Home  »  Company  »  JHS Svendgaard Labor  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of JHS Svendgaard Laboratories Ltd.

Mar 31, 2015

1. BACKGROUND

JHS Svendgaard Laboratories Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing a range of oral and dental products for elite national and international brands. The main portfolio of the Company is to carry out manufacturing and exporting of oral care and hygiene products including toothbrushes, toothpastes, mouthwash, sanitizers and job work of detergent powder.The Company's shares are listed for trading on the National Stock Exchange and the Bombay Stock Exchange in India.

2. Terms / rights attached to equity shares

Voting :

Each holder of equity share is entitled to one vote per share held."

"Dividends:

The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case where interim dividend is distributed. During the year ended March 31,2015 and March 31, 2014, no dividend has been declared by the Company."

"Liquidation:

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts, if any. Such distribution amount will be in proportion to the number of equity shares held by the shareholders."

3. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceeding the reporting date:

65,45,245 equity shares issued to the shareholders of merged entities pursuant to the scheme of amalgamation in the finacial year 2012-13

1. In the financial year ended March 31, 2012, the Company had received capital subsidy under the Central Capital Investment Subsidy Scheme, 2003 of the Government of India. The subsidy received is being amortised over the useful life of the assets which is estimated as 10 years.

2. Details of security, and repayment terms of One Time Settlement with ICICI Bank / Bank of India (lender banks)

* Security

a. Pari passu charge on movable and non-movable fixed assets being financed by the facility.

b. Pari passu charge on uncharged net block and on current assets of the company.

c. Pari passu charge and Equitable mortgage on the following properties of the Company with Banks

i. Khata Khatauni No. 13/14, Khasra No. 420/353 measuring 2.05 bighas.

ii. Khasra no.89 measuring 4.18 bighas.

iii. Khata Khatauni No. 6/6, Khasra No. 179/82 measuring 3.15 bighas.

iv. Khata no. 85/1, measuring 4 bighas.

v. Khata Khatauni No. 27/28, Khasra No. 418/67 measuring 4.60 bighas situated at Mouza Kheri, Kala-Amb, Tehsil Nahan, District, Sirmour, HP (total land measuring 19.04 bighas) in the name of Company

vi. Equitable mortgage of free hold project land measuring in Khata Khatauni no. 19 min/20 min, and Khasra no 86 measuring 3-3 bighas, Khata Khatauni no 21/22, Khasra No. 417/67, measuring 3 bigha khatra khatauni no 23/24, Khasra no 173/60 measuring 2-18 bighas 3 kites, total measuring 9-1 bighas, situated at Mauza Kheri, Tehsil Nahan, District - Sirmour, Himachal Pradesh.

d. Personal gurantee of Mr. Nikhil Nanda limited to the value of 47,04,446 shares of the Company * Refer Note No. 29 (ii)

3. Details of security, and principal repayment terms of Vehicle loans

Vehicle loans Rate of interes Interest rate is in the range of 8% p.a to 12% p.a. Repayment terms Repayable within a period of 60 months. Security Respective assets are hypothecated against the loans taken to acquire such vehicles.

(i) In the financial year 2012-13, as per the management's decision, the Company had written off its unrealizable trade receivables amounting Rs. 48.28 crores which were set-off against Securities Premium Account directly. This was subject to approval of the application made to the Hon'ble High Court of Himachal Pradesh for ratifying the said adjustment. The management has decided to withdraw the said application from the Hon'ble High Court. Accordingly, during the year the Company has reversed the treatment given in the earlier year for write off amounting to Rs. 48.28 crores by crediting Securities Premium Account and charged the same to the Statement of Profit and Loss as on March 31, 2015.

(ii) During the year ended on March 31, 2015, the Company has entered into "One Time Settlement" (OTS) of dues with its lender banks to clear all the outstanding loans & interest thereon. As per the terms of the OTS the Company was required to pay Rs. 23.50 crores as the OTS amount before 30.06.2015

As a result of OTS, the unpaid interest on borrowings outstanding as on March 31, 2014 has been reversed and credited to the statement of profit and loss. Further, the waiver under OTS has been proportionately apportioned between the outstanding liabilities towards the various working capital facilities and term loan as detailed under:

* the waiver amount on account of working capital facilities has been credited to the Statement of Profit and Loss ;

* the waiver amount on account of term loan facilities amounting to Rs. 30.82 crores has been credited to Capital Reserve directly being in the nature of capital receipt.

