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Notes to Accounts of Krebs Biochemicals & Industries Ltd.

Mar 31, 2015

1 Corporate information

Krebs Biochemicals & Industries Ltd has been incorporated on 2nd December 1991. At present the company is engaged in the business of manufacture of active pharmaceutical ingredients. The company has two manufacturing facilities one at Regadichelaka, Nellore (Dist) and another one at Kothapalli Village, Kasimkota Mandal, Vishakapatnam (Dist).

2 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous years.

NOTE- 3

In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

NOTE- 4

Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. As per the records with the company, none of the enterprises have been identified as Micro, Small and Medium Enterprises.

NOTE- 5

During the year, the company has made one time settlement with M/s Pinky Ventures Pvt Ltd and has paid an amount of Rs.34.80 crores as full and final settlement and got a principal waiver of Rs 31.92 crores. The principal waiver was credited to Statement of Profit and Loss.

NOTE- 6

Interest Free Sales Tax :

(i) During the year the company has availed interest free sales tax Loan of Rs. NIL for its pharma division unit at Kothapalli. The interest free sales tax loan availed by the unit so far stood at Rs. 451.76 lakhs (previous Year Rs. 451.76 lakhs).

(ii) During the year the company has paid interest free sales tax Loan of Rs. Nil for its pharma division unit at Regadichelika. The interest free sales tax loan outstanding is Rs. 59.80 lakhs (previous Year Rs. 59.80 lakhs).

NOTE- 7

Contingent Liabilities :

The following contingent liabilities are not provided for.

(i) Sales Tax: There are various demands raised by the sales tax authorities amounting to Rs.212.46 lakhs (Previous year Rs. 220.30 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL).

(ii) Excise Duty: There are various demands raised by the Excise authorities amounting to Rs.115.28 lakhs (Previous Year Rs.3.34 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs 20.00 lacs (Previous Year Rs NIL) based on interim directions.

(iii) Income Tax: There are various demands raised by the Income Tax authorities amounting to Rs.315.53 lakhs for which the company preferred appeals with Honourable High Court of Judicature at Hyderabad for the States of Telangana and Andhra Pradesh.

NOTE- 8

The Expenditure incurred on N V R Co-Operative Sugar Factory towards the Development of Factory and Cane Development Expenses etc, has been treated as Advance recoverable since the company is claiming the same from Government of Andhra Pradesh.

NOTE- 9

The company has not created any Deferred Tax Asset during the financial year since the company has brought forward un absorbed depreciation losses and is not expecting any taxable profits in force able future.

NOTE- 10

Segment Information : The company is operating in only one segment business of pharma and there is no geographical segment to be reported

NOTE- 11

The balances of trade receivables, trade payables, long term loans & advances, short term loans & advances, other current assets & other current liabilities are subject to confirmation from respective parties

NOTE- 12

During the year, the company has not made provision for gratuity on actuarial valuation.

NOTE- 13

Figures have been rounded off to nearest rupee. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. Also previous year figures are not comparable since they represent 15 months where as current period represent 6 months.


Sep 30, 2014

1 Corporate information

Krebs Biochemicals & Industires Ltd has been incorporated on 2nd December 1991. At present the company is engaged in the business of manufacture of active pharmaceutical ingredients. The company has two manufacturing facilities one at Regadichelaka, Nellore (Dist) and another one at Kothapalli Village, Kasimkota Mandal, Vishakapatnam (Dist)

2 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous years.

a) Terms/ rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividends recommended by the Board of Directors, if any are subject to the approval of the shareholders in the ensuing Annual General Meeting.In the event of liquidation of the Company, the equity share holders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of shares held.

b) All the installments falling due within 12 months from the date of Balance Sheet have been classified as curent liabilities, the aggregate of which is shown as ''current maturities of long-term borrowings'' under Note - 11, ''Other Current Liabilities''.

