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Notes to Accounts of Span Divergent Ltd.

Mar 31, 2015

1. Corporate Information

Span Diagnostics Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 2013. Its shares are listed on Bombay Stock Exchange in India. The Company was engaged in the business of manufacturing, marketing and trading of diagnostics reagents, diagnostics instruments and allied products till March 04, 2015. The Company has sold it's In-Vitro Diagnostics business on March 05, 2015. The Company is evaluating various business options for developing of new business line.

2.1 Of the above 3,638,000 Equity shares of Rs.10/- each have been allotted as fully paid-up bonus shares in year 2010-11 bycapitalizing Rs. 3,63,80,000 out of Securities premium.

2.2 There was no increase in Capital during the current year. However, during the year 2010-11,165,250 equity shares each of Rs. 10 were issued on a preferential basis by the company at a premium of Rs. 29.97 each aggregating to Rs. 6,605,042. Further 3,638,000 equity shares of Rs 10 each were issued in the year 2010-11 as bonus shares in ratio of 1:1 by capitalizing securities premium which in aggregate amounts to Rs 36,380,000.

3.1 Term Loan from banks other than Vehicle Loans were secured by hypothecation of plant and machineries, some of moveable properties of the company, equitable mortgage of some of the immovable properties of the company. Vehicle loans of Rs. NIL (Previous Year: Rs. 164,929) were secured by hypothecation of respective vehicles.

3.2 Term Loan from other parties and deferred payment liabilities were secured by hypothecation of moveable assets including Plant and Machinery and equipments which has been procured through utilization of earmarked funds and intangibles to be generated from projects.

3.3 Secured Loans were guaranteed by some of the Directors of the company & Mrs. Lata PDesai.

3.4 Deposits includes deposits from Related Parties of Rs. NIL (Previous year Rs. 4,040,000) (Refer Note 31) carrying rate of interest as per standard norms of deposits.

4.1 As per the information available with the Company, there is no amount outstanding to the parties covered under the provisions of Micro, Small and Medium Enterprises Development Act, 2006, hence, no disclosure is required under the said Act. The same has been relied upon by the auditors.

5.1 Land Cost includes Rs.950/- being the cost of 19 shares fully paid up of Rs.50/- each of Udhna Udyognagar Sahakari Sangh Ltd., Udhna.

5.2 Leasehold land cost includes cost of land allotted by G.I.D C. on lease. This lease is for 99 years and same is treated as perpetual lease hence no amortisation is done

5.3 In accordance with AS-16 relateo 'c. Borrowing costs which amounts to Rs. 1,71,142 has been capitalized during the year (Previous year Rs. 11,75,812).

5.4 The management of the Company has identified tangible fixed assets and their major components and has reviewed/determined their remaining useful lives. Accordingly, the depreciation on tangible fixed assets is provided for in accordance with the provisions of Schedule II to the Companies Act, 2013. In respect of assets where the remaining useful life is 'Nil', their carrying amount (net of tax effect) after retaining the residual value as on 1st April, 2014 as determined by the management has been adjusted against the opening balance of retained earnings Rs. 10,11,025 (Net of Tax) as on that date. Because of change in useful life as

6.1 EMPLOYEE BENEFITS

Disclosures pursuant to Accounting Standard - 15 (Revised)' Employee Benefits'

7 CONTINGENT LIABILITIES AND COMMITMENTS

A Contingent Liabilities

As at 31-03-2015 As at 31-03-2014 - Particulars

a) Taxes Rs. Rs.

(1) Sales tax

Demands under contest 837,838 837,838

C-Form Pending 3,940,707 3,091,000

(2) Income tax

Demands under dispute 21,607,889 21,607,889

b) Claims against the Company not acknowledged as Debts 2,542,704 2,542,704

c) On account of guarantees given by the bank on behalf of the company in favor of customs and others 19,281,311 53,878,577

d) The Company has imported material under the Advance Authorization Scheme of the Government of India, - 77,392 at concessional rates of customs duty by undertaking obligations to export certain quantity of specified products, For the future outstanding export obligations quantity under the Scheme as at 31-03-2014, which if not fulfilled may result in custom duty liability of

8 RELATED PARTY DISCLOSURES

Related party Disclosures as required by AS-18 are given below.

A: Relationship

(I) Related parties where control exists.

Span Biotronics Pvt. Ltd. (Subsidiary) (Upto March 04, 2015)

Span Diagnostics SA. (Pty.) Ltd. - (Subsidiary)

Span Nihon Kohden Diagnostics Pvt. Ltd. (Joint Venture)

(ii) Key Management Personnel:

Dr. Pradip K. Desai (Upto March 04, 2015) Mr. Veeral P. Desai

Ms. Sujata V. Desai (Upto March 04, 2015)

(iii) Relatives of key management personnel and their enterprise, where transactions have taken Place.

