Mar 31, 2023
Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company
has a present obligation as a result of past
events and it is probable that an outflow
of resources will be required to settle the
obligation in respect of which a reliable
estimate can be made. If effect of the time
value of money is material, provisions are
discounted using an appropriate discount
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is
used, the increase in the provision due to the
passage of time is recognized as finance cost.
Contingent Liabilities are not recognized but
are disclosed in the notes.
t) Offsetting
Financial assets and financial liabilities are offset
and the net amount presented in the balance
sheet when, and only when, the Company
currently has a legally enforceable right to set
off the amounts and it intends either to settle
them on a net basis or to realize the asset and
settle the liability simultaneously.
u) Earnings per share
Basic earnings per share are computed using
the weighted average number of equity shares
outstanding during the period adjusted for
treasury shares held. Diluted earnings per
share is computed using the weighted-average
number of equity and dilutive equivalent shares
outstanding during the period,
v) Operating cycle
The Group classifies an asset as current asset
when: it expects to realise the asset, or intends
to sell or consume it, in its normal operating
cycle;
⢠it holds the asset primarily for the purpose
of trading;
⢠it expects to realise the asset within twelve
months after the reporting period; or
⢠the asset is cash or a cash equivalent
unless the asset is 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 classified as current when -
⢠it expects to settle the liability or consume
it, in its normal operating cycle;
⢠it holds the liability primarily for the
purpose of trading;
⢠the liability is due to be settled within
twelve months after the reporting period;
or
⢠it does not have an unconditional right
to defer settlement of the liability for at
least twelve months after the reporting
period. Terms of a liability that could, at
the option of the counter party, result
in its settlement by the issue of equity
instruments do not affect its classification.
All other liabilities are classified as non-current.
The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash or cash equivalents The
Group''s normal operating cycle is twelve
months.
w) Exceptional Items:
Exceptional items refer to items of income or
expense within the statement of profit and loss
from ordinary activities which are nonrecurring
and are of such size, nature or incidence
that their separate disclosure is considered
necessary to explain the performance of the
Group.
1.2 Recent accounting developments
The Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. On March 31, 2023, MCA
amended the Companies (Indian Accounting Standards)
Rules, 2015 by issuing the Companies (Indian Accounting
Standards) Amendment Rules, 2023, applicable from
April 1,2023, as below:
Ind AS 1, "Presentation of Financial Statements"-
Companies are now required to disclose material
accounting policies rather than their significant
accounting policies. Accounting policy information,
together with other information, is material when it can
reasonably be expected to influence decisions of primary
users of general-purpose financial statements.
Ind AS 8, "Accounting policies, Change in Accounting
Estimates and Errors"- Definition of ''change in account
estimate'' has been replaced by revised definition
of ''accounting estimate. As per revised definition,
accounting estimates are monetary amounts in the
financial statements that are subject to measurement
uncertainty.
- A company develops an accounting estimate to
achieve the objective set out by an accounting
policy.
- Accounting estimates include:
a) Selection of a measurement technique (estimation
or valuation technique)
b) Selecting the inputs to be used when applying the
chosen measurement technique.
The amendments will help entities to distinguish between
accounting policies and accounting estimates.
Ind AS 12, "Income Taxes"- Narrowed the scope of the
Initial Recognition Exemption (IRE) (with regard to leases
and decommissioning obligations). Now IRE does not
apply to transactions that give rise to equal and offsetting
temporary differences.
Accordingly, companies will need to recognise a deferred
tax asset and a deferred tax liability for temporary
differences arising on transactions such as initial
recognition of a lease and a decommissioning provision.
The Group has evaluated the effect of the above on the
financial statements and the impact is not material.
Mar 31, 2022
ASSETS HELD FOR SALE ACCOUNTING POLICY
Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset or disposal group and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification.
Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment''s and intangible assets once classified as held for sale are not depreciated or amortised.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
(1) represents a separate major line of business or geographical area of operations,
(2) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the Statement of Profit and Loss. Additional disclosures are provided hereunder. All other notes to the Standalone financial statements mainly include amounts for continuing operations, unless otherwise mentioned.
The shareholders of the Company vide special resolution dated March 15,2022 by way of postal ballot, approved the transfer of Active Pharmaceuticals ingredidant ("API") business undtertaking to Shilpa Pharma Lifesciences Limited (formerly known as Shilpa Corporate Holdings Private Limited, a wholly owned subsidiary of the Company as a going conern on slump sale basis through Business Transfer Agreement.
Rights, preference and restriction attached to each class of shares :
Equity Shares:
The Company has only one class of equity shares having par value of Re .1/- per share. Each holder of equity shares is entitle to one vote per share.
In the event of liquidation, the holders of equity are entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Preferential allotment of equity shares
During the year ended 31 March 2022, the Company has raised additional capital aggregating to '' 29683.95 lakhs (net of expenses of '' 67.05 lakhs ) by way of preferential allotment of equity shares. The Company has issued 52,75,000 shares at a price of '' 564/- per share whereby equity share capital has increased by '' 52.75 lakhs and securities premium account is increased by '' 29631.20 lakhs (net of expenses of '' 67.05 lakhs).
1. Out of the guarantee given of '' 29205 (P.Y '' 18000) lakhs, the outstanding liabilities against corporate guarantee given to banks for Subsidiaries for the financial year ended 31.03.2022 is '' 19851.69 lakhs (PY 17650).
2. The Company is involved in disputes, lawsuits, proceedings etc. including patent and commercial matters that arise from time to time in the ordinary course of business. Management is of the view that above matters are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.
Level 1: Hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds, ETFs and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) 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 level3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation technique used to determine fair value:
1) The use of quoted market prices or dealer quotes for similar instruments
2) The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves
3) The fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date.
The Company activities expose it to a variety of financial risks such as Market Risk, Credit Risk and Liquidity Risk. The company''s focuses on minimizing potential adverse effect on its financial performance.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The changes in the values of financial assets/liability may result from change in the foreign currency exchange rates (Foreign Currency Risk), change in interest rates (Cash flow & interest rate risk), and change in price of investments (Price Risk).
(i) Foreign Currency Risk
The Company operates internationally and a major portion of the business is transacted in USD, EURO & GBP currencies and consequently, the Company is exposed to foreign exchange risk through operating and borrowing activities in foreign currency. The Company holds derivative instruments such as foreign exchange forward, interest rate swaps and option contracts to mitigate the risk of changes in exchange rates and foreign currency exposure.
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest expenses/ income and to manage the interest rate risk, the Company weighted average balance manage its interest rate risk by having portfolio of fixed / variable interest rate on long / short term borrowings. The analysis is prepared assuming the amount of liability outstanding at the ending of the reporting period is the average weighted balance of the respective reporting period.