c) The existing secured loans of Syndicate Bank, Andhra Bank, J & K Bank are assigned to M/s Pinky Ventures Pvt. Ltd ( Non Banking Finance Company ) during the current accounting period together with all the rights, titele and interest, pledges and guarantees in respect of such loans. Therefore the existing outstanding loans of these banks in the books have been transferred to M/s Pinky Ventures Pvt. Ltd and shown under the head Current maturities of Long term Borrowings. This loan is secured by first charge on all movable and immovable fixed assets both present and future of the Company and pari passu second charge on the stocks of Raw-materials, Work-in-Progress, Finished Goods, Stores and Spares and book debts both present and future of the company. The loans are further secured by irrevocable and unconditional personal guarantees of the Promoters.

d) The existing secured loan of Exim Bank is taken over by M/s Edelweiss Asset Reconstruction Co.(EARC) ( Non Banking Finance Company) during the current accounting period together with all the rights, titele and interest, pledges and guarantees in respect of such loans. The company has entered in to a restructuring agreement with EARC on the following terms: i) upfront payment of Rs.50 lacs was paid in July 14 ii) Rs.16.00 Crores is payable to EARC, Rs.1.00 Crore is paybale before Sep, 2015 and is clasified as current maturities of Long Term Borrowings. Out of the remaining balance of Rs.15.00 Crores, Rs. 1.00 Core is payable in 2 quarterly instalments of Rs.50.00 lacs each and the remianing Rs.14.00 crores is payable in quarterly instlments of Rs.1.00 crore each ending with 30.09.2019. iii) For the balance of Rs.1.76 Crores the promoter had transferred 1.50 lacs equity shares of the company.

e) The existing secured loan of IDBI Bank is taken over by M/s Edelweiss Asset Reconstruction Co.(EARC) ( Non Banking Finance Company) during the current accounting period together with all the rights, titele and interest, pledges and guarantees in respect of such loans. Therefore the existing outstanding loans of this bank in the books has been transferred to M/s Edelweiss Asset Reconstruction Co.(EARC) and shown under the head Current maturities of Long term Borrowings.. This loan is secured by first charge on all movable and immovable fixed assets both present and future of the Company and pari passu second charge on the stocks of Raw-materials, Work-in- Progress, Finished Goods, Stores and Spares and book debts both present and future of the company. The loan is further secured by irrevocable and unconditional personal guarantees of the Promoters.

Note : The existing secured loans of Andhra Bank, Jammu & Kashmir Bank are taken over by M/s Pinky Ventures Pvt. Ltd ( Non Banking Finance Company ) during the current accounting period together with all the rights, titele and interest, pledges and guarantees in respect of such loans. Therefore the existing outstanding loans of these banks in the books have been transferred to M/s Pinky Ventures Pvt. Ltd and shown under the head Current Laibilities.

Note: The interest accrued and due for borrowings include interest dues up to March, 2012 for term loans were transferred to the respective loan accounts during the current accounting year. Since the banks have with drawn from CDR package and sent notices under SARFASEI Act, the company has not provided interest on term loans and working capital loans from 1st April, 2012 to 30th June, 2013 amounting to Rs. 887.62 lacs and Rs.265.02 lacs respectively. The secured loans of Syndicate Bank, Andhra bank and J & K Bank are assigned to Pinky Ventures Pvt. Ltd and the secured loans of IDBI and Exim Bank are taken over by Edelweiss Asset Reconstruction co and the interest on these loans are not provided by the company from 1st July, 2013 to the date of assignment amounts to Rs.650.86 lacs.

Note : The recovery of above Long Term Trade Receivables of Rs.2,159.65 Lakhs is doubtful. However, the management is of the opinion that no provision is necessary during the year against the above amount as the company is pursuing the matter and the amount may be recovered.

NOTE- 3

In the opinion of the managemnt, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

NOTE- 4

i) Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

ii) Details of total outstanding dues to Micro and Small Enterprises as per "Micro, Small and Medium Enterprises Development Act, 2006"

NOTE- 5

Fixed Deposit Receipts for Rs.31.60 lakhs (previous year Rs. 31.60 lakhs) are in lien with Bankers towards margin money for Letters of Credit & Bank Guarantees issued by them.