Ms. Lata P. Desai Ms. Tejal V. Desai Ms. Shital S. Kazi Mr. Prakash K. Desai Shri. Pradip. K. Desai HUF Dr. Harshad R. Gandhi Ms. Kokila H. Gandhi Dr. Udai D. Desai

Dr. Pradip K. Desai (From March 05, 2015)

Ms. Sujata V. Desai (From March 05, 2015)

(iv) Enterprise over which persons described in (ii). (iiil above is able to exercise significant influence.

Span Diagnostics SARL Quest Biochemicals Pvt. Ltd Desai Agri Bio-tech Pvt. Ltd Span Biotherapeutics Pvt Ltd

Note: Related party relationship on the basis of the requirements of Accounting Standard 18 as in 1 (i) to (iv) above is identified and certified by the Management and relied upon by the Auditors. ^

Disclosure in Respect of Material Related Party Transactions during the year:

a) Sales of goods and material includes sales to Span Biotronics Pvt. Ltd. Rs. NIL (Previous Year Rs. 344,400)

b) Purchase/ materials consumed from Span Nihon Kohden Diagnostics Pvt. Ltd.- NIL (Previous year-Rs.52,362) Span Diagnostics SARL Rs. 317,750 (Previous year- Rs. 177,200)

c) Payment to Key Management Personnel include to Dr.Pradeep K. Desai Rs. 6,039,104 ( Previous Year Rs.4,164,600), Shri Veeral P. Desai Rs.5,761,050 ( Previous Year Rs.4,278,800 ), Dr. Madhukanta T. Patel -NIL( Previous Year Rs.572,463 ), Ms. Sujata V. Desai Rs.4,119,259 (Precious Year Rs.3,233,600), Payment of appreciation to Sujata V. Desai Rs.700,000(Previous Year- Rs.NIL)

(Note : Amount mentioned here includes expesne related to Gratuity & Leave encashment. However, amount attributable to each Key Management Personnel is not available as provision for Gratuity & Leave Encashment is made based on Acturial Valuation.)

d) Interest on F.D./Loan includes Dr. M. T. Patel Rs.- NIL (Previous Year Rs.117,165), Mr.Veeral P. Desai Rs.34,116 (Previous Year Rs. 19,130), Dr.Pradeep K. Desai Rs. 89,228 (Previous Year Rs.97,315), Ms.Sujata V. Desai Rs.33,184 (Previous Year Rs.16,129 ), Mrs. Shital S. Kazi Rs.22,199 (Previous Year Rs.23,000 ), Mrs. Tejal V.Desai Rs.57,735 (Previous Year Rs.117,233 ), Dr.Harshad R.Gandhi Rs.101,515(Previous Year Rs. 103,024), Mrs.Kokila H. Gandhi Rs.129,659 (Previous Year Rs. 143,202), Shri Sunil T. Patel Rs.NIL(PreviousYear Rs.8,617), Desai Agri Bio-Tech Pvt.Ltd. Rs. 309,764(Previous Year Rs.234,312) Dr. Uday D Desai Rs.7479(Previous year- Rs.-NIL)

e) Rent paid to Mrs.Shital S.Kazi Rs. 44,516( Previous Year Rs.48,000), Mr. Veeral Desai- Rs.35,000(Previous year Rs.-NIL), Ms. Sujata Desai- Rs.35,000(PreviousyearRs.- NIL)

f) Dividend Paid to Dr.Pradeep K. Desai Rs.NIL( Previous Year Rs.653,440 ), Shri Veeral P. Desai Rs.NIL( Previous Year Rs.262,316), Dr.MadhubenT. Patel Rs.NIL( Previous Year Rs.26,080), Ms. Sujata V. Desai Rs.NIL( Previous Year Rs.50,788), Mrs. Lataben P. Desai Rs.NIL( Previous Year Rs.358,530), Mrs.Shital S. Kazi Rs.NIL( Previous Year Rs.19,750), Mrs.Tejal V. Desai Rs.NIL( Previous Year Rs.5,000), Shri Prakash K. Desai Rs.NIL( Previous Year Rs.13,500), Shri Sunil T. Patel Rs.NIL( Previous Year Rs.5,000), Mrs.Sudhaben I. Patel Rs.NIL( Previous Year Rs.5,000)

g) Gardening Expense paid to Desai Agri Bio-Tech Pvt. Ltd. Rs. 619,300 (Previous Year Rs.720,000).

h) Evaluation & Testing Charges paid to Quest Biochemicals Pvt. Ltd. Rs.30,000 (Previous Year Rs.262,000).

i) Sales and Distribution Expenses include amount Paid to Span Diagnostics SA. (Pty.) Ltd .Rs. 1,331,326 (Previous Year Rs.2,141,399).

