated and effective as hedges of future cash flows. **** Exchange difference arising on a monetary item that, in substance, forms part of an enterprise''s net investments in a non-integral foreign operation are accumulated in foreign currency translation reserve.

* During the previous year, part amount of the loan to I pea Laboratories (U.K.) Limited has been converted to preference capital.

a) Share application money pending allotment of the previous year represents amount invested in Krebs Biochemical''s & Industries Limited, an associate, for allotment of 23,00,000 fully paid equity shares of Rs, 10/-each, which are alloted on 9th May, 2015.

b) Deposit includes Rs, 45.00 crores (previous year Rs, 39.44 crores) given as lease deposit for two manufacturing facilities of Krebs Biochemicals & Industries Limited taken on lease by the Company.

Valuation methodology

Raw materials and packing materials Lower of cost and Net realisable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on First-in-First-out basis.

Work-in-process and finished goods At lower of cost including material cost net of CENVAT, labour cost and all overheads other than selling and distribution overheads and net realisable value. Excise duty is considered as cost for finished goods wherever applicable.

Stores and spares Stores and spare parts are valued at lower of purchase cost computed on First-in-First-out method and net realisable value.

Traded Goods Traded Goods are valued at lower of purchase cost and net realisable value.

Pursuant to the retrospective amendment to the Payment of Bonus Act, the Company was required to make provision for differential bonus for the year 2014-15 as per the amendment. However, various High Courts have granted interim stay to the applicability of the amendment for the year 2014-15. The Company has therefore not made provision for differential bonus for the year 2014-15. Provision for Bonus for the current year is made as per the amendment.

Note: a) In accordance with the provisions of Schedule II to the Companies Act 2013, effective from 1st April, 2014, the Company had revised the useful lives of its fixed assets. Asa consequence of such revision, the charge for depreciation is higher than the previously applied rates by Rs, 37.68 crores for the previous year. For assets that had completed the useful lives as a consequence of the aforesaid revision, the carrying value as on 1st April, 2014 of Rs, 13.26 crores had also been charged to the statement of profit and loss. The depreciation charged for the previous year is accordingly higher by Rs, 50.94 crores. b) The Company has revised the useful life of plant and machinery installed at its formulation plants based on certificate from technical expert from 15 years as per Schedule II to 20 years. Based on this revision depreciation for the year is computed on such assets. On account of this revision, depreciation for the year is lower by Rs, 14.53 crore and profit before tax is higher by similar amount.

1. Disclosure as required by Accounting Standard - AS 19 "Leases" of the Companies (Accounting Standards) Rules 2006.

The Company has taken various residential / god owns / offices premises (including Furniture and Fittings if any) under leave and license agreements. These generally range between 11 months to 3 years under leave and license basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in the Statement of Profit and Loss under Rent.

During the previous year the Company has taken on operating lease two manufacturing facilities of M/s. Krebs Biochemicals & Industries Limited for manufacturing of products at the said facilities. An amount of Rs, 45.00 crores (previous year Rs, 39.44 crores) has been paid as lease deposit. Since the lease is cancellable at the option of the Company, the further disclosure of committed lease payments are not made.

*Note: It includes Rs, 4.38 crores (Previous year Rs, 4.38 crores) towards interest and penalty demanded by excise department, Ankleshwar relating to erstwhile Tonira Pharma Limited since amalgamated with the Company and is not payable in accordance with the order passed by the Hon''ble Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad. The Department had moved the Hon''ble Gujarat High Court against the said CESTAT order and as per the order of the said Hon''ble High Court, the Company has furnished a Bank Guarantee of Rs, 2.00 crores(Previous year Rs, 2.00 crores) to the Department.

2. a) The Company has entered into various derivatives transactions, which are not intended for trading or speculative purpose but to hedge the export receivables including future receivables and foreign currency loan interest rate risks.

3. In the opinion of the Board of Directors, all the assets other than fixed assets and noncurrent investments have value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4. The balance sheet, statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended 31st March, 2016.

5. Previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable.


Mar 31, 2015

I) Rights and obligations of shareholders

The Company has only one class of share referred as equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

* Debenture redemption reserve is maintained in accordance with the Companies (Share capital & Debenture) Rules, 2014.