NOTE- 6

Interest Free Sales Tax :

(i) During the year the company has availed interest free sales tax Loan of Rs. NIL for its pharma division unit at Kothapalli. The interest free sales tax loan availed by the unit so far stood at Rs. 451.76 lakhs (previous Year Rs. 451.76 lakhs).

(ii) During the year the company has paid interest free sales tax Loan of Rs. Nil for its pharma division unit at Regadichelika. The interest free sales tax loan outstanding is Rs. 59.80 lakhs (previous Year Rs. 59.80 lakhs).

NOTE- 7

Contingent Liabilities :

The following contingent liabilities are not provided for.

(i) On account of Letters of Credit and Bank Guarantees (net of margin monies) amounting to Rs. Nil (Previous year Rs.Nil)

(ii) Sales Tax: There are various demands raised by the sales tax authorities amounting to Rs.220.30 lakhs (Previous year Rs. 7.84 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL).

(iii) Excise Duty: There are various demands raised by the Excise authorities amounting to Rs.3.34 lakhs (Previous Year Rs.3.34 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL) based on interim directions.

(iv) Income Tax: There are various demands raised by the Income Tax authorities amounting to Rs.315.53 lakhs for which the company preferred appeals with Hon''ble High Court of A.P.

NOTE- 8

The Expenditure incurred on N V R Co-Operative Sugar Factory towards the Development of Factory and Cane Development Expenses etc, has been treated as Advance recoverable since the company is claiming the same from Government of Andhra Pradesh.

NOTE- 9

As per Accounting Standard 22 "Accounting for Taxes on income" issued by the Institute of Chartered Accountants of India Rs.39.99 lakhs (Previous year Deferred Tax Asset of Rs 74.02 lakhs) of deferred tax liability arising during the financial year has been debited to the current year''s Profit and Loss account.

NOTE- 10

Segment Information : The company is operating in only one segment business of pharma and there is no geographical segment to be reported

NOTE- 11

Debtors, other advances and creditors are subject to confirmations.

NOTE- 12

During the year, the company has not made provision for gratuity on actuarial valuation.


Mar 31, 2012

1 Corporate information

Krebs Biochemicals & Industires Ltd has been incorporated on 2nd December 1991. At present the company is engaged in the business of manufacture of active pharmaceutical ingredients. The company has two manufacturing facilities one at Regadichelaka, Nellore (Dist) and another one at Kothapalli Village, Kasimkota Mandal, Vishakapatnam (Dist).

2 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous years.

a) Terms/ rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividends recommended by the Board of Directors, if any are subject to the approval of the shareholders in the ensuing Annual General Meeting.In the event of liquidation of the Company, the equity share holders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of shares held.

a) All the installments falling due within 12 months from the date of Balance Sheet have been classified as curent liabilities, the aggregate of which is shown as 'current maturities of long-term borrowings' under Note - 11, 'Other Current Liabilities'.

b) Term Loans from IDBI, Exim Bank, Syndicate Bank and the WCT Loans from Andhra Bank, The Jammu & Kashmir Bank & United Bank of India are secured by first charge on all movable and immovable fixed assets both present and future of the Company (Subject to prior charges on specified movables created/ to be created in favour of Company's bankers by way of security for borrowings of working capital) and pari passu second charge on the stocks of Raw-materials, Work-in-Progress, Finished Goods, Stores and Spares and book debts both present and future of the company. The loans are further secured by irrevocable and unconditional personal guarantees of the Promoters namely, Dr.R.T.Ravi and Smt. Hemalata Ravi.

c) Interest & Repayament schedule of the Term Loans from IDBI, Exim Bank, Syndicate bank and the WCT Loans from Andhra Bank, The Jammu & Kashmir Bank and United Bank of India are detailed below as per CDR approved package:

Note : The working capital facilities from Andhra Bank, The Jammu & Kashmir Bank Ltd and United Bank of India are secured by first Charge on the stocks of Raw-materials, Work- in-Progress, Finished Goods, Stores and Spares and book debts of the Pharma Division and pari passu second charge on fixed assets of the Pharma Division. The loans are further secured by irrevocable and unconditional personal guarantees of the Promoters namely, Dr. R.T. Ravi and Smt. Hemalata Ravi.