j) Royalty paid to Span Diagnostics SARL Rs.1,712,738 (Previous Year Rs..1,232,220), Span Biotronics Pvt.Ltd Rs.401,687 (Previous Year Rs. .488,849)

k) License Fees from Span Nihon-Kohden Pvt. Ltd. Rs.1,777,903 (Previous Year Rs.2,190,000)

l) Other Income from Span Biotronics Pvt Ltd Rs.873,826 (Previous Year Rs.1,034,793),Span Diagnostics SA. (Pty.) Ltd. Rs.125,862(Previous Year Rs. 137,963), Dividend from Span Nihon Kohden Diagnostics Pvt. Ltd. Rs. NIL (Previous Year Rs 3,600,000), Dividend from Span Biotronics Pvt. Ltd. Rs.NIL (Previous Year Rs.340,411)

m) Deposits received includes from Shri Veeral P. Desai Rs.500,000 (Previous year-NIL) and Uday D. Desai Rs.2,000,000 (Previous year Rs. NIL)

n) Deposits repaid includes Mr. Veeral P. Desai Rs.1,000,000 (Previous Year Rs.NIL), Sujata V. Desai Rs.400,000 (Previous year Rs.NIL), Shital S. Kazi Rs.200,000 (Previous year Rs.NIL), Tejal V. Desai Rs.790,000 (Previous year Rs.NIL), Harshad .R. Gandhi Rs.900,000 (Previous year Rs.NIL) Kokila .H. Gandhi Rs.1,250,000 (Previous year Rs.NIL) Uday D. Desai Rs.2,000,000 (Previous Year Rs.NIL)

o) Loan & Advances in nature of expense reimbursement received during the year from Desai Agri Bio-Tech Pvt. Ltd. Rs.NIL (Previous Year Rs.3,400,000)

p) Loan & Advances in nature of expense reimbursement given during the year include Span Nihon-Kohden Pvt. Ltd. Rs. 167,287( Previous Year Rs. 120,447), Span Biotronics Pvt. Ltd. Rs.36,854( Previous Year Rs.930,204) Span Diagnostics SA Pty Rs.8481 (Previous year Rs.-NIL)

q) Loan received in the nature of fixed deposit from Dr.Pradeep K. Desai Rs.NIL ( Previous Year Rs.4,200,000), Shri Veeral P. Desai Rs.NIL( Previous Year Rs.500,000),Ms. Sujata V. Desai Rs.NIL( Previous Year Rs.300,000), Mrs. Tejal V. Desai Rs.NIL( Previous Year Rs.Nil), Dr. Harsad R. Gandhi Rs.NIL( Previous Year Rs.200,000), Mrs. Kokila H. Gandhi Rs.NIL( Previous Year Rs. 200,000)

r) Loans received included from Pradeep K. Desai Rs.702,000 (Previous Year Rs.-NIL) and Veeral P. Desai Rs.250,000(Previous year Rs.-NIL)

s) Loans and Advance repaid includes Pradeep K.Desai Rs.1,333,686 (Previous year Rs.NIL) and Veeral P. Desai Rs.250,000 (Previous Year Rs.NIL), Desai Agri Bio-tech Pvt. Ltd Rs.2,800,000 (Previous Year Rs.NIL)

t) Purchase of Technology include Span Biotronics Pvt Ltd Rs.12,866,001( Previous Year Rs.17,981,999), Span Diagnostics SARLRs. NIL (Previous Year Rs. .11,414,250)

u) Purchase of Investment includes Span SA(Pty,)Ltd.Rs.3172.18 (Previous year Rs.NIL)

v) Prepaid expense includes rent paid to Shri Veeral P. Desai Rs. 105,000 (Previous Year Rs.NIL), Sujata Desai Rs.105,000(Previous Year Rs.NIL)

9. The Company has given Rs. 2,520,000 as contribution to bonafide charitable institution. The Company has not obtained prior permission in the general meeting. The Company will obtain approval in the forth coming general meeting and will apply for the compounding of offence to appropriate authorities.

10. The figures for the previous year have been regrouped/recast wherever necessary in conformity with those of current year.


Mar 31, 2014

1. Corporate Information

Span Diagnostics Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, marketing and trading of diagnostics reagents, diagnostics instruments and allied products. The Company caters to both domestic and international markets. The Company also provides annual maintenance service for diagnostics instruments. It has various certifications like WHO-GMP, ISO 13485:2003 and ISO 9001:2000 and CE registration for almost 200 products thereby complying with globally accepted quality standards.

2. There was no increase in Capital during the current year. However, during the year 2010-11, 1,65,250 equity shares each of Rs. 10 were issued on a preferential basis by the company at a premium of Rs. 29.97 each aggregating to Rs. 66,05,042/-. Further 36,38,000 equity shares of Rs 10 each were issued in the year 2010-11 as bonus shares in ratio of 1:1 by capitalizing securities premium which in aggregate amounts to Rs. 3,63,80,000/-

3. Term Loan from banks other than Vehicle Loans are secured by hypothecation of plant and machineries, some of moveable properties of the company, equitable mortgage of some of the immovable properties of the company. Vehicle loans of Rs. 1,64,929 (Previous Year: Rs. 3,13,064) are secured by hypothecation of respective vehicles.