** General Reserve represents the reserve created in accordance with Companies (Transfer of Profits to Reserves) Rules, 1975.

*** Hedging Reserve represents the fair value changes of hedging instruments that are designated and effective as hedges of future cash flows.

**** Exchange difference arising on a monetary item that, in substance, forms part of an enterprise''s net investments in a non-integral foreign operation are accumulated in foreign currency translation reserve.

ii) Disclosure u/s 186(4):

During the year the Company has invested in 18,00,000 equity shares of Krebs Biochemicals & Industries Limited(Krebs) which aggregate to 18.92% of total equity of Krebs.

The Company had already taken two of the plants of Krebs on lease basis before the acquisition of the stake and this acquisition will fortify the business interest of the Company.

Considering the business connection with Krebs and also the equity stake of 18.92%, the same is considered as an associate as per AS-23, Accounting for Investments in Associates in Consolidated Financials Statements.

The Company has also made an announcement for open offer as per the extant SEBI regulations.

The Company has paid share application money of Rs. 12.42 crores for 23,00,000 additional shares, which is since allotted on 9th May 2015. The share application money is disclosed under loans and advances.

a) Share application money pending allotment represents amount invested in Krebs Biochemicals & Industries Limited, an associate, for allotment of 23,00,000 fully paid equity shares of Rs. 10/- each, since alloted on 9th May, 2015.

b) Deposit includes Rs. 39.44 crores given as lease deposit for two manufacturing facilities of Krebs Biochemicals & Industries Limited taken on lease by the Company.

Note : In accordance with the provisions of Schedule II to the Companies Act 2013,effective from 1st April,2014, the Company has revised the useful lives of its fixed assets. As a consequence of such revision, the charge for depreciation is higher than the previously applied rates by Rs. 50.94 crores for the year. For assets that have completed the useful lives as a consequence of the aforesaid revision, the carrying value as on 1st April, 2014 of Rs. 13.26 crores had been charged to the opening balance of the surplus in statement of profit and loss in the first quarter alongwith the deferred tax effect thereon of Rs. 4.51 crores. The Management following the MCA circular no. GSR 627(E) dated 29th August, 2014 has decided to charge the amount of Rs. 13.26 crores as aforesaid to the Statement of profit & loss instead of charging the surplus in statement of profit & loss. The depreciation charged for the year is accordingly higher by Rs. 13.26 crores as compared to the disclosure in quarterly results.

2. Disclosure as required by Accounting Standard - AS 17 "Segment Reporting" of the Companies (Accounting Standards) Rules 2006.

In accordance with AS-17 "Segment Reporting", The Company has only one reportable primary business segment i.e. Pharmaceuticals. However, the Company has secondary geographical segment which is disclosed in Consolidated Financial Statements as per AS-17.

3. Disclosure as required by Accounting Standard - AS 19 "Leases" of the Companies (Accounting Standards) Rules 2006.

The Company has taken various residential / godowns / offices premises (including Furniture and Fittings if any) under leave and license agreements. These generally range between 11 months to 3 years under leave and license basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in the Statement of Profit and Loss under Rent.

During the year the Company has taken on operating lease two manufacturing facilities of M/s. Krebs Biochemicals & Industries Limited for manufacturing of products at the said facilities. An amount of Rs. 39.44 crores has been paid as lease deposit. Since the lease is cancellable at the option of the Company, the further disclosure of committed lease payment are not made.

*Note: It includes Rs. 4.38 crores (Previous year Rs. 4.38 crores) towards interest and penalty demanded by excise department, Ankleshwar relating to erstwhile Tonira Pharma Limited since amalgamated with the Company and is not payable in accordance with the order passed by the Hon''ble Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad. The Department had moved the Hon''ble Gujarat High Court against the said CESTAT order and as per the order of the said Hon''ble High Court, the Company has furnished a Bank Guarantee of Rs. 2.00 crores(Previous year Rs. 2.00 crores) to the Department.