1. The Company has hedged ECB loan availed from Standard chartered bank. Therefore not subject to interest risks defined under Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.
(iii) Price Risk
Company does not have any exposure to price risk , as there is no market based equity investment made by the Company.
(B) Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The credit risk is arises from its operation activity primarly from trade receivable and from its financial activity. Customer credit risk is controlled by analysis of credit limit and credit worthiness of the customer on a continuous basis to whom the credit has been granted.
Long outstanding receivable from customer are regularly monitored and transaction with such customer are covered under letter of credit. The maximum exposure to credit risk at the reporting date is the carrying value of trade and other receivable. Three customer are accounted for more than 10% of the trade receivable as of 31 March, 2022 and Two customer for 31 March, 2021. Since the Company is dealing with the customer from past several years, hence there is no concordent risk in dealing with said customers.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations of its financial liability. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for making liability when they are due, under normal and stressed condition without incurring losses and risk.
The present available working capital facility is sufficient to meet its current requirment. Accordingly no liquidity risk is perceived. In addition, the Company maintains the following line of credit facility
The key objective of the Company''s capital management is to ensure that it maintains a stable capital structure with the focus of safeguard their ability to continue as a going concern, benefits for stakeholders, creditors and market confidence. Continue to maintain excess liquidity to shareholders by distributing dividends in future.
In accordance with paragraph 3 of Indian Accounting Standard (Ind AS) 108 - Operating Segments, segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these standalone financial statements.
46 A sum of '' 278.33 lakhs is payable to Micro, Small and Medium Enterprises as at 31 March, 2022 ('' 760.65 lakhs as at 31 March, 2021). There are no Micro, Small and Medium Enterprises, to whom the Company overdues, which are outstanding for more than 45 days during the year and also as at 31 March, 2022. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act has been determined to the extent such parties has been identified on the basis of information available with the Company and relied upon by the Auditors.
47 Board of Directors had approved Draft Scheme for merger of its wholly owned subsidiary (INM Technolgies Private Limited) with the Company, during last fianncial year at their meeting held on September 9, 2020, under Section 233 of the Companies Act, 2013. The Company has filed second stage petition with National Company Law Tribunal (Bengaluru bench) and awaiting for final order."
48 The Company has taken into account all the possible impacts of COVID-19 in preparation of these standalone financial statements, including but not limited to its assessment of, liquidity and going concern assumption, recoverable values of its financial and non-financial assets, impact on revenue recognition and impact on leases. The Company has carried out this assessment based on available internal and external sources of information up to the date of approval of these standalone financial statements and believes that the impact of COVID-19 is not material to these financial statements and expects to recover the carrying amount of its assets. The impact of COVID-1 on the standalone financial statements may differ from that estimated as at the date of approval of these standalone financial statements owing to the nature and duration of COVID-19.
49 Investments are tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of each investment. When the recoverable amount of the investment is less than its carrying amount, an impairment loss is recognised.
The recoverable amounts of the above investments have been assessed using a value-in-use model. Value in use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the business. Initially, a posttax discount rate is applied to calculate the net present value of the post-tax cash flows. Key assumptions upon which the Company has based its determinations of value-in-use include :
a) Estimated cash flows based on internal budgets and industry outlook for a period of five years and a terminal growth rate thereafter.
b) A terminal value arrived at by extrapolating the last forecasted year cash flows to perpetuity, using a constant longterm growth rate ranging from 1-3%. This long term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector.
c) The after tax discount rates used reflect the current market assessment of the risks specific to the investment, the discount rate is estimated based on the weighted average cost of capital for respective investment. After tax discount rate used range from 12%-16%
The Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.
50 Balance of trade receivables/ trade payables/advances and security deposits are subject to confirmation
51 Additional disclosures required by Schedule III (amendments dated 24 March 2021) to the Companies Act, 2013;
1) The Company do not have any Benami property and neither any proceedings have been initiated or is pending against the Company for holding any Benami property.
2) The Company do not have any transactions with companies struck off.
3) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
4) The Company has not been declared a wilful defaulter by any bank or financial institution or any other lender during the current period.
5) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds), other than in the ordinary course of business by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
6) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year
7) The Company has not made any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
8) The Company has complied with number of layers prescribed under clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
9) The quarterly returns of current assets filed by the Company with banks are in agreement with books of account.
Mar 31, 2018
CORPORATE INFORMATION
Shilpa Medicare Limited (SML) is a listed Company engaged in the manufacturing of API, Formulation and Development service, Shilpa Medicare Limited (SML) started its operations as API manufacturer way back in 1987 at Raichur, Karnataka-India. The Company started its commercial production in November 1989. In November 1993, Shilpa Medicare Limited was converted into a Public Limited Company. The Company was listed on Bombay Stock Exchange on June 19, 1995 and National Stock Exchange (NSE) on Dec 03, 2009. Subsequently Shilpa Medicare has gained World Health Organization-Good Manufacturing Practices (GMP) Certificate recognition SML is presently dealing in high-quality Active Pharmaceutical Ingredients (APIs), Bulk drug, Intermediates, Formulations, New Drug Delivery Systems, Peptides / Biotech products and Specialty Chemicals etc. using sophisticated technology meticulously in order to comply with laid down international standards/specifications. Today SML is among the worldâs leading suppliers of Oncology/Non-Oncology APIs and intermediates.
1. Basis of Preparation of Financial Statements
I. The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as specified under section 133 of the Companies Act 2013 read together with the Rule 4 of Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) Amendment Rules 2016 to the extent applicable and the other relevant provisions of the Act, pronouncements of the regulatory bodies applicable to the company. The accounting policies are applied consistently to all the years presented in the financial statements.
The financial statements have been prepared on the historical cost convention and on accrual basis, except for the following assets and liabilities which have been measured at fair value wherever applicable.
- Derivative financial instruments
- Certain financial assets / liabilities measured at fair value,
- Defined Benefit Plans at fair value.
The Standalone financial statements of the Company for the year ended March 31, 2018 were approved by the Board of Directors on 28/05/2018.
II. The financial statements are presented in Indian Rupees which is the functional currency for the Company. All amounts have been rounded-off to the nearest lakhs unless otherwise stated.
III. The financial statements have been prepared to comply in all material aspects with applicable accounting principles in India and as notified under the Companies Act 2013 and other relevant provisions of the Act.
IV Basis of measurement
Current Vs Non-current classification
The assets and liabilities in the balance sheet are presented based on current/non-current classification.