As on the date of signing of the result the Company has made the entire payments as per the terms of the OTS agreed with the banks & consequently the banks has also issued no dues certificates to the Company. Consequently the banks has released the charges on the assets of the Company and withdrawn the proceedings from debt recovery tribunal.

(iii) As on date, the Company has realised its foreign trade receivables which were outstanding since long and against which the Company had made provisions in the earlier year. Consequently, the provision equal to amount recovered has been written back in the financial statements of current year.

(iv) During the year, the Company as part of its regular recoverability evaluation process has identified certain loans & advances and capital advances which were doubtful of recovery or did not have recoverable value equivalent to the book value. Accordingly, on a prudent basis, the management has recorded a provision of Rs. 12.21 croes (previous year Rs. 7.28 crores ) in the books of account towards such advances or portions thereof, which were doubtful of recovery. The management is continuously monitoring the settlement of these balances and is regularly following up with respective parties for recovery of the said advances. The management believes that other advances which have not been provided for, although have been long outstanding are fully recoverable, hence, the management believes that existing provision recorded in books is sufficient to cover any possible future losses on account of non recovery of such advances.

(v) The Company was unable to publish its quarterly financial results within the time as specified under clause 41 of the listing agreement due to some unforeseen reasons beyond the control of the Company. The Company has provided penalty amounting to Rs. 0.47 Crore levied by the Stock Exchanges (i.e. BSE & NSE) from the date of default i.e. 15.08.2014 to 31.03.2015 for non compliance of clause 41 of the listing agreement.

(vi) During the year, the Company carried out a detailed exercise to review its long outstanding payables and pursuant to such exercise, has written back an amount of Rs 0.96 Crore payable to various parties as in the opinion of the management such amounts were not payable to respective parties. Such old unpaid balances were mainly due to the fact that certain vendors had supplied less than billed quantity, defective or sub-standard material or material not meeting specifications given by the Company. The management does not expect any liability to devolve on the Company in respect of balances so written back.

4. Contingent liabilities

I. Claims against the Company not acknowledged as debts:

a. Sales tax demand for non-submission of statutory forms for the year 2007-08 amounting to Rs Nil (March 31,2014 Rs 4,73,011)

b. Winding up petition filed against the Company amounting to Rs Nil (March 31,2014 Rs 12,00,000)

c. Matters under litigation

i. The Company is a party to various legal proceedings in the normal course of business. The Company's pending proceedings/ litigations comprise of claims against the Company by employees, vendors & customers amounting to Rs 3,05,78,000 (March 31,2014 Rs 14,61,000). The said claims however are disputed by the Company and the Company has also filed its counter claims. The Company has reviewed all its pending proceedings and litigations and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in the financial statements.

ii. One of the major customers of the Company has wrongfully decided not to renew / terminate the contracts across all the business segments due to which certain assets got idle. However, in order to safeguard the interest of the shareholders, the Company has been pursuing litigation and has sought specific performance of the contract as well against these arbitrary and unjust acts of the multinational Company. The Company has filed various suits against the said customer amounting to Rs 6,29,99,80,817 and vice versa said customer has also filed counter claims against the Company amounting to Rs 2,06,14,52,365.

II. Others

Bank Guarantee issued by banks amounting to Rs 69,10,605 (March 31,2014 Rs 1,19,10,605 ).

The Company does not expect the outcome of these proceedings and litigations to have a material adverse effect on the Company's financial conditions, results of operation or cash flows.

b) Defined benefit plan

Gratuity - The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit (PUC) 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 obligations.

Leave benefits - Provision for leave benefits is made by the Company on the basis of actuarial valuation using the Projected Unit Credit (PUC) method.

5. Related party disclosures

The disclosures as required by the Accounting Standard -18 (Related party disclosures) are as under: a. Names of related parties and description of relationship:

S. No. Relationships

i. Enterprise under control of the reporting enterprise (Subsidiary companies)

ii. Individuals having significant influence over the Company and Key Management Personnel (KMP)

ii. Relatives of persons in (ii)

iii. Enterprises over which significant influence can be exercised by persons mentioned in (ii) and (iii) above or enterprise that have a member of key management in common with the reporting enterprise.

