Notes to Accounts of JHS Svendgaard Laboratories Ltd.
Mar 31, 2018
Background
JHS Svendgaard Laboratories Limited (âthe Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act. 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 and mouthwash. The Company''s shares are listed for trading on the National Stock Exchange and the Bombay Stock Exchange in India.
1. Basis of preparation
a) Compliance with Indian Accounting Standard
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules,2015 and Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
For all the period upto and including the financial statements for the year ended 31 March 2017 were prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the section 133 Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 (as amended) and other relevant provisions of the Act (hereinafter referred to as ''Previous GAAP'').
These financial statements for the year ended 31 March, 2018 are the first financial statements that are prepared in accordance with Ind AS. Refer to note 43 for information on how the transition from Previous GAAP to Ind AS has affected the financial position, financial performance and cash flows.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Division II Ind AS Schedule III, unless otherwise stated.
b) Basis of measurement
An entity shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.
c) Critical estimates and judgments
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the Company''s accounting policies
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates and judgments are:
i. Useful life of property, plant and Equipment
The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
The Company reviews, at the end of each reporting date, the useful life of property, plant and equipment and changes, if any, are adjusted prospectively, if appropriate.
ii. Recoverable amount of property, plant and equipment
The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.
iii. Estimation of defined benefit obligation
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate and documented. However, any changes in these assumptions may have a material impact on the resulting calculations.
iv. Estimation of deferred tax assets for carry forward losses and current tax Expenses
The Company review carrying amount of deferred tax assets and Liabilities at the end of each reporting period. The policy for the same has been explained under Note No 2(c).
v. Impairment of trade receivables
The Company review carrying amount of Trade receivable at the end of each reporting period and provide for Expected Credit Loss based on estimate.
vi. Fair value measurement
Management uses valuation techniques in measuring the fair value of financial instrument where active market codes are not available. Details of assumption used are given in the notes regarding financial assets and liabilities. In applying the valuation techniques management makes maximum use of market inputs and uses estimates and assumptions that are, as fast as possible, consistent with observable data that market participant would use in pricing the instrument where application data is not observable, management uses its best estimate about the assumption that market participant would make. These estimates may vary from actual prices that would be achieved in an arm''s length transaction at the reporting date.
Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
d) Others
Financial statements has been prepared on a going concern basis in accordance with the applicable Indian Accounting Standards prescribed in the Companies (Indian Accounting Standards) Rules, 2015 issued by the Ministry of Corporate Affairs.
e) Current versus non-current classification
The Company presents assets and liabilities in the financial statement based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
f) Foreign currency translation
i) Functional and presentation currency
Items included in the Financial Statements are measured using the currency of the primary economic environment in which the entity operates i.e. ''the functional currency''. The Financial Statements are presented in Indian rupee ( INR), which is Company''s functional and presentation currency.
ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates at the date of the transaction. Foreign exchange gains and losses from settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency at the reporting date exchange rates are recognized in the Statement of Profit and Loss. Foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other income/ expenses.
(c) In view of recurring losses and in absence of reasonable certainty, the Company had not recognized deferred tax assets on 01 April,2016.
However, during the year ended 31 March, 2017, the Company has, based on its operational parameters and future earnings, assessed and recognized deferred tax asset on unabsorbed depreciation and carried forward business losses. The management is confident about its virtual certainty that sufficient future taxable income will be available against which such asset can be realized."
* As per the terms of Business Transfer Agreement (BTA) dated March 21, 2016 with Avalon Cosmetics Private Limited to sell/ transfer one of its undertakings known as âWaves Hygiene Products" on a ''slump sale'' basis for a lump sum consideration without values being assigned to individual assets and liabilities. The agreed total consideration for sale of undertaking under slump sale was Rs. 1625 lakhs. Out of which Rs.1420 lakhs (March 31, 2017: Rs.1419 lakhs, April 01, 2016: Rs.414 lakhs) has been received and balance is receivable.
â* Pursuant to approval of shareholders by way of special resolution in accordance with section 42 & 62 of the Companies Act, 2013 and Rules made thereunder and as per SEBI (ICDR) Regulations, 2009 the Company approved preferential allotment of 34,974,748 nos. fully convertible warrants of Rs.10 each at an issue price of C11 per warrant. Out of this, the Company has converted 16,780,000 nos.,[upto 31 March, 2017: 18,164,748 nos. (upto 31 March, 2016: 13,539,748 nos.)] fully convertible share warrants into equal number of fully paid up equity shares after receiving full issue price of Rs.11/- per warrant from the respective allottees during the year ended 31 March, 2018. For remaining 30,000 warrants, application money was received at 25% of Issue price i.e. Rs.2.75 /- per warrant. However, no call money was received till final allotment date 06 July, 2017 hence, the warrants were forfeited and adjusted through Capital Reserve amounting to Rs.0.82 lakh.