An asset is current when it satisfies the below mentioned criteria:
(i) Expected to be realised or intended to be sold or consumed in normal operating cycle, or
(ii) Held primarily for the purpose of trading, or
(iii) Expected to be realised within twelve months after the reporting period, or
(1V) 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 assets.
A liability is current when it satisfies the below mentioned criteria:
(i) Expected to be settled in normal operating cycle, or
(ii) Held primarily for the purpose of trading, or
(iii) Due to be settled within twelve months after the reporting period, or
(1V) 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.
1.1. Recent accounting pronouncements:
Ind AS 115: Revenue from Contract with Customers:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The standard permits two possible methods of transition:
Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch â up approach).
The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements.
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The effective date for adoption of Ind AS 21 is financial periods beginning on or after April 1,2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements.
2 (a) Rights, preference and restriction attached to each class of shares:
Equity shares:
The Company has only one class of equity shares having par value of Re. 1/- per share. Each holder of equity shares is entitle to one vote per share.
The Board of Directors have declared and paid interim dividend of Re. 0.70 (P.Y 0.60) per equity of face value of Re.l/- per share
In the event of liquidation, the holders of equity are entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
2 (b) Details of Equity Shares allotted as fully paid-up pursuant to contracts without payment being received in cash during the period of five years immediately preceding the Balance Sheet date.
Actuarial gain / loss is recognized immediately. The estimates of salary increase, inflation, promotion, seniority etc taken in account. The Company has various schemes (funded/unfunded) for payment of gratuity to all eligible employees calculated at specific no. of days (ranging from 15 days to 1 month) of the last drawn salary depending upon tenure of service for each year of completed service subject to minimum of five years payable at the time of separation upon superannuation or on exit otherwise.
Sensitivity of signification actuarial assumptions is computed by varying one actuarial assumption used for the valuation of defined benefit obligation by 100 basis points keeping all other actuarial assumption constant.
Level 1: Hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds, ETFs and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAY
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) 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. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation technique used to determine fair value:
1) The use of quoted market prices or dealer quotes for similar instruments
2) The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves
3) The fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date.
3. FINANCIAL RISK MANAGEMENT
The Company activities expose it to a variety of financial risks such as Market Risk, Credit Risk and Liquidity Risk. The Companyâs focuses on minimizing potential adverse effect on its financial performance
A) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The changes in the values of financial assets/liabilities may result from change in the foreign currency exchange rates (Foreign Currency Risk), change in interest rates (Cash flow & interest rate risk), and change in price of investments (Price Risk).
(i) Foreign Currency Risk
The Company operates internationally and a major portion of the business is transacted in USD, EURO & GBP currencies and consequently, the Company is exposed to foreign exchange risk through operating and borrowing activities in foreign currency. The Company holds derivative instruments such as foreign exchange forward, interest rate swaps and option contracts to mitigate the risk of changes in exchange rates and foreign currency exposure.
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest expenses/income and to manage the interest rate risk, the Company weighted average balance manage its interest rate risk by having portfolio of fixed/variable interest rate on long/short term borrowings. The analysis is prepared assuming the amount of liability outstanding at the ending of the reporting period is the average weighted balance of the respective reporting period.
According to the Company interest rate risk exposure is only for floating rate borrowings, change in 0.5% in the interest rate component applicable to the short term borrowings would effect the Companies net profit before tax at the end of the reporting period year ended March 31, 2018 and March 31, 2017, respectively.
Note :
1. The Company has hedge ECB loan availed from Standard chartered bank. Therefore not subject to interest risk as defined under Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.
2. Interest on term loan from HSBC is not considered for interest rate risk as interest on such term loan is capitalized till the assets are put to use and are not charged to profit & loss account.
(iii) Price Risk
Company does not have any exposure to price risk, as there is no market based equity investment made by the Company.
(B) Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The credit risk is arises from its operation activity primarily from trade receivable and from its financial activity. Customer credit risk is control by analysis of credit limit and credit worthiness of the customer on a continuous basis to whom the credit has been granted.
Long outstanding receivable from customer are regularly monitored and transaction with such customer are covered, under letter of credit the maximum exposure to credit risk at the reporting date is the carrying value of trade and other receivable. Two customer are accounted for more than 10% of the trade receivable as of March 31, 2018 and March 31, 2017. Since the Company is dealing with the said customers from past several years, hence there is no concordant risk in dealing with said customers.
Expected credit loss assessment
The Group reviewed customers outstanding at the end of each reporting period and determine incurred and expected credit losses. Past trend of impairment of trade receivables do not reflect any significant credit losses. The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
(C) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations of its financial liability. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for making liability when they are due, under normal and stressed condition without incurring losses and risk.
The present available working capital facility is sufficient to meet its current requirement. Accordingly no liquidity risk is perceived. In addition, the Company maintains the following line of credit facility
The table below provides details regarding the undiscounted contractual maturities of significant financial liabilities as of March 31, 2018:
4. CAPITAL MANAGEMENT
The key objective of the Companyâs capital management is to ensure that it maintains a stable capital structure with the focus of safeguard their ability to continue as a going concern, benefits for stakeholders, creditors and market confidence. Continue to maintain excess liquidity to shareholders by distributing dividends in future.
Companyâs vision is to keep the ratio below 1.00 and its adjusted net debt to equity ratio was as follows
5. CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a Company, has to spend 2% of its average net profits of three immediate preceding financial year. The Company has formed trust by name âShilpa Foundationâ to commit the expenditure, under the various activity like pure and safe drinking water, Orphanage home, Education promotion, Hospital /Medical facility, Swatch bharat, Green project with local bodies/NGO to make eco-friendly environment.
The Company has transferred Rs. 245.63 Lakhs (327.28) lakhs to âShilpa Foundationâ. The amount of earmarked fund is insufficient to kick start the project, the committee has set aside the fund to take up the project when sufficient fund are available for initiating the project.
6. SEGMENT INFORMATION
The Company is mainly engage in the business of manufacturing of pharmaceutical product and wind power generation. The formulation and product development are inter related and integral part of business of âpharmaceutical productsâ. In accordance with the provision of Ind AS -108 power segment in not falling in the prescribed limits specified, hence segment reporting is not applicable
Note: Non-current assets excludes financial assets.