S. No. Name of Related Party

i. a) Jones H. Smith, FZE (United Arab Emirates)

b) JHS Svendgaard Dental Care Limited (India)

c) JHS Mechanical and Warehousing Private Limited (India)

ii. a) Mr. Nikhil Nanda (Managing Director)

b) Mr. Vishal Sarad Shah (Whole time Director w.e.f 14.02.2015)

c) Mr. Paramveer Singh (Chief Executive Officer)

d) Mr. Neeraj Kumar (Chief Financial Officer)

e) Ms Isha Sablok (Company Secretary upto 13.04.2015)

f) Mr Dheeraj Kumar Jha (Company Secretary w.e.f 13.04.2015)

ii. a) Mrs. Sushma Nanda

iii. a) Berco Engineering Private Limited

b) Dr. Fresh Inc, USA.

c) Sunehari Exports Limited

d) Number One Real Estate Private Limited

e) JHS Svendgaard Infrastructure Private Limited

f) Apogee Manufacturing Private Limited

g) Dr. Fresh IT Parks Private Limited

h) Magna Waves Impex Private Limited

i) Secure Rail India Private Limited

i) During the year, the Company has revised the depreciation rates based on the useful lives of its all tangible assets as prescribed in Part C of Schedule II to the Companies Act, 2013 except moulds & dies which are depreciated over the useful life of 5 years as estimated by the management. The management has identified tangible fixed assets and their major components and has reviewed / determined their remaining useful lives. Accordingly, the depreciation on tangible fixed assets is provided for in accordance with the provisions of Part C of Schedule II to the Companies Act, 2013. In respect of assets whose remaining useful life is Rs.Nil', as on March 31,2014, their carrying amount of Rs. 38,95,012 after retaining the residual value as on 1st April, 2014 has been charged to the Statement of Profit & Loss. On account of the above changes, depreciation for the current year is lower by Rs. 1,19,56,650.

ii) During the year, the Company has carried out a detailed exercise to review its long outstanding capital payables and pursuant to such exercise, the Management is of view that these amounts were not payable to such parties. These old unpaid balances were mainly due to the fact that certain vendors had supplied defective or sub-standard material or material not meeting specifications given by the Company. The management does not expect any liability to devolve on the Company in respect of above unpaid balances. Consequently, the cost of assets has been adjusted during the year amounting to Rs 1,82,60,239 and depreciation charged thereon has also been reversed by Rs 36,02,771.

iii) One of the major customers of the Company has wrongfully decided not to renew / terminate the contracts across all the business segments due to which certain assets got idle. However, in order to safeguard the interest of the shareholders, the Company has been pursuing litigation and has sought specific performance of the contract as well against these arbitrary and unjust acts of the multinational company. Hence, as the matter is sub-judice, the management cannot even consider the impairment as that would impact upon the litigation.

6. Deferred Tax

In accordance with Accounting Standard 22 'Accounting for taxes on income', in view of recurring losses and in absence of reasonable certainty, the Company has not recognized deferred tax assets amounting to Rs 13,08,43,367/- during the year ended on March 31,2015. Further, there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized, as Company is enjoying tax benefit under section 80-IC of the Income Tax Act, 1961. Therefore no deferred tax assets have been recognized on brought forward business losses and unabsorbed depreciation during the year ended on March 31,2015. Consequently, the net deferred tax assets/liability as at March 31,2015 is Nil.

7. Obligation on long term, cancellable operating lease:

The Company has taken premises under cancellable operating leases with an option of renewal at the end of the lease term with mutual consent. There are scheduled escalation clauses. Lease rental expense of Rs. 28,91,581 (March 31, 2014: Rs. 34,57,755) charged to the Statement of Profit and Loss during the year.

8. In accordance with Micro, Small and Medium Enterprises Development Act, 2006 which came into force with effect from October 2, 2006, the Company is required to identify the Micro, Small and Medium suppliers(MSME) and pay them interest on overdue amount beyond the specified period irrespective of the terms agreed with the suppliers. The Company has sent e-mails/letters by post to its vendors for obtaining above required information. The Company has not been able to identify the MSME suppliers in absence of written response from its vendors, therefore the liability of interest, if any, cannot be estimated. Management is of the opinion that there will be no liability in view of supplier profile of the Company.

9. Details of derivative instruments and unhedged foreign currency exposures as at March 31, 2015 are as under:

(a) There are no derivative instruments during the year and as at March 31, 2015 and March 31,2014.

(b) Particulars of unhedged foreign currency exposure as on March 31,2015:

10. The Company is not meeting the eligibility criteria as prescribed in section 135 of Companies Act 2013 for spending on corporate social responsibility and hence no such expenditure has been incurred during the year.