4. Term Loan from other parties and deferred payment liabilities are secured by hypothecation of moveable assets including Plant and Machinery and equipments which has been procured through utilization of earmarked funds and intangibles which will be generated from projects.

5. Secured Loans are guaranteed by some of the Directors of the company & Mrs. Lata P Desai.

6. Deposits includes deposits from Related Parties of Rs. 40,40,000 (Previous year Rs.89,53,000) (Refer Note 31) carrying rate of interest as per standard norms of deposits

7. Defined Benefit Plan

The Employee''s Group Gratuity Fund is the Company''s defined benefits plan for which the Company has taken Group Gratuity cum Life Insurance Policy from Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up final obligation.

8. Investment Details :

The company has contracted with Life Insurance Corporation of India (LIC) to manage gratuity liability of the company.

The Company makes the required contribution to LIC based on computation of current service cost, expected earnings and actuarial assumption etc. The Company has not made any other investment for defined benefit plan.

9. CONTINGENT LIABILITIES AND COMMITMENTS

A. Contingent Liabilities

As at As at Particulars 31-3-2014 31-3-2013 Rs. Rs.

a) Taxes

(1) Sales tax

Demands under contest (Net of Tax) 5,66,001 4,06,103

C-Form Pending (Net of Tax) 20,88,125 14,38,922

(2) Income tax

Demands under dispute 2,16,07,889 2,16,07,889

b) Claims against the Company not acknowledged as Debts 25,42,704 39,27,954

c) On account of guarantees given by the bank on behalf of the company in favor of 5,38,78,577 4,81,60,197 customs and others.

d) The Company has imported material under the Advance Authorization Scheme of the 52 282 49 315 Government of India, at concessional rates of customs duty by undertaking obligations to export certain quantity of specified products, For the future outstanding export obligations quantity under the Scheme as at 31-03-2014, which if not fulfilled may result in custom duty liability of (Net of tax)

B. Capital Commitments

As at As at Particulars 31-3-2014 31-3-2013 Rs. Rs.

Estimated amount of contracts (Net of advances) remaining to be executed on 2,58,58,513 48,07,753 Capital Account and not provided for

10. SEGMENT REPORTING

The company operates in a single segment - Diagnostic Products.

DISCLOSURE IN RESPECT OF MATERIAL RELATED PARTY TRANSACTIONS DURING THE YEAR :

a) Sales of goods and materials includes sales to Span Biotronics Pvt. Ltd. Rs.3,44,400 (Previous Year Rs NIL).

b) Purchase/ materials consumed from Span Nihon Kohden Diagnostics Pvt. Ltd. Rs.52,362 (Previous Year Rs.NIL),Span Diagnostics SARL Rs.1,77,200( Previous Year Rs 1,77,250),Quest Biochemicals Pvt. Ltd. Rs.Nil (Previous Year Rs 17,328).

c) Payment to Key Management Personnel include to Dr. Pradip K. Desai Rs. 41,64,600 (Previous Year 87,76,000 ), Mr. Veeral P Desai Rs.42,78,800 (Previous Year Rs.44,03,800), Dr. Madhukanta T. Patel Rs.5,72,463 (Previous Year Rs.23,52,350), Ms. Sujata V. Desai Rs.32,33,600 (Precious Year Rs.35,18,524).

d) Interest on F.D./Loan includes Dr. M. T. Patel Rs. 1,17,165 (Previous Year Rs.3,85,975), Mr. Veeral P Desai Rs. 19,130 (Previous Year Rs. NIL), Dr. Pradip K. Desai Rs. 97,315 (Previous Year Rs. NIL), Ms.Sujata V. Desai Rs. 16,129 (Previous Year Rs.11,000), Ms. Shital S. Kazi Rs.23,000 (Previous Year Rs.23,000), Ms. Tejal V.Desai Rs.1,17,233 (Previous Year Rs.2,84,861), Dr. Harshad R.Gandhi Rs.1,03,024 (Previous Year Rs. 78,742), Ms. Kokila H. Gandhi Rs.1,43,202 (Previous Year Rs.1,18,921), Mr. Sunil T. Patel Rs. 8,617 (Previous Year Rs.32,942), Desai Agri Bio-Tech Pvt.Ltd. Rs.2,34,312 (Previous Year Rs.2,09,458).

e) Rent paid to Ms.Shital S.Kazi Rs. 48,000 (Previous Year Rs.NIL ), Ms. Bhanuben T. Patel Rs.24,000 (Previous Year Rs.87,000), Ms.Sudhaben I. Patel Rs. 33,000 (Previous Year Rs. 1,32,000).