4. In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

5. The balance sheet, Statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended 31st March''2015.

6. Previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable.

Note : In accordance with the provisions of Schedule II to the Companies Act 2013, effective from 1st April, 2014, the Company has revised the useful lives of its fixed assets. As a consequence of such revision, the charge for depreciation is higher than the previously applied rates by Rs. 50.94 crores for the year. For assets that have completed the useful lives as a consequence of the aforesaid revision, the carrying value as on 1st April, 2014 of Rs. 13.26 crores had been charged to the opening balance of the surplus in statement of profit and loss in the first quarter alongwith the deferred tax effect thereon of Rs. 4.51 crores. The Management following the MCA circular no. GSR 627(E) dated 29th August, 2014 has decided to charge the amount of Rs. 13.26 crores as aforesaid to the Statement of profit & loss instead of charging the surplus in statement of profit & loss. The depreciation charged for the year is accordingly higher by Rs. 13.26 crores as compared to the disclosure in quarterly results.

Notes:

a. The Segment Revenue in the geographical segments considered for disclosure are on the basis of customer location.

b. In the case of Segment asset and segment capital expenditure the amount attributable to geographical segment "Outside India" is less than 10% of the respective Total assets and Total capital expenditure of the reporting enterprise and hence not disclosed separately.

7. Disclosure as required by Accounting Standard - AS 19 "Leases" of the Companies (Accounting Standards) Rules 2006.

a) The Company has taken various residential / godowns / offices premises (including Furniture and Fittings if any) under leave and licence agreements. These generally range between 11 months to 3 years under leave and licence basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in the Statement of Profit and Loss under Rent.

b) During the year the Company has taken on operating lease two manufacturing facilities of M/s. Krebs Biochemicals & Industries Limited for manufacturing of products at the said facilities. An amount of Rs. 39.44 crores has been paid as lease deposit. Since the lease is cancellable at the option of the Company, the further disclosure of committed lease payment are not made.

8. Disclosure as required by Accounting Standard - AS 27 "Financial Reporting of Interest in Joint Ventures" of the Companies (Accounting Standards) Rules 2006.

The Company is holding 49.02% of Shares in Avik Pharmaceutical Ltd. It is a Jointly Controlled entity in which the Company has a control of 49.02%. In the standalone Balance Sheet of the Company, Joint Venture interest is reported under Long term Investment at Cost. Proportionate share of the Company as on 31st March, 2015 in the assets, liabilities, income, expenditure, contingent liabilities and capital commitments of the Joint Venture company is as follows:

9. The company''s provision for diminution in value of investments in shares of National Druggist (Proprietary) Ltd. and Ipca Pharmaceuticals (Shanghai) Ltd. for Rs. NIL (Previous year Rs. 0.39 crore) and Rs. 0.05 crore (Previous year Rs. 1.00 crore) respectively is reversed in these consolidated accounts since the full loss of the said subsidiaries is accounted in this accounts.

10. In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

11. The balance sheet, Statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended 31st March''2015.

12. Previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable.


Mar 31, 2014

1. Disclosure as required by Accounting Standard - AS 17 "Segment Reporting" of the Companies (Accounting Standards) Rules 2006.

In accordance with AS-17 "Segment Reporting" The Company has only one reportable primary business segment i.e. Pharmaceuticals. However, the Company has secondary geographical segment which is disclosed in Consolidated Financial Statements as per AS-17.

2. Disclosure as required by Accounting Standard - AS 19 "Leases" of the Companies (Accounting Standards) Rules 2006.

The Company has taken various residential/go downs/offices premises (including Furniture and Fittings if any) under leave and license agreements. These generally range between 11 months to 3 years under leave and license basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in the Statement of Profit and Loss under Rent.

3. Contingent liabilities and commitments not provided for in respect of:

As at As at Particulars 31/03/2014 31/03/2013 (Rs. Crores) (Rs. Crores)

A. Contingent Liabilities

a) Bills discounted with banks 256.40 237.09 Since Realised (103.77) (150.79)

b) Other moneys for which the Company is contingently liable for tax, excise, customs 16.44* 11.82* and other matters not accepted by the Company Amount deposited under protest (4.08) (0.05)

c) Claims against the Company not acknowledged as debts 2.95 2.98

d) Corporate Guarantee given to others 8.28 2.28

e) Guarantees given by banks in favour of Govt.& others/ Letter of Credit opened against 82.71 62.44 which goods are not received * 258.93 165.77