NOTE- 3

In the opinion of the managemnt, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

NOTE- 4

i) Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

NOTE- 5

Fixed Deposit Receipts for Rs.41.60 lakhs (previous year Rs. 28.26 lakhs) are in lien with Bankers towards margin money for Letters of Credit & Bank Guarantees issued by them.

NOTE- 6 Interest Free Sales Tax :

(i) During the year the company has availed interest free sales tax Loan of Rs. NIL (provisional) for its pharma division unit at Kothapalli. The interest free sales tax loan availed by the unit so far stood at Rs. 451.76 lakhs (previous Year Rs. 451.76 lakhs).

(ii) During the year the company has paid interest free sales tax Loan of Rs. 16.52 lakhs for its pharma division unit at Regadichelika. The interest free sales tax loan outstanding is Rs. 59.80 lakhs (previous Year Rs. 76.32 lakhs).

NOTE- 7

Contingent Liabilities :

The following contingent liabilities are not provided for.

(i) On account of Letters of Credit and Bank Guarantees (net of margin monies) amounting to Rs. 394.02 lacs (Previous year Rs. NIL/-)

(ii) Sales Tax: There are various demands raised by the sales tax authorities amounting to Rs.7.84 lakhs (Previous year Rs. 7.84 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL).

(iii) Excise Duty: There are various demands raised by the Excise authorities amounting to Rs.3.34 lakhs (Previous Year Rs.3.34 lakhs) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL) based on interim directions.

(iv) Income Tax: There are various demands raised by the Income Tax authorities amounting to Rs.315.53 lakhs for which the company preferred appeals with Hon'ble High Court of A.P.

NOTE- 8

The Expenditure incurred on N V R Co-Operative Sugar Factory towards the Development of Factory and Cane Development Expenses etc, has been treated as Advance recoverable since the company is claiming the same from Government of Andhra Pradesh.

Due to inadequate profits during the Financial year, the company has paid only the minimum remuneration by way of Salary & Perquisites to Managing Director.

NOTE- 9

As per Accounting Standard 22 "Accounting for Taxes on income" issued by the Institute of Chartered Accountants of India Rs.190.16 lakhs (Previous year Rs 331.48 lakhs) of deferred tax asset arising during the financial year has been credited to the current year's Profit and Loss account.

NOTE- 10

Segment Information : The company is operating in only one segment business of pharma and there is no geographical segment to be reported.

NOTE- 11

Debtors, other advances and creditors are subject to confirmations.

NOTE- 12

During the year, the company has not made provision for gratuity on actuarial valuation.

NOTE- 13

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2010

1. Fixed Deposit Receipts for Rs.26,65,000/- (previous year Rs. Rs.1,65,000/-) are in lien with Bankers towards margin money for Bank Guarantees issued by them.

2. Secured Loans

a) Term Loans:

Term Loans from IDBI, Exim Bank, Syndicate Bank and the WCT Loans from Andhra Bank, The Jammu & Kashmir Bank & United bank of India are secured by first charge on all movable and immovable fixed assets both present and future of the Company (Subject to prior charges on specified movables created/ to be created in favour of Companys bankers by way of security for borrowings of working capital) and pari passu second charge on the stocks of Raw-materials, Work-in-Progress, Finished Goods, Stores and Spares and book debts both present and future of the company. The loans are further secured by irrevocable and unconditional personal guarantees of the Promoters namely, Dr.R.T.Ravi and Smt. Hemalata Ravi.

b) Working Capital Loans :

The working capital facilities from Andhra Bank, The Jammu & Kashmir Bank Ltd and United Bank of India are secured by first Charge on the stocks of Raw-materials, Work-in-Progress, Finished Goods, Stores and Spares and book debts of the Pharma Division and pari passu second charge on fixed assets of the Pharma Division. The loans are further secured by irrevocable and unconditional personal guarantees of the Promoters namely, Dr. R.T. Ravi and Smt. Hemalata Ravi.