f) Dividend Paid to Dr. Pradip K. Desai Rs. 6,53,440 (Previous Year Rs.NIL), Mr. Veeral P Desai Rs. 2,62,316 (Previous Year Rs.NIL), Dr. Madhuben T. Patel Rs.26,080 (Previous Year Rs.NIL), Ms. Sujata V. Desai Rs. 50,788 (Previous Year Rs.NIL), Ms. Lataben P Desai Rs. 3,58,530 (Previous Year Rs.NIL), Ms.Shital S. Kazi Rs.19,750 (Previous Year Rs.NIL), Ms.Tejal V. Desai Rs.5,000 (Previous Year Rs.NIL), Mr. Prakash K. Desai Rs.13,500 (Previous Year Rs.NIL), Mr. Sunil T. Patel Rs.5,000 (Previous Year Rs.NIL), Ms.Sudhaben I. Patel Rs.5,000 (Previous Year Rs.NIL).

g) Gardening Expense paid to Desai Agri Bio-Tech Pvt. Ltd. Rs. 7,20,000 (Previous Year Rs. 7,20,000).

h) Evaluation & Testing Charges paid to Quest Biochemicals Pvt. Ltd. Rs. 2,62,000 (Previous Year Rs NIL).

i) Sales and Distribution Expenses include amount Paid to Span Diagnostics SA. (Pty.) Ltd. Rs. 21,41,399 (Previous Year Rs.23,89,935).

j) Royalty paid to Span Diagnostics SARL Rs. 12,32,220 (Previous Year Rs. 13,22,096), Span Biotronics Pvt.Ltd Rs. 4,88,849 (Previous Year Rs. 44,370).

k) License Fees from Span Nihon-Kohden Pvt. Ltd. Rs.21,90,000 (Previous Year Rs. 21,90,000).

l) Other Income from Span Biotronics Pvt Ltd Rs. 10,34,793 (Previous Year Rs.11,53,566),Span Diagnostics SA. (Pty.) Ltd. Rs. 1,37,963 (Previous Year Rs.62,061), Dividend from Span Nihon Kohden Diagnostics Pvt. Ltd. Rs.36,00,000 (Previous Year Rs. 36,00,000), Dividend from Span Biotronics Pvt. Ltd. Rs.3,40,411 (Previous Year Nil).

m) Loan received in the nature of fixed deposit from Dr. Pradip K. Desai Rs.42,00,000 (Previous Year Rs.NIL), Mr. Veeral P Desai Rs.5,00,000 (Previous Year Rs.NIL), Dr. M.T.Patel Rs. Nil (Previous Year Rs. 8,00,000), Ms. Sujata V. Desai Rs.3,00,000 (Previous Year Rs.NIL), Ms. Tejal V. Desai Rs. Nil (Previous Year Rs.13,00,000), Dr. Harsad R. Gandhi Rs.2,00,000 (Previous Year Rs.NIL), Ms. Kokila H. Gandhi Rs. 2,00,000 (Previous Year Rs.NIL).

n) Loan & Advances in nature of expense reimbursement received during the year include Span Nihon-Kohden Pvt. Ltd. Rs.NIL (Previous Year Rs.1,53,441), loan received from Desai Agri Bio-Tech Pvt. Ltd. Rs.34,00,000 (Previous Year Rs.23,00,000).

o) Loan & Advances in nature of expense reimbursement given during the year include Span Nihon-Kohden Pvt. Ltd. Rs.1,20,447 (Previous Year Rs.1,25,639), Span Biotronics Pvt. Ltd. Rs. 9,30,204 (Previous Year Rs.41,50,567),Span Diagnostics SA. (Pty.) Ltd. Rs. Nil (Previous Year Rs.14,33,697),Quest Biochemicals Pvt. Ltd. Rs.Nil (Previous Year Rs 4,438).

p) Purchase of Technology include Span Biotronics Pvt Ltd Rs. 1,79,81,999 (Previous Year Rs.1,76,11,998), Span Diagnostics SARL Rs.1,14,14,250 (Previous Year Rs. 2,01,69,576).

q) Purchase of assets include Span Diagnostics SARL Rs.Nil (Previous Year Rs.7,76,719).

r) Preference Shares redeemed by Span Biotronics Pvt. Ltd. Rs. 5,00,000.

11. FINANCIAL AND DERIVATIVE INSTRUMENTS

Derivative contracts entered into by the Company and outstanding as on March 31,2014

(i) For hedging interest rate related risks derivative contract in nature of forward contract is entered into by the Company and outstanding of which as on March 31,2014 amount to Rs.Nil (Previous Year Rs. 1,09,84,334).

(ii) Foreign currency exposures on account of trade receivables/ trade payables not hedged by derivative instruments .

12. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

13. NOTES ON DISCONTINUING OPERATION

During the year, the Company has entered into an agreement for transfer of business undertaking with the Arkray Healthcare Pvt Ltd (Purchaser) on January 24, 2014. The agreement was subject to shareholders'' approval along with compliance of certain conditions precedent prescribed in the agreement. One of the conditions was to obtain FIPB approval for the aforesaid transaction, which is critical event and non receipt of approval will make this agreement terminated. In light of the above information, management is of the view that although initial disclosure event in terms of Accounting Standard (AS) 24 - Discontinuing Operations has triggered, however bifurcation of assets and liabilities in to current and non current in the financial statements will be made considering its original realisation / settlement. As Mr. Veeral P. Desai, a promoter of the company will continue as Managing Director of the company and going forward, the company intends to utilize his expertise in carefully identified non-competing business areas, providing ample opportunities and handsome returns to share holder investments. In due course, the board shall also take up for consideration the potential use of the amount that would be received pursuant to the completion of the proposed transaction and finalisation of the consideration including the investment of such proceed in various new lines of business.

14. The figures for the previous year have been regrouped/recast wherever necessary in conformity with those of current year.


Mar 31, 2013

1. Corporate Information :

Span Diagnostics Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, marketing and trading of diagnostics reagents, diagnostics instruments and allied products. The Company caters to both domestic and international markets. The Company also provides annual maintenance service for diagnostics instruments. It has various certifications like WHO-GMP, ISO 13485:2003 and ISO 9001:2000 and CE registration for almost 200 products thereby complying with globally accepted quality standards.

2.1 There was no increase in Capital During the current year. However, during the year 2010-11, 165,250 equity shares each of Rs. 10 were issued on a preferential basis by the company at a premium of Rs. 29.97 each aggregating to Rs. 6,605,042/-. Further 3,638,000 equity shares of Rs. 10 each were issued in the year 2010-11 as bonus shares in ratio of 1:1 by capitalising securities premium which in aggregate amounts to Rs. 36,380,000/-

3.1 Term Loan from banks other than Vehicle Loans are secured by hypothecation of plant and machineries, some of moveable properties of the company, equitable mortgage of some of the immovable properties of the company. Vehicle loans of Rs. 313,064 (Previous Year: Rs. 682,589) are secured by hypothecation of respective vehicles.

3.2 Term Loan from other parties and deferred payment liabilities are secured by hypothecation of moveable assets including Plant and Machinery and equipments which has been procured though utilization of earmarked funds and intangibles which will be generated from projects.

3.3 Secured Loans are guaranteed by some of the Directors of the company.

3.4 Deposits includes deposits from Related Parties of Rs. 89,53,000 (Previous year Rs.71,90,000) (Refer Note 32) carrying rate of interest as per standard norms of deposits.

4.1 Working Capital Loan are secured by hypothecation of Current Assets and collaterally secured by the personal guarantees of promoter Directors, equitable mortgage of some of the immovable properties of the Company . The Interest rate in INR portion varies from 13.5% to 14.5%. Short Term Loan from Related Party is at 12%.

5 EXCEPTIONAL ITEMS

In current year there are no exceptional items. However in previous year,considering overall strategy of the Company and to focus on core diagnostic reagent manufacturing business of the Company and to obtain optimum price, the Company decided to hive off its Hematology business by way of business asset transfer including inventory, goodwill, etc. to M/s. Nihon Kohden India Private Limited, a subsidiary of Nihon Kohden Corporation, Japan subject to terms and condition mutually decided and as set out in the agreement. The Company has recorded Rs 29,072,127 in previous year on account of transfer of goodwill in light of this transactions.

6 SEGMENT REPORTING

The company operates in a single segment – Diagnostic Products.

7 RELATED PARTY DISCLOSURES

Related party Disclosures as required by AS-18 are given below.

A. Relationship.

(i) Related parties where control exists :

Span Biotherapeutics Pvt Ltd (Subsidiary)

Span Biotronics Pvt. Ltd. (Subsidiary)

Span Nihon Kohden Diagnostics Pvt. Ltd. (Joint Venture)

Span Diagnostics SA (Pty.) Ltd. - (Joint Venture)

(ii) Key Management Personnel :

Dr. Pradip K.Desai Mr. Veeral P. Desai Ms. Sujata V. Desai Dr. Madhukanta T. Patel

(iii) Relatives of key management personnel and their enterprise, where transactions have taken place :

Ms. Lata P. Desai

Ms. Tejal V. Desai

Ms. Shital S. Kazi

Mr. Prakash K. Desai

Shri. Pradip. K. Desai HUF

Dr. Harshad R. Gandhi

Ms. Kokila H. Gandhi

Mr. Sunil T. Patel

Ms. Bhanuben T. Patel

Ms. Sudhaben I. Patel

(iv) Enterprise over which persons described in (ii), (iii) above is able to exercise significant influence :

Span Diagnostics SARL Quest Biochemicals Pvt. Ltd Desai Agri Bio-tech Pvt. Ltd Note : Related party relationship on the basis of the requirements of Accounting Standard (AS) 18 as in 1 (i) to (iv) above is identified and certified by the Management and relied upon by the Auditors.