B. Estimated amount of contracts remaining to be executed on capital account and not provided for:

- Tangible Assets 155.45 45.39

- Intangible Assets 28.16 6.29

183.61 51.68

C. Uncalled liability on partly paid shares 3.40 3.40

D. Other Commitments - -

*Note:- It includes Rs. 4.38 crores (Previous year Rs. 4.38 crores) towards interest and penalty demanded by excise department, Ankleshwar relating to erstwhile Tonira Pharma Limited since amalgamated with the Company and is not payable in accordance with the order passed by the Hon''ble Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad. The Department had moved the Hon''ble Gujarat High Court against the said CESTAT order and as per the order of the said Hon''ble High Court, the Company has furnished a Bank Guarantee of Rs. 2.00 crores(Previous year Rs. 2.00 crores) to the Department.

4. In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

5. The balance sheet, Statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended 31 st March''2014.

6. Previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable.


Mar 31, 2013

1. Disclosure as required by Accounting Standard - AS 17 "Segment Reporting" of the Companies (Accounting Standards) Rules 2006.

The entire operations of the Company relate to only one segment viz. pharmaceuticals. As such, there is no separate reportable segment under Accounting Standard - AS 17 on Segment Reporting.

2. Disclosure as required by Accounting Standard - AS 19 "Leases" of the Companies (Accounting Standards) Rules 2006.

The Company has taken various residential / godowns / office premises (including Furniture and Fittings if any) under leave and license agreements. These generally range between 11 months to 3 years on leave and license basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognised in the Statement of Profit and Loss under Rent.

3. Disclosure as required by Accounting Standard - AS 20"Earning Per Share"of the Companies (Accounting Standards) Rules 2006.

The earning per share is calculated by dividing the profit after tax by weighted average no. of shares outstanding for basic & diluted EPS.

4. a) The Company has entered into various derivatives transactions, which are not intended for trading or speculative purpose but to hedge the export receivable including future receivables and foreign currency loan interest rate risks.

b) The Company has continued its decision not to exercise the option available under amendment to AS 11 relating to "The effects of Changes in Foreign Exchange Rates" in respect of its Long Term Foreign Currency Monetary Items in respect of foreign currency loans for the acquisition of fixed assets.

c) The Company has following unhedged foreign exchange risk.

d) The Company has an annual average exports of USD 315 Million (Previous year USD 291 Million) of which the Company has partially hedged its receivables by the aforesaid options disclosed in para (a) above. The unhedged currency risk detailed in para (c) above has a natural hedge against the unhedged export receivables of USD 19.20 Million as at 31st March,2013 (Previous year USD 4.58 Million).

5. In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

6. The balance sheet, Statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended 31st March''2013.

7. Previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable.


Mar 31, 2012

A) Aggregate Shares issued under Employees Stock Option Scheme (ESOS) : 21,08,750 Equity Shares of Rs.2/- each (Previous year 19,87,500 Equity Shares)

b) Equity Share of Rs.10 each have been sub-divided into five equity shares of Rs.2/- each pursuant to the resolution passed by the shareholders at the Extra Ordinary General Meeting held on 25th February, 2010.

c) 53,210 Equity Shares of Rs. 10 each in 2009-10 and 2,03,009 Equity Shares of Rs. 10/- each in 2008-09 have been extinguished under Buy back Scheme.

d) The outstanding equity shares to be issued aggregating to Rs.0.06 crore representing 3,22,704 equity shares of Rs. 2/- each of the Company under the scheme of amalgamation of Tonira Pharma Ltd. with the Company is shown as Equity Share Suspense account under Share Capital.

e) As per the Scheme of Amalgamation, the authorised share capital of Tonira Pharma Limited of 1,20,00, 000 equity shares of Rs.10/- each is added to the Authorised Share Capital of the Company as 6,00,00,000 equity shares of Rs 2/- each amounting to Rs. 12.00 Crores.

# Due to corporate action on 23rd March,2010 for sub-division of 1 fully paid up equity share of Rs. 10/- each into 5 fully paid up equity shares of Rs.2/- each,each of the outstanding options now represent a right but not an obligation to the option grantee to apply for 5 fully paid up equity shares of Rs.2/- each of the Company at exercise price duly adjusted for the said corporate action.