Pursuant to special resolution passed in the Extraordinary General Meeting held on 10 January, 2017, the Company has approved and issued on preferential basis, 1,860,465 nos. fully paid equity shares at an issue price of Rs.43/- per share to HT Media Limited via Share Subscription Agreement dated 25 January, 2017. These shares have subsequently been listed.
Paid up equity share capital includes 1,63,60,000 equity shares alloted pursuant to conversion of share warrants. These shares are under process for listing.
d. Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.10/- per share referred to herein as equity share. Each holder of equity shares is entitled to one vote per share held.
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 31 March, 2018 and 31 March, 2017, no dividend has been declared by the Company.
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.
Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:
65,45,245 equity shares issued to the shareholders of merged entities pursuant to the scheme of amalgamation in the financial year 2012-13.
B. Nature and purpose of reserve Capital reserve
Out of total preferntial allotment of 34,974,748 warrants, till the year ending 31 March, 2018, 34,944,748 warrants were successfully allloted. For remaining 30,000 warrants, application money was received at 25% of Issue price i.e. Rs.2.75 /- per warrant. However, no call money was received till final allotment date 06 July, 2017 hence, the warrants were forfeited and adjusted through Capital Reserve amounting to Rs.0.82 lakhs.
b. Security premium account
Securities premium account is used to record the premium on issue of shares. The reserve is utilise in accordance with the provisions of the Companies Act, 2013.
c. General reserve
This represents appropriation of profit by the Company and is available for distribution of dividend.
* Respective assets are hypothecated against the loans taken to acquire such vehicles. Loan is repayable within a period of 60 months at interest rate in the range of 8% p.a. to 12% p.a.
**It represents deferred payment for acquisition of machine. Payment is to be made in 36 equal installments of Rs.3.13 lakh each starting from 15 April, 2015. This has been carried at amortised cost.
***Repayable in 2 equal yearly installment commencing from 31st December, 2016 @ interest rate of 15% p.a.
The Company has recognized net income amounting to Rs.2727.21 lakhs during the year ended 31 March, 2018 on account of compensation received pursuant to the Settlement Agreement dated 28 March, 2017. The Arbitral Tribunal has given its Final Award on 3 April, 2017 and two SLP''s from the Supreme Court were withdrawn on 06 April, 2017 & 12 April, 2017.
2. Contingent Liability
I. Claims/litigations made against the Company not acknowledged as debts:
Matters under litigation:
Claims against the Company by employees, vendors & customers amounting to Rs.149.39 lakh (Previous Year Rs.77.60 lakh). The management of the Company believes that the ultimate outcome of these proceedings will not have a material/adverse effect on the Company''s financial condition and results of operations.
II. Others:
Bank Guarantee issued by Bank amounting to Rs.71.11 lakh (Previous Year Rs.71.11 lakh).
3. Government Grant
During the financial year ended 31 March, 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 apportioned to Statement of Profit & Loss over the useful life of the assets which is estimated as 10 years. During the year the Company has recognised Rs.3 lakh (previous year Rs.3 lakh) as government grant based on useful life of the assets.
4. Segment Reporting
The Company is engaged in manufacturing a range of oral and dental products for elite national and international brands. Information reported to and evaluated regularly by the Chief Operational Decision Maker (CODM) for the purpose of resource allocation and assessing performance focuses on business as a whole. The CODM reviews the Company''s performance on the analysis profit before tax at overall level. Accordingly, There is no other separate reportable segmental as defined by IND AS 108 âSegment Reporting".
Information about major customers
Revenue of Rs.9316.49 lakh, (Previous year Rs.8272.17 lakh) arising from two customers in India and Rs.2224.61 lakh (Previous year Rs.397.05 lakh) from one customer outside India contribute more than 10% of the Company''s revenue individually. No other customer contribute 10% or more than 10% to the Company''s revenue for the current year ended 31 March, 2018 and previous year ended 31 March, 2017. The Company does not hold any non current assets outside India.
5. Employee benefit obligations
The Company has classified various employee benefits as under:
a) Defined contribution plans
i.) Employees Provident fund
ii.) Employee State Insurance Scheme
The Company has recognised the following amounts in the Statement of Profit and Loss for the year: (Refer Note- 31)
b Defined benefit plans
i.) Gratuity
c Other long-term employee benefits
ii.) Leave encashment
Gratuity is payable to eligible employees as per the Company''s policy and The Payment of Gratuity Act, 1972. 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.
Provision for leave benefits is made by the Company on the basis of actuarial valuation using the Projected Unit Credit (PUC) method.
Liability with respect to the gratuity and leave encashment is determined based on an actuarial valuation done by an independent actuary at the year end and is charged to Statement of Profit and Loss.
Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized immediately in the Other Comprehensive Income as income or expense.
The discount rate has been assumed at 7.70% p.a. (Previous year 7.30% p.a.) based upon the market yields available on Government bonds at the accounting date for remaining life of employees. The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market on long term basis.
Description of Risk Exposures :
Risks associated with the plan provisions are actuarial risks. These risks are: - (i) investment risk, (ii) interest risk (discount rate risk), (iii) mortality risk and (iv) salary risk.
i) Investment Risk- The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to Government Bonds Yield. If plan liability is funded and return on plan assets is below this rate, it will create a plan deficit.
ii) Interest Risk (discount rate risk) - A decrease in the bond interest rate (discount rate) will increase the plan liability.
iii) Mortality Risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants. For this report we have used Indian Assured Lives Mortality (2006-08) ultimate table. A change in mortality rate will have a bearing on the plan''s liability.
iv) Salary Risk - The present value of the defined benefit plan liability is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
(g) Terms and Conditions
Outstanding balances at the year end are unsecured, interest free and recoverable/repayable on demand. There has been no guarantee provided or received for any related party receivable and payable, other than disclosed. For the year end 31 March, 2018 the company has provided for impairment of receivables owed by the related party Rs. Nil in 31 March, 2018 and 31 March, 2017 Rs.0.73 lakh ). This assessment undertaken each financial year through examining the financial position of related party and market in which related party operates.
a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.
b) Fair value of non-current financial assets and liabilities has not been disclosed as there is no significant differences between carrying value and fair value
- Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
- Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
- Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The fair value of financial assets and liabilities included in Level 3 is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes of similar instruments.
6. FINANCIAL RISK MANAGEMENT
Risk management objectives and policies
The Company is exposed to various risks in relation to financial instruments. The Company''s financial assets and liabilities by category are summarised in Note 43. The main types of risks are market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by its board of directors, and focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets. The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed to, are described below:
Market risk
Market risk is the risk that changes in market prices will have an effect on Company''s income or value of the financial assets and liabilities. The Company is exposed to various types of market risks which result from its operating and investing activities. The most significant financial risks to which the Company is exposed are described below:
Foreign currency risk
The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to USD and EURO. Foreign exchange risk arises from future commercial transactions and recognise assets and liabilities denominated in a currency that is not company''s functional currency(INR). The Risk is measured through a forecast of highly probable foreign currency cashflows.
To mitigate the Company''s exposure to foreign exchange risk, cash flows in foreign currencies are monitored and net cash flows are managed in accordance with Company''s risk management policies. Generally, the Company''s risk management procedures distinguish short term foreign currency cash flows (due within 6 months) from longer term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no hedging activity is undertaken.
These percentages have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis given in the table below is based on the Company''s foreign currency financial instruments held at each reporting date.
Sensitivity analysis for entities with foreign currency balances in INR
The following tables illustrate the sensitivity of profit/loss and equity in regards to the Company''s financial assets and financial liabilities and the movement of exchange rates of respective functional currencies'' against INR, assuming ''all other things being constant''.
If the respective functional currencies had strengthened/weakened against the INR by the afore mentioned percentage of market volatility, then this would have had the following impact on profit/loss:
(b) Price risk
The Company is mainly exposed to the price risk due to investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. In order to minimise pricing risk arising from investment in mutual funds, Company invest in highly rated mutual funds.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk because funds are borrowed at fixed interest rates. The borrowings of the Company are principally denominated in rupees and fixed rates of interest.
1 CREDIT RISK
Credit risk arises from cash and cash equivalent, investments in mutual funds, deposits with the banks, as well as credit exposure to customers including outstanding receivables.
Credit risk management
For Bank and Financial Institutions, only high rated banks/ institutions are accepted
For other counter parties, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Company''s policy is to deal only with creditworthy counterparties only.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.
The company based on internal assessment which is driven by the historical experience/current facts available in relation to default and delays in collection thereof, the credit risk for trade receivable is considered low. The Company estimates its allowance for trade receivable using life time expected credit loss. The balance past due for more than 6 months( net of expected credit loss allowance), excluding receivable from group companies is Rs.580 lakh (31 March, 2017 Rs.226.10 lakh; 01 April, 2016 Rs.123.30 lakh).
The credit risk for cash and cash equivalents and other financial instruments is considered negligible and no impairment has been recorded by the Company.
Significant estimates and judgments Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
2 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
The Company''s is responsible for managing the short term and long term liquidity requirements. Short term liquidity situation is reviewed daily. Longer term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.
7 Capital Management A Risk Management
For the purposes of Company capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March, 2018, 31 March, 2017 and 01 April, 2016.
B Dividends
The Company has not proposed any dividend for the year (31 March,2017: Rs. Nil 01 April, 2016: Rs. Nil).