(a) Information about major customer
The Company has two customers who contributed more than 10% of the Company''s total revenue during the current and previous year
7. DISCLOSURE ON SPECIFIED BANK NOTES (SBNS)
The disclosures regarding details of specified bank notes held and transacted during 8th November 2016 to 30th December 2016 as defined in MCA notification G.S.R. 308 dated March 30, 2017, details of Specified Bank Notes (SBN) are as below;
# Specified Bank Notes shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 8, 2016.
8. OPERATING LEASE
The Company has entered into lease agreements for use of land for its production and R&D facility which expires over a period. Future minimum lease payments and payment profile of non-cancellable operating leases are as under:
9. Related party transactions
Related parties where control exists and related parties with whom transactions have taken place during current year are listed below;
List of Related Parties
1. Associates
a) Reva Pharmachem Pvt. Ltd.
2. Subsidiaries
a) Zatortia Holdings Ltd. (Wholly- owned Subsidiary)
b) Loba Feinchemie GmbH- (Step-down Subsidiary)
c) Shilpa Therapeutics Pvt. Ltd. (Wholly- owned Subsidiary)
d) INM Technologies Pvt. Ltd. (Subsidiary)
e) INM Nuvent Paint Pvt Limited ((Step-down Subsidiary)
f) Koanna Healthcare Ltd. (Wholly- owned Subsidiary)
g) Koanna Healthcare Ltd. (Wholly- owned Subsidiary)
h) Makindus LLC. (Subsidiary)
3. Joint Venture (JV)
a) Maia Pharmaceuticlas INC.
b) Raichem Medicare Pvt. Ltd.
c) Reva Medicare Pvt. Ltd.
4. (i) Key Management Personnel-(KMP)
a) Omprakash Inani - Chairman
b) Vishnukant C. Bhutada - Managing Director
c) Vimal Kumar Shrawat - Chief Operating Officer
d) Rajendra Dugar - Chief Financial Officer (Resigned)
e) Sushil Bajaj - Chief Financial Officer
f) Madhusudhan Reddy - Company Secretary
(ii) Remuneration paid to other Directors
a) Ajeet Singh Karan-Independent Director
b) Carlton Felix Pereira-Independent Director c ) Pramod Kasat-Independent Director
d) Rajender Sunki Reddy-Independent Director
e) N.P.S Shinh-IndependentDirector
f) Namrata Bhutada-Non-Executive Director
5. Relatives
a) Deepak Kumar Inani
b) Keshav Bhutada
c) Madhav Bhutada
d) Triveni Inani
6. Enterprises having common Directors/ Board of Trustees a) Shilpa Foundation
b ) Mohini Infra (P) Ltd
10. Out of the sum of Rs 41.78 lakhs( P.Y 48.27) the Company is in the process of filing appeal before the Karnataka Appellate Tribunal for refund of input tax paid on Capital Goods amounting to Rs.26.48 lakhs (PY: Rs.26.48) lakhs and Rs. 2.43 Lakhs paid on regular consumable items which in its opinion are allowable under the Act, however disallowed by the assessing authority under Karnataka Value Added Tax Act, 2003 The same is shown under note 07b(ii)
11. Navya Biological Pvt. Ltd. Hubli has been merged with the Company with effect from 1 April 2016. A petition for sanctioning the scheme of merger has been filed with the â National Company LawTribunal (NCLT), Bengaluru Bench, Bengaluruâ. The scheme has been approved by NCLT vide their order dated 24/11/2017 with effective date 01.04.2016.The consideration of merger has been paid in the form of equity shares 1399994 at face value of Rs 1/- each.
The Purchase price allocation as per Ind AS 103 Business Combination has resulted into recognition of following assets and liabilities:
12. Equity shares allotted during Current Year 1,399,994 (Previous Year 3,025,000) are considered for computing weighted EPS.
13. Preference shares dividend from Subsidiaries andjoint ventures amounting to Rs.276.58 lakhs has not been recoginised in the earlier to previous financial year. Effect of such cumulative preference dividend has been shown as âPrior period errorâ under the head âOther Equityâ.
14. Balances of trade receivables/trade payables/advances and security deposits are subject to confirmation.
15. Figures of the previous year have been regrouped/rearranged wherever necessary.
Mar 31, 2017
1. CAPITAL MANAGEMENT
The companyâs objectives when managing capital are to
i) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.
ii) Maintain an optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio:
Net debt (total borrowings net of cash and cash equivalents) divided by Total âequityâ (as shown in the balance sheet)
2. CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a Company, has to spend 2% of its average net profits of three immediate preceding financial year. The Company has created trust by name ''Shilpa Foundation'' to commit the expenditure under the various activity like setting-up of Orphanage home to provide scholarship/education funds to merit and needy students to provide purified and safe drinking water, green project with local bodies/NGO to make eco friendly environment.
The Company has transferred Rs. 327.28 lakhs to "Shilpa Foundation" during the year. The amount of earmarked fund is insufficient to kick start the project, the committee has set aside the fund to take up the project when sufficient fund are available for initiating the project.
3. SEGMENT INFORMATION
The Company is mainly engage in the business of manufacturing of pharmaceutical product and wind power generation. The formulation and product development are inter related and integral part of business of "pharmaceutical poducts". In accordance with the provision of Ind AS -108 power segment in not falling in the prescribed limts specified under Ind-AS -108, hence segment reporting is not applicable.
#Specified Bank Notes shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 8, 2016.
4. Related party transactions
Related parties where control exists and related parties with whom transactions have taken place during the year are listed below:
(i) Key Management Perosonnel
(a) Omprakash Inani (Chairman)
(b) Vishnukanth C. Bhutada (Managing Director)
(c) Vimal Kumar Shrawat (Chief Operating Officer)
(d) N.C Bhandari (Chief Financial Officer - Resigned)
(e) Rajendra Dugar (Chief Financial Officer)
(f) Sujani Vasireddy (Company Secretary - Resigned)
(g) Madhu Sudhan Reddy (Company Secretary)
(h) Ajay Vamuri (Company Secretary - Resigned)
(ii) Associates
a) Reva Pharmachem Pvt Ltd
(iii) Subsidiaries
(a) Zatortia Holdings Ltd (Wholly- owned Subsidary )
(b) Loba Feinchemie GmbH- (Step-down Subsidiary)
(c) Shilpa- Therapeutics Pvt. Ltd. (Wholly- owned Subsidary )
(d) INM Technologies Pvt Ltd. (Subsidary)
(e) Koanaa Healthcare Ltd U.K (Wholly- owned Subsidary )
(f) Koanaa Healthcare GmbH, Austria (Wholly- owned Subsidary )
(g) Makindus LLC. USA. (Subsidiary)
(iv) Joint Venture (JV)
a) Maia Pharmaceuticlas INC. USA
b) Raichem Medicare Pvt Ltd
c) Reva Medicare Pvt Ltd Relatives
(a) Dharmavati Bhutada
(b) Deepak Kumar Inani
(c) Keshav Bhutada
(d) Madhav Bhutada
(e) Namrata Bhutada
(v) Enterprises having common Directors/Board of Trustees
a) Shilpa Foundation
b) Mohini Infra Pvt Limited
Mar 31, 2016
1. In the opinion of the Board, all assets other than fixed assets
and non current investments, have a realisable value in the ordinary
course of business.