I) Merger of Tonira Pharma Limited with the Company

Pursuant to scheme of amalgamation ('the scheme') of Tonira Pharma Limited (TPL) with Ipca Laboratories Limited (ILL) under the provisions of Sections 391 to 394 of the Companies Act, 1956 as sanctioned by the Honorable High Court of Judicature of Bombay vide its order dated 30th March, 2012 and by the Honorable High Court of Judicature of Gujarat vide its order dated 2nd April'2012, which orders have been filed with the Registrar of Companies on 15th and 16th of May, 2012, respectively, to make the scheme effective, all the assets and liabilities of the said TPL were transferred to and vested in the Company as a going concern with effect from the appointed date i.e. 1st April'2011. Accordingly, this scheme of amalgamation has been given effect to in these accounts.

Salient Features of the scheme of Amalgamation

TPL was engaged in the business of manufacturing/marketing of Drug Intermediates and Active Pharmaceutical Ingredients. ILL is engaged in the business of manufacturing/marketing of Drug Intermediates, Active Pharmaceutical Ingredients and Pharmaceutical formulations.

The appointed date for the purpose of this amalgamation is 1st April, 2011

In accordance with the scheme approved, the accounting for this amalgamation has been done in accordance with the "Pooling of Interest Method" referred to in Accounting Standard 14- "Accounting for Amalgamation" of the Companies (Accounting Standards) Rules, 2006.

Accordingly, ILL has accounted for the Scheme in its books of accounts with effect from the Appointed Date i.e. 1st April, 2011 as under :

i) With effect from the Appointed Date, all assets and liabilities appearing in the books of accounts of TPL have been transferred to and vested in ILL and have been recorded by ILL at their respective book values.

ii) In consideration of the transfer of the business as a going concern, the Company shall issue 6 fully paid-up equity shares of Rs. 2/- each of the Company for every 100 equity share of Rs. 10/- each fully paid-up of TPL to the equity shareholders of TPL. Pending allotment, the outstanding equity shares to be issued aggregating to Rs.0.06 crore representing 3,22,704 equity shares of Rs. 2/- each of the company is shown as Equity Share Suspense account under Share Capital.

iii) The equity shares in TPL held by the Company have been cancelled under the scheme.

iv) The difference between the book value of net identifiable assets and liabilities of TPL transferred to ILL pursuant to this scheme and the consideration being the value of New Equity Shares to be issued & allotted by ILL amounting to Rupees 0.55 Crore has been credited to capital reserve account.

v) Accordingly, 3,22,704 equity shares of ILL of Rs. 2/- each fully paid up are to be issued to the shareholders of TPL under this amalgamation. The record date fixed for this purpose is 31st May, 2012.

vi) All inter company transactions have been eliminated on incorporation of the accounts of TPL in the Company.

vii) The Company shall proceed to issue these equity shares to the shareholders of TPL in due course of time.

viii) The transactions of the business of TPL with effect from 1st April, 2011 have been incorporated in the Company's accounts on the basis of the Audited Financial Statements of the business, which is treated as a Company's Branch, as audited by M/s Mitesh P Vora & Co. Chartered Accountants, the statutory auditors of the erstwhile TPL. They were appointed by the Board of Directors of the Company as its Branch Auditors.

In view of the aforesaid amalgamation, the figures for the current year are not strictly comparable to those of the previous year.

A. Share Application Money Pending Allotment

The share application money pending allotment of Rs. 10,500 is received as commitment deposit from employees/directors under Employee Stock Option scheme (ESOS) on grant of stock options pending allotment.

The above ESOS is in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) guidelines, 1999.

52,500 shares of Rs. 2.00 each are to be issued against the commitment money so received at an exercise price of Rs.63 per share.

The company has sufficient authorised capital to cover the share capital amount on allotment of shares out of share application money.

The above 52, 500 shares are to be issued at a premiun of Rs. 61 per share.

The shares will be allotted in accordance with the scheme before 31st March, 2013.

a) Security and repayment terms

i) Debentures

12.75% Secured Redeemable Non-Convertible Debentures amounting to Rs 33.33 Crores (Previous year Rs. 50.00 Crores) - Redeemble in 3 equal annual instalments of which one instalment is paid. Secured by mortgage over Company's office premises at Ahmedabad, Gujarat, first pari passu charge over movable & immovable properties at Dehradun & pari passu first charge on Company's plant & machinery at Ratlam. The schedule of repayment is : 26th December, 2013 Rs.16.66 Crores ; 26th December, 2012 Rs.16.67 Crores.