8. Leases 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.39.24 lakh (31 March, 2017: Rs.22.93 lakh) charged to the Statement of Profit and Loss during the year.
9. Suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006
The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED), promulgated by Government of India came into force with effect from 2 October 2006. As per the Act, the Company is required to identify the Micro and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The Company has not received information from any suppliers regarding their status under MSMED and hence disclosures relating to amount unpaid as at the year end together with interest paid/payable under this Act have not been given.
10 During the year under review, Section 135 of Companies Act 2013 read with (Companies Corporate Social Responsibility )Rules, 2014 has become applicable on the company and in compliance with the provisions of the aforesaid Section read with the said Rules , the company has duly constituted a CSR committee and framed the CSR policy. However, the company has not spend any amount due to the accumulated lossess in preceeding years.
11 Consequent to the introduction of Goods and Services Tax (GST) with effect from 01 July, 2017,the indirect taxes like Central Excise, VAT etc. have been replaced by GST. In accordance with Indian Accounting Standard 18 on Revenue and Schedule III of Companies Act, 2013, GST is not to be included in Gross Revenue from sale of products. In view of aforesaid restructuring of indirect taxes, Gross Revenue from sale of products and Excise duty for quarter and year ended 31 March, 2018 are not comparable with previous periods. Following additional information is being provided to facilitate such comparison.
12 First-time adoption of Ind AS
These are the first financial statements prepared in accordance with Ind AS by the Company.
The accounting policies set out in Note 2 have been applied in preparing financial statements for the year ended 31 March, 2018, the comparative information presented in these financial statements for the year ended 31 March, 2017 and in preparation of an opening Ind AS balance sheet at 1 April, 2016 (the transition date). In preparing its opening Ind AS balance sheet , the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006(as amended) and other relevant provisions of the Act (previous GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in following tables and notes.
A. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A.1 Ind AS optional exemptions A1.1 Deemed cost
Para D7AA of appendix C to Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment and Intangible Assets as recognised in the financial statements as the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments as per Ind AS 101.
The Company has elected to measure all of its Property, Plant and Equipment and Intangible Assets at their previous GAAP carrying value.
A.1.2 Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.
The Company has elected to apply this exemption for such contracts/arrangements.
A1.3 Investment in subsidiaries
As per Ind AS 101 , If a first-time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure that investment at one of the following amounts in its separate opening Ind AS Balance Sheet:
(a) cost determined in accordance with Ind AS 27; or
(b) deemed cost. The deemed cost of such an investment shall be its:
(i) fair value at the entity''s date of transition to Ind ASs in its separate financial statements; or
(ii) previous GAAP carrying amount at that date
The Company has availed the exemption and has measured these investments in subsidiaries at deemed cost being the previous GAAP carrying amount at the transition date.
A.2 Ind AS mandatory exceptions A.2.1 Estimates
An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimate were in error.
Ind AS estimates as at 1st April 2016 are consistent with the estimates as at the same date made in confirmity with previous GAAP.
Further, the Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at FVTPL or FVOCI; and
- Investment in debt instruments carried at amortised cost
A.2.2 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
A.2.3 De-recognition of financial assets and liabilities
As per Ind AS 101, an entity should apply de-recognition requirement of Ind AS 109, â Financial Instruments", prospectively for transactions occurring on or after the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS:
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods
The following tables represent the reconciliations from previous GAAP to Ind AS.
Notes to reconciliation on first time adoption
Note 1. The Company has elected to take the exemption of para D7AA, Appendix C of Ind-AS 101 for all items of Property, Plant and Equipment, and Intangible Assets as at the date of transition to Ind AS. Hence, as at the date of transition to Ind AS there is no change in the carrying values under previous GAAP .
Note 2 Under pevious GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled previous GAAP profit to total comprehensive income as per Ind AS.
Note 3 Under previous GAAP, non-current liabilities are recognised on undiscounted basis. Ind AS requires such liabilities to be recognised initially at fair value and then to be carried at amortised cost. The discounted value of the liabilty is increased over the period of term by recognising the notional interest expense under ''finance cost'' .
Note 4 Under previous GAAP, the Company recognises settlement liabilty on undiscounted basis. Under Ind AS, financial liabilty is to be recognised at fair value and carried at amortised cost. D1Accordingly the difference between settlement amount and its fair value is adjusted through the asset recognised and subsequently, Notional Interest charged to Statement of Profit & Loss as finance cost over the term. The impact on depreciation is also considered.
Note 5 : Under previous GAAP, the interest free security deposits for leases are accounted at an undiscounted value. Under Ind AS, the security deposits for leases have been recognised at discounted value and the difference between undiscounted and discounted value has been recognised as ''Deferred lease rent'' which has to be amortised over respective lease term as rent expense under ''other expenses''. The discounted value of the security deposits is increased over the period of lease term by recognising the notional interest income under ''other income''.