2. Balances of Trade Receivables / Trade Payables / Advances and
Security deposits are subject to confirmation.
3. Based on the information available with the Amount payable under
the " Micro, Small and Medium Enterprises Development Act, 2006" is
based on the information received by the Company. Amount due to such
Venders as at Balance Sheet date is Nil (0.12) Included in Trade
Payable Note no.08
4. The Company has exercised the option of capitalizing the exchange
difference arising on reporting of long term foreign currency monetary
item at rates different from those at which they where initially
recorded, so far as they related to the acquisition of depreciable
capital assets as per para 46A to AS-11.The effect of change in Foreign
Exchange Rates'' vide Notification No.GSR 914(E) dated 29th December,
2011 issued by The Ministry of Corporate Affairs. In other cases the
difference has been accumulated in ''Foreign Monetary Item Transalation
Difference A/c to be amortized over the balance period of such long
term assets as per said notification.
By virtue of above the Company has capitalized Rs 144.22 lakhs (PY Rs
105.09) lakhs to the Fixed Assets acquired out of such External
Commercial Borrowings (ECB). Being the exchange difference has been
accmulated "Foreign Monetary Iteam Transalation Difference A/c", being
Loss/gain arising on account of reinstatment of investment in Foreign
Subsidiary.
5. The Net worth of Reva Pharmachem Pvt Ltd (Associate Company) as at
the Balance Sheet date has been completely eroded. However, the
management is of the view that since the Investments are long term in
nature no provision is required to be made.
6. Out of the sum of Rs 48.27 lakhs(PY Rs.41.27 Lakhs) the Company
has filed appeals before the Karnataka Appellate Tribunal for refund of
input tax paid on Capital Goods amounting to Rs.26.48 lakhs (PY:
Rs.26.48) lakhs and Rs. 4.18 Lakhs (Rs.2.43 Lakhs) paid on regular
consumable items which has been disallowed by the assessing authority
under Karnataka Value Added Tax Act, 2003 while concluding the
assessment, which in the opinion of the Company are allowable under the
Act. The same is shown under note 14(c)(ii)
7. The Company has hedged the interest rate on ECB of US$ 10 MN . The
aggregate amount of loan covered under the said interest rate swap as
at March 31, 2016 is Rs. 1658.28 Lakhs US$ 2.5 MN ( P.Y.
Rs.3,129.53)(US$ 5.00 MN). The periodic net payments related to
interest rate swap is partly recorded as finanace cost & partly
recorded under pre-operative expenses since part of the amount is
utilized in the creation of assets which are pending for
capatilization.
8. Capital advances includes a sum of Rs.344.83 lakhs (P.Y
332.48)(reinstated amount) paid to ISO Tech Design, Canada towards
supply of machinery for its Formulation unit at Jadcherla. Due to
inordinate delay by vendor, the Company terminated its order and filed
a law suit for recovery of its amount alongwith interest and damages
with the local court in Canada. The hearing under process. As the
outcome of the case cannot be determined presently, the Company has not
made any provision.
9. During the year the face value of Company equity shares have been
split from Rs.2/- to Re.1/-. Effect of the same has been given in the
EPS for all the periods presented in accordance with Accounting
Standard 20 "Earnings per share" issued by the Institute of Chartered
Accountants of India (ICAI).
10. During the year the Income Tax Department has initiated action
under Section, 132 of the Income Tax Act, on 16.12.2015. The
proceeding are under way and as on the Balance Sheet date no demand has
been raised by the department. The liability if any, shall be dealt
with as and when the same arises.
11. Figures of the previous year have been regrouped/rearranged
wherever necessary.
Mar 31, 2014
(All amount are in Indian Rupees in lakhs, except shares data & where
otherwise stated)
1.(a) Rights, Preferences and Restrictions attached to each class of
Shares:
Equity Shares: The company has one vote per share held. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in case of
interim dividend. In the event of liquidation, the equity shareholders
are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their
shareholding.
* Fixed deposit with original maturity of more than 3-months has been
given in the form of Guarantee to " Chief Control Board Officer, "The
Andhra Pradesh Pollution Control Board", Hyderabad and Standard
Chartered Bank against LC/FLC
2. Contingent Liabilities
Particulars As at As at
31st March, 2014 31st March, 2013
a) Foreign letter of credit 1,258.59 1,304.13
b) Bank Guarantees / Corporate
Guarantee 10.00 10.90
c) Claims against the Company
not acknowledeged as debts 1,194.44 492.15
d) Estimated amount of contracts
remain to be executed on account of 1,837.18 2,199.70
capital commitments not provided
for (net of advance )
TOTAL 4,300.2~ 4,00688"
3. Figures of the previous year have been regrouped/rearranged
wherever necessary.
4.The Company is mainly engaged in the business of Bulk Drugs
Manufacturing. With a view to integrate its overall business, the
Company from the financial year 2013-2014 has commissioned its
formulation factilities alongwith development of few products in
formulation business. This business, the Company considers as
Inter-related and integrated business of "Pharmaceutical Products" and
hence no separate segemental reporting is required.
5.In the opinion of the Board, all assets other than fixed assets and
non current investments, have a realisable value in the ordinary course
of business
6. Balances of Trade receivables / Trade payables / Advances and
Security deposits are subject to confirmation.
7. The Company has not received any intimation from "Suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006. Hence, disclosures relating to amount unpaid as
at the year end together with interest paid / payable under this Act
cannot be ascertained.
8. The Company has exercised the option of capitalizing the exchange
difference arising on reporting of long term foreign currency monetary
items at rates difference from those at which they where initially
recorded , so far as they related to the acquisition of depreciable
capital assets as per para 46A to As-11" The effect of change in
Foreign Exchange Rates'' vide Notification No.GSR 914(E) dated 29th
December ,2011 issued by The Ministry of Corporate Affairs. In other
cases the difference has been accumulated in ''Foreign Monetary Iteam
Transsalation Difference A/c" to be amortized over the balance period
of such long term assets as per said notification. By virtueof above
the Company has capitalized Rs 545.90 lakhs (P.Y Rs 116.84) lakhs to
the Fixed Assets acquired out of such External Commercial Borrowings
(ECB)being the Exchange difference. Further, exchange gain / loss on
reinstatement of investments in Wholly owned Foregin subsidiary has
been accumulated in "Foreign Monetary Iteam Transalation Difference
A/c".