9.95% Secured Redeemable Non-Convertible Debentures of Rs.50.00 Crores (Previous year Rs. NIL) - Redeemble at the end of 3rd year by exercising put/call option or, at the end of 5th year, both from the date of issue i.e. 3rd October 2011. Secured by mortgage over Company's office premises at Ahmedabad, Gujarat and first pari-passu charge over movable property of the Company includes plant & machinery situated at Ratlam, Athal (Silvassa), Indore (M.P.), Piparia (Silvassa), Pithampur (Indore) and Dehradun.

ii) Rupee Term Loan

HDFC Bank Ltd.- Rs. NIL (Previous year Rs. 18.67 Crores) Repayble in 15 equal quarterly instalments from 16th May,2009, secured by first pari passu charge by way of hypothecation of movable fixed assets both present and future except on movable fixed assets at Pithampur, Indore. The said loan is prepaid before the Balance sheet date.

Bank of Baroda - Rs. NIL (Previous year Rs.15.00 Crores) Repayble in 3 equal annual installments from 30th March,2012, secured by first charge by way of equitable mortgage of land and building of the Company situated at Indore(except Pithampur), Dehradun, Ratlam, Mumbai, Athal & Piparia. The said loan is prepaid before the Balance sheet date.

iii) Foreign Currency Term Loan

ICICI Bank Offshore Banking Unit - Rs. 7.64 Crores(Previous year Rs. 20.07 Crores) Repayable in 8 semi annual instalments from 10th October,2008, secured by exclusive charge on the entire movable fixed assets at SEZ, Indore, Pithampur and pari passu first charge on movable fixed assets at Kandla.

BNP PARIBAS, Singapore Branch - a) Rs.50.88 Crores (Previous year Rs.56.49 Crores) Repayable in 4 equal semi annual installments from 20th March,2013 , secured by first pari passu charge by way of hypothecation of movable fixed assets both present and future except on movable fixed assets at Pithampur, Indore.

b) Rs.50.88 Crores (Previous year Rs. NIL) Bullet Repayment at the end of 5th year on 6th October,2016 ,Secured by first pari passu charge by way of hypothecation of movable fixed assets both present and future except on movable fixed assets at Pithampur, Indore.

CITI Bank N.A. Bahrain Branch - Rs.19.99 Crores (Previous year Rs. 22.30 Crores) Repayable in 14 equal quarterly installments from 21st July,2011, secured by first pari passu charge by way of hypothecation of all the movable fixed assets both present and future except on movable fixed assets at Pithampur, Indore.

DBS Bank, Singapore Branch - Rs. 34.09 Crores (Previous year Rs. 39.69 Crores) Repayable in 9 semi annual instalments from 16th March,2011, secured by first pari passu charge by way of hypothecation of all the movable fixed assets both present and future except on movable fixed assets at Pithampur, Indore.

Barclays Bank PLC, London Branch - Rs. 50.88 Crores (Previous year Rs. 44.60 Crores) Repayable in 13 quarterly installments from 24th May,2012, secured by first pari passu charge on the plant & machinery of the Company except assets at Pithampur, Indore.

HSBC Mauritius - Rs. 101.76 Crores (Previous year Rs. NIL) Repayable in 7 half yearly installments from 31st July,2013, secured by first pari passu charge on the plant & machinery of the Company except assets at Pithampur, Indore.

Loans and advances to subsidiary companies (Sr. No. i to iv) are without interest and there is no repayment schedule fixed. Loans and advances to subsidiary/associate (Sr. No. v to x) are interest bearing loans.

b) Investment by the loanee in the shares of the Company :

None of the loanees have, per se , made investments in the shares of the Company.

To align the depreciation policy and the rates of the amalgamating (transferee) Company with those of the amalgamated (transferor) Company, the depreciation hitherto charged on the assets of the amalgamated Company has been reviewed and differential depreciation as compared to the policy and rates of the amalgamated Company is written back as at 01/04/2011, being the appointed date. The differential depreciation charged in the books of the amalgamating Company as compared to the method and rates followed by the amalgamated Company is Rs. 5.70 crores and is written back to the profit and loss account under the head depreciation. The Depreciation for the year is therefore lower and the Profit and Balance in Reserves and Surplus is higher by Rs. 5.70 crores.