8 FINANCIAL AND DERIVATIVE INSTRUMENTS

Derivative contracts entered into by the Company and outstanding as on March 31, 2013 (i) For hedging interest rate related risks derivative contract in nature of forward contract is entered into by the Company and outstanding of which as on March 31, 2013 amount to Rs. 10,984,334 (Previous Year Rs. 110,180,885). (ii) Foreign currency exposures that are not hedged by derivative instruments as on March 31, 2013 amount to Rs 25,641,742 (net) (Previous Year Rs.22,589,704).

9 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated February 8 2011 and February 21, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

10 The figures for the previous year have been regrouped/recast wherever necessary in conformity with those of current year.


Mar 31, 2011

A.Contingent Liabilities not provided 31-3-2011 31-3-2010 for in respect of Rs. Rs.

1.Sales tax: Demands under contest(Net of Tax) 401,459 396,815 C-Form Pending 1,144,652 544,000

2.Disputed Liquidated Damages with 1,232,982 422,813 respect to institutional customers (Net of Tax)

3.Excise Demand under dispute Nil 83,280

4.Claims against the Company not 6,196,668 6,205,418 acknowledged as Debts

5.On account of guarantees given 29,728,407 31,933,107 by the bank on behalf of the company in favor of customs and others.

6.The Company has imported capital 438,656 297,699 goods under the Export Promotion Capital Goods Scheme of the Government of India at concessional rates of customs duty by undertaking obligations to export, Future outstanding export obligations under the Scheme as on 31-03-2011 aggregating of US$ 91582 if not fulfilled may result in custom duty liability of (Net of tax)

7.The Company has imported material 919,218 11,656,611 under the Advance Authorization Scheme of the Government of India, at concessional rates of customs duty by undertaking obligations to export certain quantity of specified products, For the future outstanding export obligations quantity under the Scheme as at 31-03-2011, which if not fulfilled may result in custom duty liability of (Net of tax)

C. Employee Benefits

Disclosures pursuant to Accounting Standard - 15 (Revised)' Employee Benefits':

Defined Benefit Plan

The Employees' Group Gratuity Fund is the Company's defined benefits plan for which Company has taken Group Gratuity cum Life Insurance Policy from Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

v) Investment Details

The company has contracted with Life Insurance Corporation of India (LIC) to manage gratuity liability of the company. The Company makes the required contribution to LIC based on computation of current service cost, expected earnings and actuarial assumptions etc. The Company has not made any other investment for defined benefit plan.

F. Expenditure on Research and Development

Research and development expenditure of Rs. 19,230,425 is recognized as revenue expenses during the year.(Previous year Rs.20,236,200)

G. Increase in Equity Share Capital

During the year, 165,250 equity shares each of Rs. 10 were issued on a preferential basis by the company at a premium of Rs. 29.97 each aggregating to Rs. 6,605,042/-. Further 3,638,000 equity shares of Rs 10 were issued as bonus shares in ratio of 1:1 by capitalizing share premium which in aggregate amounts to Rs 36,380,000.

H. Lease

i) The Company does not have financial lease arrangement.

I. Segment reporting

The company operates in a single segment- Diagnostic Products.

J. Related party disclosures

Related party Disclosures as required by AS-18 are given below.

1 Relationship.

(i) Other Related parties where common control exists.

Span Biotherapeutics Pvt Ltd (Subsidiary) Span Biotronics Pvt. Ltd.(Subsidiary) Span Nihon Kohden Diagnostics Pvt. Ltd. (Joint Venture)

(ii) Key Management Personnel:

Dr. Pradip K.Desai Mr. VeeralP Desai Ms.SujataV. Desai Dr. Madhukanta T. Patel

(iii) Relatives of key management personnel and their enterprise, where transactions have taken place.

Ms. Lata P. Desai Ms. Tejal V. Desai Ms.Shital S.Kazi Mr. Prakash K. Desai Shri. Pradip. K. Desai HUF Dr.Harshad R. Gandhi Ms. Kokila H. Gandhi Mr. SunilT. Patel Ms. Bhanuben T. Patel Ms. Sudhaben I. Patel

(iv) Enterprise over which persons described in (ii). (iii) above is able to exercise significant influence.

Span Diagnostics SARL Quest Biochemicals Pvt. Ltd

Note: Related party relationship on the basis of the requirements of Accounting Standard (AS) 18 as in 1 (i) to (iv) above is identified and certified by the Management and relied upon by the Auditors.