9. As on 31.03.2014 demands from Income Tax Department are as under:-
a) AY 2010-11 Rs 402.57 Lakhs ( P.Y 420.57) Lakhs
b) AY 2011-12 Rs 951.94 Lakhs
Based on the judcial pronouncement and legal advises, the Company has
contested the above demands before the CIT(Appeals), Hubli.
10. The Net worth of Reva Pharmachem Pvt Ltd (Associate Company) as at
the Balance Sheet date has been completely eroded. However, the
management is of the view that since the Investments are long term in
nature no provision is required to be made.
11. An amount of Rs 23.28 Lakhs paid in the year 2010-11 pertaining to
A.Y 2008-09 and Rs 100.00 Lakhs in 2013-14 pertaining to A.Y 2010-11
against the disputed tax demands for which the Company had filed an
appeal before the relevant authorities. Case of A.Y. 2008-09 has been
disposed - off in Company''s favour, and of A.Y 2010-11 is pending
before the authorities The same is shown under note no.14 c (i).
12. Out of the sum of Rs. 32.83 Lakhs (P.Y - Rs 30.48 lakhs) the
Company had preferred an appeal for refund of input tax paid on capital
goods amounting to Rs.26.88 lakhs (PY - Rs.26.88) lakhs before the
Hon.Tribunal under Karnataka Value Added Tax Act, 2003,which has been
remanded back by the Hon. Tribunal to the concerned Assessing Authority
for fresh disposal. The same is shown under note 14C(ii)
13. "The Company has hedged the interest rate on ECB of US$ 10 million
facility. The aggregate amount of loan covered under the said interest
rate swap as at March 31, 2014 is Rs.4958.09 Lakhs (US$ 7.50million).
The periodic net payments related to interest rate swap is recorded as
finanace cost & finance cost- pre-operative, since the few assets
purchased from such loan are pending for capatilization."
14. Capital advances includes a sum of Rs.366.88 lakhs P.Y 373.65
lakhs (reinstated value) paid to ISO Tech Design, Canada by the Company
towards supply of machinery for its Formulation project at Jadcherla.
Due to inordinate delay by vendor, the Company terminated its order and
has filed a law suit for recovery of its amount alongwith interest and
damages with the local courts in Canada. The preliminary hearing and
recovery proceeding are under process. As the outcome of the case
cannot be determined presently, the Company has not made any provision.
15. The Company had allotted 1764705 Equity shares on 15/05/2014 on
preferential basis. The same have been considered for the purpose of
computing Diluted EPS for the current year.
Mar 31, 2013
Basis of Preparation
The financial statements have been prepared to comply in all material
aspects with the mandatory Accounting Standards issued by the Institute
of Chartered Accountants of India and as notified under the Companies
(Accounting Standard) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The Company generally follows mercantile system of accounting and
recognizes all the income and expenditure on accrual basis.
The Accounting policies adopted in the presentation of financial
statements are consistent with those of previous year.
1 Contingent Liabilities
As at 31st As at 31st
Particulars March 2013 March 2012
a) Foreign letter of credit 1,304.13 952.16
b) Bank guarantees. / Corporate guarantee 10.90 11.54
c) Letter of comfort. Nil 683.40
d) Claims aginst the Company not
acknowledege as debts. 442.97 142.90
e) Estimate amount of contract remain
to be executed on account of 2,199.70 3,800.79
capital commitments not provided for
(net of advance)
TOTAL 3,957.71 5,590.80
2 Related Parties Disclosures Pursuant To Accounting Standard 18:
List of related parties
1. Associates
a) Reva Pharmachem Pvt Ltd
2. Subsidiaries
a) Zatortia Holdings Ltd
b) Loba Feinchemie Gmbh
c) Raichem Medicare Pvt Ltd
d) Nu- Therapeutics Pvt Limted Hyderabad
3. Key Management Personnel
a) Omprakash Inani
b) Vishnukanth .C. Bhutada
4. Relatives
a) Dharmavati Bhutada
b) Deepak Kumar Inani
3 During the year the Company has only one reportable segments viz.,
Bulk drug & Intermediates in accordance with the requirment of As-17
" Segment Reporting ". Hence Segment Reporting is not applicable to
the Company.
4 In the opinion of the Board, all assets other than fixed assets and
non current investments, have a realisable value in the ordinary course
of business which is not different from the amount at which it is
stated.
5 Balances of Trade receivables / Trade payables / Advances and
Security deposits are subject to balance confirmation.
6 The Company has not received any intimation from "Suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures relating to amount unpaid
as at the year end together with interest paid / payable under this act
cannot be ascertained.
7 The Company has exercised the option of capitalizing the exchange
difference arising on reporting of long term foreign currency monetary
item at rates difference from those at which they where initially
recorded , so far as they related to the acquisition of depreciable
capital assets as per para 46A to As-11" The effect of change in
Foreign Exchange Rates'' vide Notification No.GSR 914(E) dated 29th
December, 2011 issued by The Ministry of Corporate Affairs. In other
cases the difference has been accumulated in ''Foreign Monetary Item
Transsalation Difference A/c" to be amortized over the balance period
of such long term assets as per said notification.
By virtue of above the Company has capitalized Rs 116.84 lakhs (P.Y Rs.
274.72) lakhs to the Fixed Assets acquired out of such External
Commercial Borrowings (ECB)being the Exchange difference has been
accumulated in "Foreign Monetary Item Transalation Difference A/c",
being gain arises on account of reinstatment of investment in Wholly
Owned Foreign subsidiary.
8 As on 31.03.2013 demand from Income Tax Depertment on various issues
amounting to Rs. 420.57 lakhs are received based on the Judicial
pronouncement and legal advises; Company has contested the above
demands. Appeal filed against demand received for A.Y 2004-05 to
2007-08 have been disposed off in Company''s favour. However, the
effect of such order is yet to be given by the department.
9 The Net worth of Reva Pharmachem Pvt Ltd (Associate Company) as at
the Balance Sheet date has been completely eroded.
However, the management is of the view that since the Investments are
long term in nature no provision is required to be made.
10 An amount of Rs .23.28 lakhs paid in the year 2010-11 against the
disputed tax demand for which the Company had filed an appeal before
the relevant authroties. The case has been disposed off in Company''s
Favour. However, the appeal effect is yet to be given by the
department. The same is shown under note no.14.