3. During the year the company has availed interest free sales tax Loan of Rs. 13,34,721/- (provisional) for its pharma division unit at Kothapalli. The interest free sales tax loan availed by the unit so far stood at Rs. 4,21,84,916/- (previous Year Rs. 3,96,06,972/-).

4. During the year the company has paid interest free sales tax Loan of Rs. 15,41,763/-for its pharma division unit at Regadichelika. The interest free sales tax loan outstanding is Rs. 95,33,160/-(previous Year Rs. 1,10,04,305/-).

5. Contingent Liabilities:

The Following contingent liabilities are not provided for:

i. On account of Letters of Credit and Bank Guarantees (net of margin monies) amounting to Rs. NIL (Previous year Rs. NIL/-)

ii. Sales Tax: There are various demands raised by the sales tax authorities amounting to Rs.7,84,4191- (Previous year Rs. t92,86,516/-) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs 98,37,102/-).

iii. Excise Duty: There are various demands raised by the Excise authorities amounting to Rs.3,33,650/- (Previous Year Rs.3,33,650/-) for which the company preferred appeals with higher authorities. Pending disposal of appeals, the company has deposited an amount of Rs NIL (Previous Year Rs NIL) based on interim directions.

iv. Income Tax: There are various demands raised by the Income Tax authorities amounting to Rs.3,15,52,734/- for which the company preferred appeals with Honble High Court of A.P.

6. The Expenditure Incurred on N V R Co-Operative Sugar Factory towards the Development of Factory and Cane Development Expenses etc, has been treated as Advance recoverable since the company is claiming the same from Government of Andhra Pradesh.

7. The Company has not received information from vendor regarding the status under the Micro Act, and hence disclosures relating to amounts unpaid as at end of the year together with interest/payable under the Act have not given.

Due to inadequate of profits during the Financial year, the company has paid only the minimum remuneration by way of Salary & Perquisites to Managing Director. Remuneration to Director Sri Avinash Ravi is for Twelve Months.

8. The company is providing gratuity on accrual basis, based on actuarial valuation.

9. Related Party Disclosures:

a) Name of the related parties: .

Associate Companies Visakha Foods Pvt. Ltd Key Management Personnel: Dr.R.T.Ravi, Managing Director.

Mr. Avinash Ravi, Whole Time Director Relatives of Key Management Personnel: Mrs. Hemalata Ravi W/O Dr.R.T.Ravi

10. As per Accounting Standard 22 "Accounting for Taxes on income" issued by the Institute of Chartered Accountants of India Rs.9,01,24,865/-(Previous year Rs.93,36,153/-) of deferred tax asset arising during the financial year has been credited to the current years Profit and Loss account.

11. Sundry Debtors amounting to Rs.28.27 Crores includes Rs. 19.74 Crores, the recovery of which is doubtful. However, the management is of the opinion that no provision is necessary during the year against the above amount as the company is pursuing the matter and the amount may be recovered.

12. Segment Information:

The company is operating in only one segment business of pharma and there is no geographical segment to be reported

13. Additional information pursuant to the provisions of paragraph 3,4C and 4D of part II of Schedule VI of the Companies Act, 1956.

14. Debtors, Other Advances & Creditors are subject to confirmations.

15. Previous years figures are re-grouped wherever necessary to conform to the classification adopted for the current year and figures are rounded off to the nearest Rupee.

16. The Schedules referred to above form part of the Accounts.

 
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