11. Balances shown under trade receivables, group companies, loans & advances, trade payables and other liabilities are subject to reconciliation/ confirmation and respective consequential adjustments.

12. Previous year figures have been regrouped/ reclassified wherever considered necessary to confirm to the presentation of current year's financial statements.


Mar 31, 2014

1. BACKGROUND

JHS Svendgaard Laboratories Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing a range of oral and dental products for elite national and international brands. The main portfolio of the Company is to carry out manufacturing and exporting of oral care and hygiene products including toothbrushes, toothpastes, mouthwash, sanitizers and job work of detergent powder.

The Company''s shares are listed for trading on the National Stock Exchange and the Bombay Stock Exchange in India.

2 : SHARE CAPITAL

a) Terms / rights attached to equity shares

Voting:

Each holder of equity share is entitled to one vote per share held.

Dividends:

The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case where interim dividend is distributed. During the year ended March 31,2014 and March 31,2013, no dividend has been declared by the Company.

Liquidation:

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts, if any. Such distribution amount will be in proportion to the number of equity shares held by the shareholders.

2.1 During the financial year ended March 31,2012, the Company had received capital subsidy under the Central Capital Investment Subsidy Scheme, 2003 of the Government of India. The subsidy received is being amortised over the useful life of the assets which is estimated as 10 years.

3.1 The Company has defaluted in repayment of principal and interest (as specified in footnote 6.2) on various facilities availed from ICICI Bank Limited and Bank of India. The Company is in default since previous year ended March 31,2013 and has failed to make good the default till date. During the current year, ICICI Bank Limited has filed a suit with Debt Recovery Tribunal (DRT) for recovery for all outstanding amounts. Accordingly, during the year, the Company has classified entire principal amount oustanding due to ICICI Bank Limited aggregating Rs.442,507,333 as current liability (Refer note 11).

4.1 The Company has defaluted in repayment of principal and interest on various facilities availed from ICICI Bank Limited and Bank of India. The Company is in default since previous year ended March 31,2013 and has failed to make good the default till date. During the current year, ICICI Bank Limited has filed a suit with Debt Recovery Tribunal (DRT) for recovery for all outstanding amounts. Accordingly, during the year, the Company has classified entire principal amount oustanding due to ICICI Bank Limited aggregating Rs. 442,507,333 as current liability (Refer note 11).

5.1 During the previous year ended March 31,2013, the Company, with a view to present a true and fair view in the financial statements, had written off trade receivables amounting Rs482,892,640 by setting off against the securities premium account as those receivables were considered non recoverable despite persistent efforts for recovery and legal action against some of the parties. The Company had passed a special resolution in the Extra Ordinary General Meeting held on April 25, 2013 to approve this arrangement and had subsequentely filed relevant petition with the Honourable High Court of Himachal Pradesh, on May 24 2013.

5.2 Includes amount due from related parties. Refer note 36.

6.1 Margin money deposits with a carrying amount of Rs.3,397,293 (March 31,2013: Rs 3,096,560) are with various government authorities.

7.1 There is no production in taxable units of the Company in current and previous year hence excise duty is nil.

8.1 This is exclusive of interest expense amounting Rs nil capitalised during the year (March 31,2013: Rs 2,696,794).

9.1 Depreciation on tangible assets for previous year excludes depreciation amounting to Rs. 45,230,144 which relates to amalagamation and which has been shown as extra ordinary item.

10: EXCEPTIONAL ITEMS

(a) During the year, the Company as part of its regular recoverability evaluation process has identified certain trade receivables which were doubtful of recovery or did not have recoverable value equivalent to the book value. Accordingly, on a prudent basis, the management has recorded a provision of Rs.146,360,909 in the books of account towards such trade receivables or portions thereof, which were doubtful of recovery. The management is continuously monitoring the settlement of these balances and is regularly following up with respective parties for recovery of the said trade receivables. The management believes that existing provision recorded in books is sufficient to cover any possible future losses on account of non recovery of such trade receivables.

(b) During the year, the Company as part of its regular recoverability evaluation process has identified certain capital and other advances which were doubtful of recovery or did not have recoverable value equivalent to the book value. Accordingly, on a prudent basis, the management has recorded a provision of Rs.72,838,186 in the books of account towards such advances or portions thereof, which were doubtful of recovery. The management is continuously monitoring the settlement of these balances and is regularly following up with respective parties for recovery of the said advances. The management believes that other advances which have not been provided for, although have been long outstanding are fully recoverable, hence, the management believes that existing provision recorded in books is sufficient to cover any possible future losses on account of non recovery of such advances.

