Mar 31, 2015
1a. GENERAL INFORMATION
Kaya Limited (''Kaya'' or the ''Company''), headquartered in Mumbai, India, carries on skin care business through Kaya Skin Clinics. The clinics offer skin care solutions using scientific dermatological procedures and products. (Refer note 1B below)
1b. SCHEME OF ARRANGEMENT:
a. On September 29, 2014 the Board of Directors of Marico Kaya Enterprises Limited (''MaKE''), the holding company and the company, have approved the Scheme of Arrangement (''the Scheme'') for Amalgamation of MaKE with the Company with effect from appointed date April 1, 2014. The Hon''ble High Court of Bombay has approved the Scheme vide its order dated April 18, 2015, and thereafter fled with Registrar of Companies on May 13, 2015.
b. In terms of the Scheme, all assets, liabilities and reserves of MaKE have been vested with the Company with effect from April 1, 2014 and have been recorded at their respective book values in accordance with the Scheme, under the pooling of interest method as per AS 14 Â Accounting for Amalgamation.
c. All the inter-company balances between the Company and MaKE as at April 1, 2014 stand cancelled.
d. The Company will issue 12,897,100 equity shares of Rs. 10/- each, fully paid-up, of the Company to the holders of Equity shares of Marico Kaya Enterprises Limited whose names will be registered in the register of members on the record date, without payment being received in cash, in the ratio of 1 (one) fully paid-up equity shares of Rs. 10/- each of the Company for every 1 (one) fully paid-up equity shares of Rs. 1 held in Marico Kaya Enterprises Limited. Pending issue of such shares as at March 31, 2015, the face value of shares to be issued has been accounted under Share Capital Suspense Account (Refer notes 3(a) & 3(b))
e. Further, in terms of the Scheme, the existing share capital of the Company of Rs. 178,489,750 was reduced upon the Scheme becoming effective i.e. on May 13, 2015, with corresponding adjustment with securities premium.
2 (a) CONTINGENT LIABILITIES
Claims against the Company not acknowledged as debts
Â Income tax matters 1,467,397,145 128,531,797
Â Sales tax matters 53,034,531 28,563,023
Â Service tax matters 22,138,889 172,919,306
- Other matters 3,820,000 3,750,000
Total 1,546,390,565 333,764,126
In respect of above, future cash outflows is determinable only on receipt of judgments pending at various forums / authorities.
2 (b)The Company has been sanctioned cash credit and letter of credit facilities of Rs. 150,000,000 (Rs. 80,000,000) by a bank. This facility is secured by first and exclusive charge on all existing and future receivable and current assets and second pari passu charge on moveable fixed assets of the Company. Amount outstanding towards these facilities on account of letter of credit as at year end is Rs. 1,257,692 (Previous year Rs. 1,898,903).
3. CAPITAL AND OTHER COMMITMENTS
(a) Capital Commitments
Estimated value of contracts in capital account remaining 8,425,292 1,249,188 to be executed (net of capital advances)
(b) Other Commitments
Lease termination cost Â representing lock-in-period rental 109,384,484 145,106,817
under rental agreements
d) Leave Encashment:
The Company permits encashment of privileged leave (except sick leave) accumulated by its employees on retirement, separation and during the course of service. The liability for unexpired leave is determined and provided on the basis of actuarial valuation at the Balance Sheet date. The privileged leave liability is not funded.
4. SEGMENT REPORTING:
In accordance with Accounting Standard 17 Â "Segment Reporting", the Company has determined its business segment as ''Skin Care''. Since, 100% of the Company''s business is from providing specialized skin care services and other related products, there are no other primary reportable segments. Thus, the segment revenue, segment results, total carrying amount of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segment assets, total amount of charge for depreciation during the year is refected in the Financials Statements.
The Company''s operations are such that all activities are confned only to India and hence, there is no secondary reportable segment relating to the Company''s business.
5. OPERATING LEASES:
The Company has entered into several operating lease arrangements for its office premises and skin clinics for a period ranging from 3 to 9 years and, is renewable on a periodic basis at the option of the lessor and / or lessee. Under these arrangements, generally refundable interest free deposits have been given.
6. In view of significant unabsorbed depreciation and carry forward losses under tax laws, resulting in absence of virtual certainty, the Company has not recognised any deferred tax assets. The Company does not have any Deferred Tax Liabilities.
7. Research and Development expenses aggregating Rs. 3,124,090 (Previous year Rs. 2,699,358) have been included under the relevant heads in the Statement of Profit and Loss.
8. Previous year figures have been re-grouped and reclassified wherever necessary to conform to this year''s classification.