Note 6 The changes in the deferred tax assets are on account of adjustments made on transition to Ind AS.
Note 7 Investment in mutual funds have been fair valued in accordance with Ind AS 109.Under previous GAAP these investments were carried at cost net of diminution in their value as at the Balance Sheet date. Accordingly,fair value changes are recognised in the statement of profit and loss for the year ended on 31 March, 2017.
Note 8 Under previous GAAP, the Company has recognised share issue expenses in profit and loss. Ind AS requires the transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. (Rs.in lakhs)
Note 9 Under the previous GAAP the net effect of periodical cost reconciliation with customer were grouped under other expenses/income, however, under Ind AS 18 âRevenue, these expenses are netted off against sale of goods.
Note 10 : Both under previous GAAP and Ind AS, the Company recognised costs related to its postemployment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS 19, Actuarial gains and losses pertaining to defined benefit obligations and re-measurement pertaining to return on plan assets are recognised in Other Comprehensive Income and are not reclassified to profit or loss. Thus the employee benefit cost is reduced by Rs.540,858 and Remeasurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.
Note 11 : Under previous GAAP, written down of inventories to net relisable value as well as the reversal of such write down disclosed as expense or income respectively. Ind AS 2 âInventories", the amount of any reversal of any write-down of inventories, shall be recognised as a reduction in the amount of inventories recognised as an expense in the period in which reversal occurs.
Under previous GAAP, discount received from supplier is disclosed as Other Income. Ind AS requires that all rebates and discounts, including prompt settlement discount, should be deducted from the cost of inventories.
Note 13: The Company had taken a loan from Banks which had been waived off during the year 2015. The Company had shown the effect of waiver of loan in Capital Reserve. Under Ind AS, the same as has been reclassified under Retained earnings as an reclassification entry amounting to Rs.3082.89 lakh.
Note 14 : Under the previous GAAP, all the Bank Balances were part of Cash & Cash Equivalents. However, as per Ind AS, only short term Bank Deposit with original maturity of less than three months shall be part of Cash & Cash Equivalent. Accordingly Bank deposits amounting to Rs.37.53 lakh (previous year Rs.34.95 lakh ) which were classified as Cash & Cash Equivalents in previous GAAP are classified as âFinancial Assets - Current - Bank Balances Other than Cash & Cash Equivalents" in Ind AS. The changes in Bank deposits which are not classified as Cash & Cash Equivalents of Rs.15.70 lakh forms the part of Operating Activities in Cash Flow Statement.
Mar 31, 2016
* Pursuant to approval of shareholders by way of special resolution in accordance with section 42 & 62 of the Companies Act, 2013 and Rules made there under and as per SEBI (ICDR) Regulations, 2009 the Company approved preferential allotment of 34,974,748 fully convertible warrants of Rs.10 each at an issue price of Rs.11 per warrant. During the year, the Company has converted 32,80,000 on January 05, 2016 and 10,259,748 on March 03, 2016 fully convertible share warrants (out of total 34,974,748 share warrants) into the equal number of fully paid up equity shares after receiving full issue price at the rate of Rs.11 per warrant from the respective allottees. The shares allotted by the Company on March 03, 2016 were listed on April 18, 2016.
b) Terms / rights attached to equity shares
Voting : Each holder of equity shares 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, 2016 and March 31, 2015, 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.
c) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:
65,45,245 equity shares issued to the shareholders of merged entities pursuant to the scheme of amalgamation in the financial year 2012-13
(i) The Company was unable to publish its quarterly financial results within the time as specified under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 of the listing agreement due to some unforeseen reasons beyond the control of the Company. The Company has paid /provided penalty amounting to Rs.1,790,000 (previous year Rs.4,651,900) levied by the Stock Exchanges (i.e. BSE & NSE) for non compliance of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 .
(ii) During the year the Management has carried out a detailed exercise to identify fixed assets which were not in active use and were lying idle. As a result, fixed assets having gross value and written down value of Rs.119,615,649 and Rs.43,356,573 respectively were identified as on March 31, 2016. Consequently these assets have been classified under the head ''Other Current Assets'' as assets held for sale/disposal at a estimated realizable value of Rs.439,000. Therefore, loss of Rs.42,917,573 has been charged to the statement of profit and loss shown as exceptional item.
(iii) The Company has entered into a Business Transfer Agreement (BTA) on March 21, 2016 with Avalon Cosmetics Private Limited to sell/transfer one of its undertakings known as "Waves Hygiene Products" on a ''slump sale'' basis for a lump sum consideration without values being assigned to individual assets and liabilities. The agreed total consideration for sale of undertaking under slump sale was Rs.162,500,000 against the net assets value of Rs.297,232,059 as on 21st March 2016. Consequently, loss of Rs.134,732,059 has been charged to the statement of profit and loss shown as an extraordinary item.