11 Out of the sum of Rs 30.48 lakhs the Company had preferred an appeal
for refund of input tax paid on capital goods amounting to Rs.26.88
lakhs (PY: Rs.26.88) lakhs before the Hon.Tribunal under Karnataka
Value Added Tax Act, 2003,which has been remanded back by the Hon.
Tribunal to the concern Assessing authority for fresh disposal. The
same is shown as receivable under the head "VAT paid on Capital &
Other items".
12 Capital Advances includes a sum of Rs.373.64 lakhs paid to ISO Tech
Design, Canada by the Company towards supply of machinery for its
Formulation project at Jadcherla. Due to inordinate delay by vendor,
the Company has terminated its order and has filed a law suit for
recovery of its amount alongwith interest and damages with the local
courts in canada. The preliminary hearing and discovery proceeding are
under process. As the outcome of the case cannot be determined
presently the Company has not made any provision.
13 During the year ended March 31st 2013, the Company has entered into
floating to fixed interest swap to hedge the inter- est rate exposure
on utilisation of US$ 10 million External Commercial Borrowings
facility. The aggregate amount of loan covered under the said interest
rate swap as at March 31, 2013 is Rs. 5436.58 lakhs (US$ 10 million).
The periodic net payment related to interest rate swap recorded as
interest expenses under pre-operative expenses since the capital work
is under progress.
14 Previous years figures includes figure of Raichem Lifescience Pvt
Ltd on account of its Merger with Shilpa Medicare Ltd (SML) w.e.f.
01.04.2011, as per the order of Hon''ble High Court of Andhra Pradesh
Hyderabad .
Mar 31, 2012
Basis of Preparation
The financial statements have been prepared to comply in all material
aspects with the mandatory Accounting Standards issued by the Institute
of Chartered Accountants of India and as notified under the Companies
(Accounting Standard) Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The Company generally follows mercantile system of accounting and
recognizes all income and expenditure on accrual basis.
The Accounting policies adopted in the presentation of financial
statements are consistent with those of previous year.
1. Contingent Liabilities And Commitments
Particulars As at 31 March, 2012 As at 31 March, 2011
a) Local & Foreign
Letter of Credit 952.16 898.33
b) Bank Guarantees. 1.54 13.61
c) Letter of Comfort. 683.40 1,264.80
d) Claims aginst the Company
not acknowledeged as debts. 142.90 75.83
e) Corporate guarantee given
to Standard Chartered Bank 2,500.00 -
on behalf of Raichem Life
Sciences Pvt Limited
( Wholly Owned Subsidary Company)
f) Estimated amount of
contracts remained to be
executed 371.19 414.59
on capital account not
provided for (net of advance)
TOTAL 4,651.19 2,667.16
Actuarial gain / loss is recognised immediately. The estimates of
salary increase take into account inflation, promotion etc.
The Company has various schemes (funded/unfunded) for payment of
gratuity to all eligible employees calculated at specific no. of days
(ranging from 15 days to 1 month) of the last drawn salary depending
upon tenure of service for each year of completed service subject to
minimum of five years payable at the time of separation upon
superannuation or on exit otherwise.
2. During the year the Company has only one reportable segments viz.,
Bulk Drug & Intermediates in accordance with the requirment of AS-17
" Segment Reporting" . Hence Segment Reporting is not applicable to
the Company.
3. In the opinion of the Board, all assets other than fixed assets and
non current investments, have a realisable value in the ordinary course
of business which is not different from the amount at which it is
stated.
4. Balances of Trade Receivables/Trade payables/Advances and Security
deposits are subject to Balance Confirmation.
5. The Company has not received any intimation from "Suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures relating to amount unpaid
as at the year end together with interest paid/payable under this Act
cannot be ascertained.
6. The Company has exercised the option of capitalizing the exchange
differences arising on reporting of long-term foreign currency monetary
items at rates different from those at which they were initially
recorded, so far as they relate to the acquisition of depreciable
capital asset as per para 46A to AS-11 "The effects of changes in
Foreign Exchange Rates" vide notification No. GSR 914(E) dated 29th
December, 2011 issued by The Ministry of Corporate Affairs. In other
cases, the difference has been accumulated in "Foreign Monetary Item
Translation Difference A/c" to be amortized over the balance period
of such long term asset as per the said notification.
By virtue of above the Company has capitalized Rs.274.72,lakhs to the
Fixed Assets acquired out of such External Commercial Borrowings(ECB)
being the Exchange difference and has transferred Rs.260.68 Lakhs in
"Foreign Monetary Item Translation Difference A/c", being gain
arising on account of reinstatement of Investment in Wholly Owned
Foreign Subsidiary.
7. Income tax demand of Rs.120.50 Lakhs (PY: Rs.53.42 Lakhs )
pertaining to earlier years is contested in appeal as per the legal
advise based on certain Judicial pronouncements relating to identical
point of law, therefore no provision is made for such demand.
8. Net worth of Reva Pharmachem Pvt Ltd (Associate Company) as at the
Balance Sheet date has been completely eroded. However, the management
is of the view that since the Investments are long term in nature,
hence no provision is required to be made.
9. An amount of Rs.23.28 Lakhs (PY: Rs.23.28 Lakhs) is paid against
the disputed tax demand and the same is shown under note no.15.
10. The Company is in appeal before the Hon.Tribunal in respect of its
claim of Refund of Input Tax paid on Capital Goods amounting to
Rs.26.89 lakhs (PY: Rs.28.11 Lakhs) under Karnataka Value Added Tax
Act, 2003, the same is shown as receivable under the head "VAT
receivable on Capital Goods & Other items".
11. Previous Year Figures
Till the year ended 31st March 2011, the Company was using pre-revised
Schedule VI to the Companies Act 1956, for presentation of its
financial statements. For the year ended 31st March 2012, the revised
Schedule VI notified under the Companies Act 1956, has become
applicable to the Company. The Company has reclassified previous year
figures to conform to the current classification.
Mar 31, 2011
1. Previous year's figures have been regrouped, rearranged and / or
reworked wherever necessary.
2. Figures have been rounded off to the nearest rupee.
3. (a) Working Capital Loans from The Lakshmi Vilas Bank Ltd., is
secured by way of pari passu charge on Hypothecation of stock and book
debts and on the Fixed Assets of the Company.
(b) Working Capital Loans from Standard Chartered Bank is secured by fi
rst pari passu charge on Current Assets / Fixed Assets of the Company.
First charge on certain fixed assets of the Company (except those
created through other loans) in line with other working capital lender.
Personal guarantees of Directors in line with other working capital
lenders.
4. External Commercial Borrowing (ECB) from ICICI Bank Ltd is secured
by first charge on all movable and immovable properties created by
such loans and irrevocable guarantee of some of the Directors of the
Company.