(c) During the year, the Company carried out a detailed exercise to review its long outstanding payables and pursuant to such exercise, has written back an amount of Rs.154,501,657 payable to various parties as in the opinion of the management such amounts were not payable to respective parties. Such old unpaid balances were mainly due to the fact that certain vendors had supplied less than billed quantity, defective or sub-standard material or material not meeting specifications given by the Company. The management does not expect any liability to devolve on the Company in respect of balances so written back.

11. Contingent liabilities (Amount in Rs March 31, 2014 March 31, 2013

Claims made against the Company not acknowledged as debts

a. Sales tax demand for non submission 473,011 473,011 of statutory forms for the year 2007-08 (paid under protest Rs 473,011, March 31, 2013: Rs 473, 011) (Refer footnote i)

b. Winding up petition filed against 1,200,000 - the Company (Refer footnote ii)

c.Case filed by fixed assets vendor for 1,461,000 1,461,000 moulds and legal charges

i. There was a sales tax demand for non submission of statutory forms for the year 2007-08. The Company had preferred an appeal before the Commissioner of Sales tax and deposited the amount under protest. The demand has been deleted by Additional Commissioner, Sales tax, Noida vide its order dated May 20, 2014 which is now refundable.

ii. A service provider of the Company had filed a petition for winding of the Company before the Hon''ble High Court of Himachal Pradesh at Shimla. The Hon''ble high Court of Himachal Pradesh at Shimla has decided the case but has not pronounced its judgement and reserved it for a later date. The Management is of the opinion that there will be no likely outflow and the judgement would be in favour of the Company. Hence, no provision is required in the books.

12. Employee benefit obligations

As per Accounting Standard 15 "Employee Benefits" the disclosures relating to employee benefits obligations defined in the Accounting Standard are given below:

b) Defined benefit plan

Gratuity - The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit (PUC) 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 obligations.

Leave benefits- Provision for leave benefits is made by the Company on the basis of actuarial valuation using the Projected Unit Credit (PUC) method.

V. Employer''s best estimate of contribution towards gratuity during the next year is Rs 747,415 (March 31, 2013: Rs 1,037,816)

Employer''s best estimate of contribution towards leave benefits during the next year is Rs 234,033 (March 31,2013: Rs 556,157) 35. Segment reporting (As per AS - 17 Segment Reporting)

In accordance with AS-17 "Segment Reporting", segment information has been given in the consolidated financial statements of JHS Svendgaard Laboratories Limited, and therefore, no separate disclosure on segment information has been given in these financial statements.

13. Obligation on long term, cancellable operating lease:

The Company has taken premises under cancellable operating leases with an option of renewal at the end of the lease term with mutual consent. There are scheduled escalation clauses. Lease rental expense of Rs 3,457,755 (March 31, 2013: Rs 3,084,036) charged to the Statement of Profit and Loss during the year.

14. In accordance with Micro, Small and Medium Enterprises Development Act, 2006 which came into force with effect from October 2, 2006, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue amount beyond the specified period irrespective of the terms agreed with the suppliers. The Company has sent e-mails to its vendors. However, in absence of written response from its vendors, the liability of interest, if any, cannot be reliably estimated. Management is of the opinion that there will be no liability in view of supplier profile of the Company.

15. Derivative instruments and un hedged foreign currency exposures as at March 31,2014 are:

There are no derivative instruments during the year and as at March 31,2014 (a) Interest rate swaps

The Interest on External Commercial Borrowings (ECB) and Foreign Currency Term Loan (FCTL) is agreed at Libor 1.50% spread on ECB and Libor 1.60% spread on FCTL. A hedging agreement was entered by the Company with ICICI Bank through which it was swapped to pay fixed Libor at 2.98 % for both ECB and FCTL fixing the total cost of interest to the Company at 4.48% for ECB and 4.58% for FCTL (i.e. 2.98% Libor the spread of respective loans). The same has been closed as at the March 31,2013.

16. The Company has appointed independent consultants for conducting a Transfer Pricing Study to determine whether the transactions with associate enterprises were undertaken at "arms length basis". Adjustments, if any arising from the transfer pricing study shall be accounted for as and when the study is completed. The management confirms that all international transactions with associate enterprises are undertaken at negotiated contracted prices on usual commercial terms. The Transfer Pricing Certificate Under Section 92 E for the year ending March 31, 2013 has been obtained and there are no adverse comments requiring adjustments in these accounts.