1. Contingent liabilities
I. Claims/litigations made against the Company not acknowledged as debts:
a. Sales tax demand Nil (Previous Year Nil).
b. Winding up petition filed against the Company Nil (Previous Year Nil).
c. Matters under litigation:
(i) Claims against the Company by employees, vendors & customers amounting to Rs.3,72,38,145 (Previous Year Rs.3,05,78,000).
(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 (Previous Year 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 (Previous Year Rs.2,06,14,52,365).
The management of the Company believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial condition and results of operations.
II. Others:
Bank Guarantee issued by Bank amounting to Rs.69,10,605 (Previous Year Rs.69,10,605)
2. 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:
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)
3. Employee benefit obligations (contd.)
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.
Note:
The discount rate has been assumed at 7.9% (March 31, 2015: 7.80%) which is determined by reference to market yield at the Balance Sheet date on Government Securities. The estimate for rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
V. Employer''s best estimate of contribution towards gratuity during the next year is Rs.14,29,332 (March 31, 2015: Rs.15,71,745 )
Employer''s best estimate of contribution towards leave benefits during the next year is Rs.3,22,681 (March 31, 2015: Rs.3,27,161)
* Net Segment Assets = Segment Assets- Segment liabilities
# The segmental information for reportable segments ''Full service goods based-Oral Care " is currently not realistically ascertainable as the manufacturing process for this segment and that for full service goods based contract manufacturing is similar. The Company is in the process of making necessary changes in the accounting software to derive relevant details related to this new reportable segment.
4. Balances shown under trade receivables, group companies, loans & advances, trade payables and other liabilities are subject to confirmation / reconciliation and respective consequential adjustments.
5. 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 C19,30,96,119/- during the year ended on March 31,2016. Further, there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized , as the 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, 2016. Consequently, the net deferred tax assets/liability as at March 31, 2016 is Nil. Deferred tax assets and liabilities are attributable to the following:
*Potential equity shares (money received against share warrants) are anti-dilutive hence not been considered for calculation of diluted EPS.
6. 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.21,16,172 (March 31, 2015: Rs.28,91,581) charged to the Statement of Profit and Loss during the year.
7. The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED), promulgated by Government of India came into force with effect from 2 October 2006. As per the Act, the Company is required to identify the Micro and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The Company has not received information from any suppliers regarding their status under MSMED and hence disclosures relating to amount unpaid as at the year end together with interest paid/payable under this Act have not been given.
8. Details of derivative instruments and un hedged foreign currency exposures as at March 31, 2016 are as under:
(a) There are no derivative instruments during the year and as at March 31, 2016 and March 31, 2015.
(b) Particulars of unhedged foreign currency exposure as on March 31, 2016:
* There is a provision of Rs.2,33,32,927/- ( March 31, 2015: Rs.2,32,19,482/- ) against these receivable balances.
9. Information pursuant to Regulations 34(3) & 53(f) of the Listing Obligations and Disclosure Requirements with Stock Exchanges
A. Interest free loan and advances to subsidiaries, in the nature of loan with no specifies repayment schedule: #Provision for diminution in value of investment has been made in books of accounts for the entire investment.
Figures in brackets represents previous year figure.
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. Previous year figures have been regrouped/ reclassified wherever considered necessary to confirm to the presentation of current year''s financial statements.
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, 2012
1. BACKGROUND
JHS Svendgaard Laboratories Limited is a public company domiciled in
India and incorporated under the provisions of the Companies Act, 1956.
Its shares are listed on two stock exchanges in India. 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, exporting, importing and trading of oral
care and hygiene products including toothbrushes, toothpastes,
mouthwash, denture tablets, sanitizers etc.
2. SHARE CAPITAL
a) Terms/rights attached to equity shares
Voting
Each holder of equity shares 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 approval of the
shareholders in ensuing Annual General Meeting, except in the case
where interim dividend is distributed. During the year ended March 31,
2012 the amount of per share dividend recognised as distributions to
equity shareholders is Rs. Nil (March 31, 2011: Rs. 0.75 /-)
Liquidation
In the event of liquidation of the Company, the holders of equity
shares shall be entitled to receive all of the remaining assets of the
Company, after distribution of all preferential amounts, if any. Such
distribution amounts will be in proportion to the number of equity
shares held by the shareholders.
c) No shares have been allotted as fully paid up pursuant to any
contract(s) without payment being received in cash, allotted as fully
paid up by way of bonus shares or bought back.