1. Disclosure as required by Accounting Standard - AS 17 "Segment Reporting", issued by the Institute of Chartered Accountants of India

The entire operations of the Company relate to only one segment viz. pharmaceuticals. As such, there is no separate reportable segment under Accounting Standard - AS 17 on Segment Reporting.

2. Disclosure as required by Accounting Standard - AS 19 "Leases", issued by the Institute of Chartered Accountants of India

The Company has taken various residential / godowns / offices premises (including Furniture and Fittings, if any) under leave and licence agreements. These generally range between 11 months to 3 years under leave and licence basis. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in the Statement of Profit and Loss under Rent.

3. Contingent liabilities and commitments not provided for in respect of :

Particulars 2011 -2012 2010 -2011 Rupees in Crores Rupees in Crores

A. Contingent Liabilities

a) Bills discounted with banks 147.24 106.95

Since Realised (85.08) (47.85)

b) Other moneys for which the Company is contingently liable for tax, excise, customs 18.53* 11.39 and other matters not accepted by the Company

c) Claims against the Company not acknowledged as debts. 0.01 0.01

d) Corporate Guarantees given to bankers of associates - 30.00 and subsidiaries for which the Company holds counter guarantees.

e) Corporate Guarantee given to others 2.28 2.28

f) Guarantees given by banks in favour of Government 65.74 96.75 and others/ Letter of Credit opened against which goods are not received *

148.72 199.53 B. Estimated amount of contracts remaining to be executed on capital account and not provided for :

- Tangible Assets 52.04 78.70

- Intangible Assets 2.44 5.08

54.48 83.78

C. Uncalled liability on partly paid shares 4.48 4.48

D. Other Commitments - -

*Note : It includes Rs. 4.38 crores towards interest and penalty demanded by excise department, Ankleshwar and is not payable in accordance with the order passed by the Hon'ble Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad. The Department had moved the Hon'ble Gujarat High Court against the said CESTAt order and as per the order of the said Hon'ble High Court, the Company has furnished a Bank Guarantee of Rs. 2.00 crores to the Department. The Bank guarantee is obtained from Corporation Bank, Kandivali against 100% margin in the form of Fixed Deposit Receipt (FDR).

4. a) The Company has entered into various derivatives transactions, which are not intended for trading or speculative purpose but to hedge the export receivable including future receivables and foreign currency loan interest rate risks.

b) The Company has continued its decision not to exercise the option available under amendment to AS 11 relating to "The effects of Changes in Foreign Exchange Rates" in respect of its Long Term Foreign Currency Monetary Items in respect of foreign currency loans for the acquisition of fixed assets.

d) The Company has an annual average exports of USD 291 Million (Previous year USD 224 Million) of which the Company has partially hedged its receivables by the aforesaid options disclosed in para (a) above. The unhedged currency risk detailed in para (c) above has a natural hedge against the unhedged export receivables of USD 4.58 Million (Previous year USD 17.63 Million) as at 31st March, 2012.

5. In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

6. The balance sheet, Statement of profit and loss, cash flow statement, statement of significant accounting policies and the other explainatory notes forms an integral part of the financial statements of the Company for the year ended 31st March, 2012.

7. Prior Period Comparison

The Company has reclassified the published previous year figures to conform to the norms of the Revised Schedule VI. The adoption of the revised Schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.


Mar 31, 2010

1. Amount of long term loans repayable in the following 12 months aggregate to Rs. 41.18 crores (Previous year Rs. 72.00 crores).

2, Provision for taxation includes provision for wealth tax of Rs. 0.05 crore (Previous year Rs,0.05 crore).

3. In the opinion of the Board of Directors, all the current assets, loans & advances have value on realisation atleast of an amount equal to the amount at which they are stated in the Balance Sheet.

4. Bank balances:

a) Balances with scheduled banks in Schedule 8 include Rs.1.16 crore (Previous year Rs. 1.05 crore) in unpaid dividend account.

b) Balances with non-scheduled banks in Schedule 8:

5. The disclosure of information related to Micro, Small and Medium Enterprises creditors is made on the basis of information of registration under the Micro, Small and Medium Enterprises Development Act 2006 given to the Company by the creditors. This information is relied upon by the auditors.