17. During the previous year, JHS Svendgaard Hygiene Products Limited (Transferor Entity No-1) and Waves Hygiene Products (Transferor Entity No-2), have been amalgamated into JHS Svendgaard Laboratories Limited (Transferee), on a going concern basis with effect from appointed date i.e. March 31,2010 pursuant to the order of Hon''ble High Court of Delhi and Hon''ble High Court of Himachal Pradesh:

a) The scheme of amalgamation was sanctioned by the Hon''ble High Court of Delhi vide its order dated August 30, 2011 and the Hon''ble High Court of Himachal Pradesh at Shimla, vide its order dated May 28, 2012.

b) The order of the Hon''ble High Court of Himachal Pradesh was submitted to Registrar of Companies, Chandigarh on June 25, 2012.

c) After receipt of final order of Hon''ble High Court of Himachal Pradesh approving merger the Company applied for certified copy of Delhi High Court order as it is required to be filed with Registrar of Companies, Delhi. Accordingly the said copy was obtained on August 6, 2012.

d) The order of Hon''ble High Court of Delhi was submitted to Registrar of Companies, Delhi on August 8, 2012.

e) The operations of erstwhile JHS Svendgaard Hygiene Products Limited and Waves Hygiene Products were also engaged in the similar

line of business into which JHS Svendgaard Laboratories Limited is engaged i.e. manufacturing of dental, oral care and hygiene products etc.

f) Pursuant to the scheme of amalgamation, JHS Svendgaard Laboratories Limited has issued shares to the shareholders of the transferor entities in the following manner:

i. The equity shareholders of JHS Svendgaard Hygiene Products Limited have been allotted 158 fully paid up equity shares of Rs10 each for every 100 fully paid up equity shares of Rs10 each held in Transferor Company No. 1.

ii. The partners of Waves Hygiene Products have been allotted 1,792,746 fully paid up equity shares of Rs 10 each in their capital contribution ratio.

g) In terms of the scheme, the assets and liabilities of the transferor entities have been accounted for at their book value as it stood in their books of account. Accordingly, the difference of Rs 19,973,776 in JHS Svendgaard Hygiene Products Limited and Rs 44,824,437 in Waves Hygiene Products between the value of net assets acquired and the consideration as mentioned in para above has been (debited)/ credited to the amalgamation reserve.

h) The amalgamation has been accounted for as per pooling of interest methods as referred to in paragraph 3(e) of ''Accounting Standard 14'' issued by The Institute of Chartered Accountants of India for an amalgamation in the nature of merger.

Pursuant to the scheme of amalgamation the following arrangements/ adjustments has been recorded in the books of the Company:

i. As a result of order of the Hon''ble High court of Delhi and the Hon''ble High court of Himachal Pradesh, the assets and liabilities and income and expenditure of transferor companies as in table 1 below stand vested in transferee Company w.e.f March 31, 2010 till March 31,2012. Since the figures could not be incorporated with the assets and liabilities of the year ended March 31, 2012 or prior years as the order of High courts were received after the finalization of financial statements of both the Companies, the assets and liabilities as at March 31,2012 (Table 2 below) have been added with the figures of transferee Company and profits of two years in transferor companies '' 83,824,177 have been shown as extra ordinary item in the Statement of Profit and Loss.

The following table summarizes the value of assets and liabilities taken over and the amount of consideration paid:

13. The Company has been incurring operating losses and one of the key customer has wrongfully not renewed the contract with the Company. The Company has also defaulted in repayments of loans and interest due to the banks and one of the bankers has filed a case against the Company with Debts Recovery Tribunal (DRT). In order to come out of the above mentioned situation the Company is taking various steps. The Company has initiated legal proceedings against the said customer for not renewing the contract and putting the Company in financial distress. The Company is in the process of negotiating with the banks for settlement. The Company is also evaluating various options to revamp its finances. The Company is trying to expand its business with its other customers to run the plant and have recently launched its own brand to cover the operating losses. Accordingly, the accompanying financial statements for the year ended March 31, 2014 have been prepared assuming that the Company will continue as a going concern.

14. Previous year figures have been regrouped/ reclassified wherever considered necessary to conform to the presentation of current year''s financial statements.


Mar 31, 2013

JHS Svendgaard Laboratories Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing a range of oral and dental products for elite national and international brands. The main portfolio of the company is to carry out manufacturing and exporting of oral care and hygiene products including toothbrushes, toothpastes, mouthwash, senitizers and job work of detergent powder.