3. DEFERRED TAX LIABILITIES/(ASSETS) (NET)
In accordance with Accounting Standard 22 on 'Accounting for Taxes on
Income' the deferred tax liabilities of Rs. 25,901,630* has been
recognised as charge in the statement of profit and loss. The effect of
significant timing differences as at March 31, 2012 that reverse in one
or more subsequent years give rise to the following net deferred tax
liability as at 31 March, 2012.
4. CONTINGENT LIABILITIES AND COMMITMENTS
A. CONTINGENT LIABILITY (Amount in Rs.)
Particulars March 31, 2012 March 31, 2011
(i) Claim made against the
company not acknowledged as debts
- Sales tax demands (paid under
protest Rs. 582,335) for non 946,021 946,021
submission of statutory forms.*
- Case filed by fixed assets
vendor for moulds and legal charges. 1,461,000 1,461,000
(ii) Others:
(a) Bank guarantee issued by bank
(margin money kept by way of 5,327,594 145,417
fixed deposit Rs. 827,594
(March 31, 2011: Rs. 15,000)
(b) Corporate guarantees given by
the company to banks on
behalf of others. ** 134,314,729 436,000,000
(c) Outstanding letter of credit
(margin money kept by way of NIL 17,877,557
fixed deposit Rs. NIL (March 31,
2011: Rs. 3,559,410)
* The company has preferred an appeal before Commissioner of Sales tax
and deposited the same under protest.
** The company has provided a corporate guarantee in favour of ICICI
Bank Limited for credit facilities sanctioned by the bank to the
following entities:
- Wave Hygiene Products (Partnership Firm) : Rs.Nil
- JHS Svendgaard Hygiene Products Limited : Rs.134,314,729
(Refer note 34)
The Board of Directors has approved the Scheme of Amalgamation of the
above two entities with the company on July 7, 2010. The said scheme
was approved by Honourable Delhi High Court on August 30, 2011. The
Honourable High Court of Shimla on March 26, 2012 has reserved the
final order of merger which will be pronounced as stated by Honourable
High Court of Shimla. Since the order of Shimla High Court is still
pending, these financial statements are prepared without giving effect
to this amalgamation.
Note: Based on the past experience, interpretations of the provisions
of Income tax and provisions of Service tax, the company is of the view
that the above demands are likely to be deleted or substantially
reduced and accordingly no provision has been considered in books of
account.
5. EMPLOYEE BENEFIT OBLIGATIONS
As per Accounting Standard 15 "Employee Benefits" the disclosures of
Employees benefits as 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 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.
6. SEGMENT REPORTING (AS PER AS Ã 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 is given in these financial statements.
7. 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.
8. 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, 2011 has been completed, which did not result in
any adjustment.
9. The financial statements for the year ended March 31, 2011 had been
prepared as per the applicable, pre-revised Schedule VI to the
Companies Act, 1956 ('the Act'). During the year, the revised Schedule
VI notified under the Act has become applicable to the Company.
Accordingly, the Company has reclassified previous year figures to
conform to the current year's classification. The adoption of revised
Schedule VI does not impact recognition and measurement principle
followed for preparation of financial statements. However, it has a
significant impact on presentation and disclosures made in the
financial statements.
Mar 31, 2011
1. Contingent Liabilities and commitments (Amounts in Rs.)
Particulars As at As at
March 31, 2011 March 31, 2010
(i) Claim made against the Company
not acknowledged as debts
- Sales Tax Demands for non
submission of statutory forms.* 946,021 655,188
- Case filed by Fixed Assets Vendor
for moulds and legal charges 1,461,000 Ã
(ii) Estimate amount of contracts
remaining to be executed on capital
account and not provided for (net of
Capital Advances) 6,569,875 5,780,461
(iii) Others:
(a) Bank Guarantee issued by Bank
(margin money kept by way of fixed
deposit Rs.15,000 (previous year Rs.
500,000)) 145,417 5,000,000
(b) Corporate guarantees given by the
Company to Banks on
behalf of others.** 436,000,000 Ã
(c) Outstanding letter of credit
(margin money kept by way of
fixed deposit Rs.3,559,410
(previous year Rs.250,000)) 17,877,557 2,451,102
* The Company has preferred an appeal before Commissioner and deposited
the same under protest. ** The Company has provided a corporate
guarantee in favor of ICICI Bank Limited for credit facilities
sanctioned by the bank to the following entities:
- Wave Hygiene Products (Partnership Firm) : Rs.250,000,000
- JHS Svendgaard Hygiene Products Limited : Rs.186,000,000
The Board of Directors has approved the Scheme of Amalgamation of the
above two entities with the Company on July 7, 2010. The said scheme
was pending for approval in the Delhi High Court and Shimla High Court
as on March 31, 2011. Subsequently, it has been approved by Delhi High
Court on August 30, 2011 and approval of Shimla High Court was pending.