6. Unpaid dividend does not include any amount to be credited to Investor Education and Protection fund.

7. a) The Company has made provision for diminution in the value of Investments in shares of Mangalam Drugs & Organics Ltd. Of Rs.2.99 Crores.

b) The Company has made further provision of Rs. 0,09 crores towards diminution in the value of Investment in respect of its investments in Laboratories Ipca Do Brasil Ltda. (wholly owned subsidiary) on account of the unviability of the business in Brazil. The company will take steps to close down its subsidiary and liquidate its investments.

8. a) In terms of the Scheme of Buy-Back of the Equity Shares of the Company, the Company has upto the closure of the scheme bought back 2,56,219 equity shares of Rs.10 each from open market operations at an average price of Rs. 368.43.These shares have been extinguished and the paid up capital has been reduced accordingly by Rs. 0.26 crore. The cost of purchase in excess of the nominal value of the shares has been debited to General Reserve Account, The Company has also transferred an amount of Rs. 0.26 crore to the Capital Redemption Reserve by debit to the General Reserve as required by the provisions of the Companies Act.

b) The Company has reversed back the proposed dividend of Rs.0.01 crore on equity shares that were extinguished between the date of previous Balance Sheet and the record date for declaration of dividend,

9. Disclosure under Accounting Standard -29 "Provisions, Contingent Liabilities and Contingent Assets",

Note:- The Company has during the year, more specifically on 25.02.10, sub divided the face value of each equity share from Rs. 10 to Rs. 2 each and accordingly issued 5 equity shares of Rs. 2 each against each share of Rs, 10,On account of this sub division, the outstanding equity shares as at 31st March, 2010 is 12,52,27,655 including 15,08,750 equity shares issued on exercise of ESOPs by the employees. The earnings per share for the current year and the previous year is calculated on the face value of Rs. 2 each as required by AS-20, Earnings Per Share, of the Companies (Accounting Standards) Rules, 2006.

10. Interest in Joint Venture:

The Company has a Joint Venture Company in Middle East by name of Activa Pharmaceuticals (FZC), SAIF - Zone, Sharjah in which it has a control of 50%. In the standalone Balance Sheet of the Company, Joint-Venture interest is reported under Long term Investment at Cost. During the year, the said JV has been shut down and liquidated. The excess of Rs. 0.23 crore over the value of Investment has been included in Profit on Sale of Investments, The final accounts post liquidation has been received and necessary effects have been given, Proportionate share of the Company as on 31st March 2010 in the assets, liabilities, income, expenditure, contingent liability and capital commitments of the Joint Venture company is as follows:

11. a) If the compensation cost of shares issued under Employees Stock Option Scheme 2006 (ESOS) is determined in accordance with the fair value approach described in the Guidance Note, the Companys net profit for the year ended March 31, 2010 as reported would change to amounts indicated below:

12. Disclosure under Accounting Standard - 19 "Leases", issued by the Institute of Chartered Accountants of India:

The Company has taken various residential/godowns/office premises (including Furniture and Fittings if any) under leave and licence agreements for periods which generally range between 11 months to 3 years. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognised in the Profit and Loss Account under Rent.

13. a) The Company has entered into various derivatives transactions, which are not intended for trading or speculative purpose but to hedge the export receivable including future receivables and foreign currency loan interest rate risks.

d) The Company has an annual average exports of USD 171 Million of which the Company has partially hedged its receivables by the aforesaid options disclosed in para (a) above. The unhedged currency risk detailed in para (c) above has a natural hedge against the unhedged export receivables of USD 54.01 Million (Previous year 23.44 Million) as at 31st March, 2010.

14, The entire operations of the Company relate to only one segment, viz. pharmaceuticals. As such, there is no separate reportable segment under Accounting Standard - AS 17 on Segment Reporting.

15. Related Party Disclosure as required by Accounting Standard - AS 18 issued by the Institute of Chartered Accountants of India.

16, Details of rounded off amounts

The financial statements are represented in Rupees crore. Those items which are not represented in the financial statement due to rounding off to the nearest Rs. crore are given below.

17. Previous years figures have been regrouped and rearranged wherever necessary.

 
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