The Company''s shares are listed for trading on the National Stock Exchange and the Bombay Stock Exchange in India.

1. Employee benefit obligations

As per Accounting Standard 15 "Employee Benefits" the disclosures relating to Employees benefits obligations defined in the Accounting Standard are given below:

(a) Defined contribution plan- Employer''s contribution to provident fund and Employees'' State Insurance Scheme recognized as expense in the Statement of Profit and Loss for the year are as under:

*Included in contribution to provident and other funds under employee benefit expenses (Refer Note 25)

(b) Defined benefit plan-

Gratuity - The present value of obligation 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 obligations.

Leave encashment- Provision for leave encashment is made by the Company on the basis of actuarial valuation using the projected unit cost method.

2. Obligation on long term, conciliable operating lease

The company has taken premises under conciliable operating leases with an option of renewal at the end of the lease term with mutual consent. There are schedule escalation clauses. Lease rental expense of Rs. 3,084,036 (March 31, 2012: Rs. 2,590,686) charged to the Statement of Profit & Loss during the year

3. Earnings per share

The calculation of Earnings per share (EPS) has been made in accordance with Accounting Standard (AS)-20 notified in Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. A statement on calculation of basic and diluted EPS is as under:

4. In accordance with Micro, Small and Medium Enterprises Development Act, 2006 which came into force with effect from October 2, 2006, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue amount beyond the specified period irrespective of the terms agreed with the suppliers. The Company has sent the written letters to all vendors. However, in absence of written response from all vendors, the liability of interest, if any, cannot be reliably estimated. Management is of opinion that there will be no liability in view of supplier profile of the Company.

5. In the opinion of the management all transactions with the related parties are made on the basis of arm length price and / or at comparatives/ benefit assessment basis. The Report of Chartered Accountant under section 92E (Transfer Pricing) of the Income Tax Act, 1961 will be submitted along with the Income Tax Return. The Company is in process of updating records for this purpose. The Company does not expect liability. Also Intercompany balances are in agreement with the balances of respective companies. The transfer pricing audit for the year ended March 31, 2012 has been completed, which did not result in any adjustment.

6. During the year JHS Svendgaard Hygiene Products Limited (Transferor Entity No-1) and Waves Hygiene Products (Transferor Entity No-2), have been amalgamated into JHS Svendgaard Laboratories Limited (Transferee), on a going concern basis with effect from appointed date i.e. March 31, 2010 pursuant to the order of Hon''ble High Court of Delhi and Hon''ble High Court Himachal Pradesh:

a) The scheme of amalgamation was sanctioned by the Hon''ble High Court of Delhi vide its order dated August 30, 2011 and the Hon''ble High Court of Himachal Pradesh at Shimla, vide its order dated May 28, 2012.

b) The order of Hon''ble High Court of Himachal Pradesh was submitted to Registrar of Companies, Chandigarh on June 25, 2012.

c) After receipt of final order of Hon''ble High Court of Himachal Pradesh approving merger the Company applied for certified copy of Delhi High Court order as it is required to be filed with Registrar of Companies, Delhi. Accordingly the said copy was obtained on August 6, 2012.

d) The order of Hon''ble High Court of Delhi was submitted to Registrar of Companies, Delhi on August 8, 2012.

e) The operations of erstwhile JHS Svendgaard Hygiene Products Limited and Waves Hygiene Products were also engaged in the similar line of business into which JHS Svendgaard Laboratories Limited is engaged i.e. manufacturing of dental, oral care & hygiene products etc.

f) Pursuant to the scheme of amalgamation, JHS Svendgaard Laboratories Limited has issued shares to the shareholders of the transferor entities in the following manner:

i. The equity shareholders of JHS Svendgaard Hygiene Products Limited have been allotted 158 fully paid up equity shares ofRs. 10 each for every 100 fully paid up equity shares of f 10 each held in Transferor Company No. 1.

ii. The partners of Waves Hygiene Products have been allotted 1,792,746 fully paid up equity shares of * 10 each in their capital contribution ratio.

g) In terms of the scheme, the assets and liabilities of the transferor entities have been accounted for at their book value as it stood in their books of accounts. Accordingly the difference of X 19,973,776 in JHS Svendgaard Hygiene Products Limited and X 44,824,437 in Waves Hygiene Products between the value of net assets acquired and the consideration as mentioned in para f above has been (debited)/ credited to the amalgamation reserve.

h) The amalgamation has been accounted for pooling of interest methods as referred to in paragraph 3(e) of ''Accounting Standard 14'' issued by The Institute of Chartered Accountants of India for an amalgamation in the nature of merger.