These financial statements are prepared without giving effect to this
amalgamation.
Note: Based on the past experience, interpretations of the provisions
of Income Tax and Provisions of Service Tax, the Company is of the view
that the above demands are likely to be deleted or substantially
reduced and accordingly no provision has been made.
2. The balances of the accounts comprised in sundry debtors, creditors
and advances are subject to confirmations/ reconciliation and
consequential adjustments.
3. In the opinion of the Board, the current assets, loans and advances
appearing in the Company's Balance Sheet as at year end would have
realisable value at least equal to the respective amounts at which they
are stated in the balance sheet.
4. The provision for all liabilities is adequate and not in excess of
the amounts considered reasonably necessary.
5. Prior Period Items:
6. Employee Benefit Obligations
As per Accounting Standard 15 "Employee Benefits" the disclosures of
Employees benefits as defined in the Accounting Standard are given
below:
b) Defined Benefit Plan
Gratuity - The present value 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 obligations. The summarised positions of various defined
benefits are as under:
* Assuming all Actuarial (gain)/Loss comprises of experience
adjustments only.
The estimate for rate of escalation in salary considered in actuarial
valuation, takes into account inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The above information is certified by the actuary.
7. Segment Reporting (as per AS Ã 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 is given in these financial statements.
8. Related Party
The Disclosures as required by the Accounting Standard -18 (Related
Party Disclosure) are as under:
* Mr. Puneet Kumar Manglik had ceased to be the Executive Director of
the Company from October 31, 2009
** JHS Svendgaard Hygiene Products Limited had ceased to be the
subsidiary in the financial year 2009-10 and has become an enterprise
over which Key Managerial Personnel and their relatives are able to
exercise significant influence.
9. Obligation on long term, cancelable operating leases:
The Company has entered into various cancelable operating leases.
Rental Expenses paid during the year ended is Rs.2,798,026 (previous
year: Rs.3,433,034).
10. 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: (Amounts in Rs.)
11. In accordance with Accounting Standard 22 on 'Accounting for Taxes
on Income', the net increase in deferred tax asset of Rs.812,751 for
the current year has been recognised in the profit & loss account.
The tax effect of significant timing differences as at March 31, 2011
that reverse in one or more subsequent years gave rise to the following
net deferred tax assets as at March 31, 2011. (Amounts in Rs.)
The different components of salary cannot be identified as in Salary,
allowance, contribution to provident fund etc. The above remuneration
does not include expense towards retirement since the same is based on
actuarial valuations carried out for the Company as a whole.
12. 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 of the vendors. However, in absence of
written response from all of 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.
13. 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 years. However, during the current year the same
has been released from the General Reserves and credited to the Profit
and Loss Account.
* figures in bracket pertain to previous year
14. During the year 2009-10, the Company had proposed issue of
1,100,000 warrants on preferential basis out of which the approval from
the National Stock Exchange and the Bombay Stock Exchange has been
received for 1,00,000 warrants.
15. During the year the Company has converted 100,000 (previous year
1,550,000) convertible warrants issued on preferential basis at a price
of Rs.30 (previous year Rs.46) per warrant into Equity Shares of face
value
of Rs.10 per share (previous year Rs.10 per share) at a premium of
Rs.20 per
share (previous year Rs.36 per share) on August 9, 2010.
16. The Board of Directors recommended a final dividend of Rs.0.75 per
equity share for financial year 2010-11. The amount of such recommended
dividend is subject to the approval of the shareholders in the ensuing
Annual General Meeting of the Company.
17. 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. Company is in
process of updating records for this purpose. Company does not expect
liability. Also inter company balances are in agreement with the
balances of the respective companies. The transfer pricing audit for
the year ended March 31, 2010 has been completed, which did not result
in any adjustment.
18. The Company had issued 100,000 Equity Shares on August 9, 2010.
This issue was after the date of signing of Balance Sheet but before
the record date (i.e. December 24, 2010) for dividend declaration. The
dividend pertains to these shares amounts to Rs.50,000 and Rs.8,250 as
corporate dividend tax on the same was paid to the allottees. This is
appearing as Proposed Dividend (previous year) in the Profit and Loss
Account as on March 31, 2011.
19. Previous year figures have been regrouped / rearranged /
reclassified to conform to current year classifications.
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.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on JHS Svendgaard Laboratories Ltd.
-
JHS Svendgaard Laboratories Ltd. Tools
- Bulk Deals
- Block Deals
-
JHS Svendgaard Laboratories Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
JHS Svendgaard Laboratories Ltd. Key Financial Ratios
- Ratios
-
JHS Svendgaard Laboratories Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
JHS Svendgaard Laboratories Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
JHS Svendgaard Laboratories Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
JHS Svendgaard Laboratories Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