5. In the opinion of the Management, the value of the Current Assets,
Loans and Advances under the ordinary course of business would at least
be equal to the amount as stated in the Balance Sheet.
6. The Company has granted the following advances to its wholly owned
Subsidiaries. However, there is no agreement as to the repayment of the
Loan.
7. Sundry Debtors, Sundry Creditors and Loans and Advances receivable
are subject to confirmation.
8. Amounts under the Head "Advance Taxes / TDS receivable" for
previous year has been netted against provision for taxes for the said
period.
9. The Company has not received any intimation from "suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 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. Exchange fluctuation includes credit of Rs. 725,000/- (PY: Credit
Rs. 43,575,000/-) on account of Exchange difference arising in respect
of outstanding ECB Loan. There are no other outstanding Forward
Exchange Contracts on 31.03.2011.
11. Income tax Demand of Rs. 5,342,960/- (PY: Nil) pertaining to
earlier year is contested in appeal and the Company is legally advised
based on certain Judicial pronouncements relating to identical point of
law and as such therefore no provision made.
12. During the year Net worth of Reva Pharmachem Pvt Ltd (Associate
Company) as at the Balance Sheet date has been completely eroded.
However, the management is of the view that since the Investments are
long term in nature no provision is required to be made.
13. An amount of Rs. 2,327,661/- is paid against the disputed Tax
demand as disclosed in Note No.12 of Schedule 17 (B) above and the same
is shown under the head "Advance tax / TDS Receivable".
14. The Company is in appeal before the Hon. Tribunal in respect of
its claim of Refund of Input tax paid on Capital Goods amounting to Rs.
2,997,868/- under Karnataka Value Added Tax Act, 2003, the same is
shown as receivable under the head "VAT paid on Capital & Other items"
Actuarial gain / loss is recognised immediately. The estimates of
salary increase take into account infl ation, promotion etc.
The Company has various schemes (funded/unfunded) for payment of
gratuity to all eligible employees calculated at 15 days of the last
drawn salary depending upon tenure of service for each year of
completed service subject to minimum of five years payable at the time
of superannuation or on exit otherwise.
15. Contingent Liabilities:
Particulars Current Year Previous Year
For Local and Foreign L/Cs 89,833,344 56,086,888
Guarantees 1,360,598 3,330,000
Bills discounted à 15,302,106
Letter of Comfort 126,480,000 121,120,000
Estimated amount of contracts remaining
to be executed on capital account and 41,458,818 19,172,443
not provided for (Net of advances)
Claim against the Company not
acknowledged as debts 7,582,960 2,340,000
(Includes amount disclosed in Note
No.12 or Schedule 17 (B)
Total 266,715,720 217,351,437
16. SEGMENT REPORTING:
During the year the Company has only one reportable segments viz., Bulk
Drugs & Intermediates in accordance with the requirements of AS-17
"Segment Reporting". Hence, segment reporting is not applicable to the
Company.
17. RELATED PARTIES DISCLOSURES PURSUANT TO ACCOUNTING STANDARD 18:
List of related parties
1. Associates
Reva Pharmachem Pvt Ltd
2. Subsidiaries
Zatortia Holdings Ltd
Raichem Lifesciences (P) Ltd
Loba Feinchemie GmbH
Raichem Medicare Pvt Ltd
3. Key Management Personnel (KMP)
Vishnukanth C. Bhutada
4. Relatives
Dharmavati Bhutada
Deepak Kumar Inani
Mar 31, 2010
1. Previous years figures have been regrouped, rearranged and / or
reworked wherever necessary.
2. Figures have been rounded off to the nearest rupee.
3. Working Capital Loans from The Lakshmi Vilas Bank Ltd., is secured
by hypothecation of stock and book debts and by charge on the Fixed
Assets of the Company.
4. Following term loans :
a) External Commercial Borrowing (ECB) from ICICI Bank Ltd is secured
by first charge on all movable and immovable properties created by such
loans and irrevocable guarantee of some of the Directors of the
Company.
b) Term Loan from Axis Bank is secured by First Pari passu charge on
all fixed assets of the Company and Collateral pari passu charge on the
current assets of the Company.
c) Term Loan from KSFC is secured by charge on assets of erstwhile
Shilpa Organics (P) Ltd.
5. In the opinion of the Management, the value of the Current Assets,
Loans and Advances under the ordinary course of business would at least
be equal to the amount as stated in the Balance Sheet.
6. Sundry Debtors and Sundry Creditors are subject to confirmation.
7. There are no delays in payments to Micro and Small Enterprises as
required to be disclosed under the Micro, Small and Medium Enterprises
Development Act, 2006. The Information regarding Micro and Small
enterprises has been determined to the extent such parties have been
identified on the basis of information available with the Company. This
has been relied upon by the auditors.
8. Exchange fluctuation includes credit of Rs. 435,75,000/- (PY:
Debit 108,460,000) on account of Exchange difference arising in respect
of outstanding ECB Loan and Debit/Credit Rs. Nil /-(PY: 4,310,195/-) in
respect of Loss / Profit arising from Forward Exchange Contracts for
the year. There are no other outstanding Forward Exchange Contracts on
31.03.2010.
The Company has various schemes (funded/unfunded) for payment of
gratuity to all eligible employees calculated at specific no. of days
(ranging from 15 days to 1 month) of the last drawn salary depending
upon tenure of service for each year of completed service subject to
minimum of five years payable at the time of separation upon
superannuation or on exit otherwise.
9 Contingent Liabilities:
Particulars Current Year Previous Year
For Local and Foreign L/Cs 56,086,888 53,009,622
Guarantees 3,330,000 1,804,000
Bills discounted 15,302,106 8,214,081
Letter of Comfort 121,120,000 202,440,000
Estimated amount of contracts
remaining to be executed on capital
account and not provided for
(Net of advances) 191,72,443 9,950,000
Claim against the Company not
acknowledged as debts 2,340,000 800,000
Total 217,351,437 276,217,703
10. RELATED PARTIES DISCLOSURES PURSUANT TO ACCOUNTING STANDARD
18: List of related parties
1. Associates 2. Subsidiaries
Bhakra Investments (P) Ltd Zatortia Holdings Ltd
Shilpa Finvest (P) Ltd Raichem Lifesciences (P) Ltd
Srinidhi Cottons (P) Ltd Loba Feinchemie Gmbh
Reva Pharma Chem Pvt Ltd
Raichem Medicare Pvt Ltd
3. Key Management Personnel 4. Relatives
Vishnukant C Bhutada Dharmavati Bhutada
Deepak Kumar Inani