Pursuant to the scheme of amalgamation the following arrangements/ adjustments has been made in the books of the Company: [A] As a result of order of Hon''ble High court of Delhi & Hon''ble High court of Himachal Pradesh, the assets and liabilities and income and expenditure of transferor companies as in table 1 below stand vested in transferee company w.e.f March 31, 2010 till March 31, 2012. Since the figures could not be incorporated with the assets and liabilities of the year ended March 31, 2012 or prior years as the order of High courts were received after the finalization of financial statements of both the Companies, The assets and liabilities as at March 31, 2012 (Table 2 below) have been added with the figures of transferee company and profits of two years in transferor companies Rs. 83,824,177 have been shown as extra ordinary item in the Statement of Profit and Loss.

7. One of the customers for which the Company does processing job has decided not to renew the contract with effect from June 30, 2013. However, the management is confident that the matter will be resolved amicably and even otherwise the Company can continue with alternate business plans. Accordingly, the management do not expect any significant impact on the Company''s operation due to this event.

8. Previous year figures have been regrouped/ reclassified wherever considered necessary to conform to the presentation of current year''s financial statements.


Mar 31, 2010

1. Contingent Liabilities

a) Contingent liabilities not provided in the books of accounts: (Amount in Rs.)

Particulars As at As at 31.03.2010 31.03.2009

Guarantees given by banks 50,00,000 50,00,000

Outstanding letter of credit 24,51,102 Nil

b) Sales Tax demand amounting Rs.6,55,188/- against which the Company has preferred an appeal before Commissioner and deposited the same under protest

2. Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) Rs.57,80,461/- (P Y. Rs.11,40,02,114/-).

3. During the year the subsidiary company Jones H Smith, FZE, UAE has commenced the business.

4. In the opinion of the Board, current assets, loans and advances have a value of at least equal to the amounts shown in the balance sheet, if realized in the ordinary course of the business.

5. Balances under Sundry debtors, creditors and advances thereof are subject to confirmation/reconciliation and consequential adjustment if any.

6. Related Party

The Disclosure as required by the Accounting Standard -18 (Related Party Disclosure) are given below:-

a) Following are the names of related parties and description of relation ship, with which there are transactions during the year.

I. Key management personnel

a) Mr. Nikhil Nanda

b) Mr. G.K. Nanda

c) Mr. P.K. Manglik

II. Relatives of Key Management Personnel

a) Mrs. Sushma Nanda

III. Subsidiary Companies

a) Jones H. Smith, FZE.

b) JHS Svendgaard Dental Care Limited

Note: JHS Svendgaard Hygiene Products Limited, being Subsidiary in the Financial Year 2008-09, had ceased to be the subsidiary in the financial year 2009-10

IV. Enterprises over which key management personnel and their relatives exercise significant influence.

a) Berco Engineering Private Limited

b) Dr. Fresh, USA.

c) Number One Real Estate Pvt. Ltd.

d) JHS Svendgaard Hygiene Products Ltd.

7. Obligation on long term, non-cancelable operating leases:

Rental Expenses for operating lease for the years ended March 31, 2010 & March 31, 2009 was Rs. 34,33,034/- & Rs.67,97,626/- respectively. The Company has not executed any non cancelable operating leases.

8. Sundry Creditors in Schedule No. 12, Accounts include

Sundry Creditors in Schedule No.12; Accounts include

a) Rs. Nil/- due to creditors registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and

b) Rs. Nil/- is payable for interest during the year to Micro, Small and Medium Enterprises.

c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

9. Expenditure in foreign currency on travelling Rs.7, 31,664/- (9,07,934/-)

10. The Company had exercised an option relating to "The effects of changes in foreign exchange rates" (Notification No. G.S.R 225 (E)) during the previous financial year.

11. During the year the Company has proposed issue of 11,00,000 warrants on preferential basic for which in principle approval from the Stock Exchange is pending.

12. During the year the Company has converted 15,50,000 convertible warrants issued at a price of 46/- per warrant into Equity Shares of face value 10/- per share at a premium of 36/- per share on September 25, 2009.

13. Previous year figures have been regrouped and rearranged wherever necessary.

14. Schedule 1 to 21forms integral part of the financial statements and have been authenticated as such.

 
Subscribe now to get personal finance updates in your inbox!