Disclosure in Respect of Material Related Party Transactions during the year:

1. Sales of goods and material includes Span Diagnostic FZC Rs NIL (Previous Year Rs. 1,741,356), Span Nihon-Kohden Diagnostics Pvt. Ltd. Rs. NIL (Previous Year Rs. 403,419), Span Diagnostics SARLRs. 881,575 (Previous Year NIL).

2. Purchases/material consumed from Span Nihon-Kohden Diagnostics Pvt. Ltd. Rs. 59,475,754 (Previous Year Rs.44,555,825), Span Diagnostics SARL Rs. 189,745 (Previous Year NIL)

3. Payment to Key Management Personnel include to Dr. Pradip K. Desai Rs. 6,830,600 (Previous Year 7,220,600), Mr. Veeral P. Desai Rs. 4,403,800 (Previous Year Rs. 4,477,550 ), Dr. Madhukanta T. Patel Rs. 2,356,567 (Previous Year Rs.1,883,600), Ms. SujataV. Desai Rs. 2,319,950 (Precious Year Rs.1,971,888)

4. Interest on F.D./Loan includes Dr. Madhukanta T. Patel Rs. 228,048 (Previous Year Rs.92,064), Ms.Sujata V. Desai Rs. 6,419 (Previous Year Rs. 11,109), Dr. Pradip K. Desai Rs. NIL (Previous Year Rs.75,455), Mr. Veeral P. Desai Rs. NIL (Previous Year Rs.21,528), Ms. Lata P. Desai NIL (Previous Year Rs. 9,615), Ms. Shital S. Kazi Rs. NIL (Previous Year Rs.68,356), Ms. Tejal V. Desai Rs. 3,315 (Previous Year Rs. 205,745), Shri Pradip K. Desai (HUF) Rs. NIL (Previous Year Rs. 44,267), Dr. Harshad R. Gandhi Rs. 77,927 (Previous Year Rs. 75,214), Ms. Kokila H. Gnadhi Rs. 116,427 (Previous Year Rs. 112,794), Mr. SunilT. Patel Rs. 32,058 (Previous Year Rs. 31,902)

5. Rent paid to Mr. Veeral P. Desai Rs. 24,000 (Previous Year Rs. 22,000), Ms. Bhanuben T. Patel Rs. 60,000 (Previous Year Rs. 60,000), Ms.Sudhaben I. Patel Rs. 112,000 (Previous Year Rs. NIL)

6. Dividend Paid to Dr. Pradip K. Desai Rs. 651,975 (Previous Year Rs. NIL), Mr. Veeral P. Desai Rs. 655,790 (Previous Year Rs. NIL), Dr. Madhukanta T. Patel Rs. 69,950 (Previous Year Rs. NIL), Ms. Sujata V. Desai Rs. 126,970 (Previous Year Rs. NIL), Ms. Lata P. Desai Rs. 896,325 (Previous Year Rs. NIL), Ms. Shital S. Kazi Rs. 49375 (Previous Year Rs.NIL), Ms.Tejal V. Desai Rs.12,500 (Previous Year Rs. NIL), Mr. Prakash K. Desai Rs. 33,750 (Previous Year Rs. NIL), Shri Pradip K. Desai (HUF) Rs. 981,625 (Previous Year Rs. NIL), Mr. Sunil T. Patel Rs. 12,500 (Previous Year Rs. NIL), Ms. Sudhaben I. Patel Rs.12,500 (Previous Year Rs. NIL)

7. R&D Outsourcing Charges paid to Span Biotronics Pvt. Ltd. Rs. 9,140,000 (Previous Year Rs. 7,100,000)

8. Gardening Expense paid to Desai Agri Biotech Rs. 611,797 (Previous Year Rs. 611,362)

9. Sales and Distribution Expenses include to Span Diagnostics FZC Rs. NIL (Previous Year Rs. 1,007,203)

10. Royaltypaidto Span Diagnostics SARLRs. 1,154,651 (Previous Year Rs.NIL)

11. License Fees from Span Nihon-Kohden Pvt. Ltd. Rs.2,190,000 (Previous Year Rs.21,90,000)

12. Other Income from Span Diagnostics SARL Rs. NIL (Previous Year Rs.668,300), Span Diagnostics FZC Rs. NIL (Previous Year Rs.18,016)

13. Loan received in the nature of fixed deposit from Span Nihon-Kohden Pvt. Ltd. Rs. NIL (Previous Year Rs.3,000,000), Dr. Madhukanta T. Patel Rs. 800,000 (Previous Year Rs. NIL), Ms. Sujata V. Desai Rs. 100,000 (Previous Year Rs. NIL), Ms. Tejal V. Desai Rs. 250,000 (Previous Year Rs. NIL), Dr. Harshad R. Gnadhi Rs. NIL (Previous Year Rs.150,000), Ms. Kokila H. Gandhi Rs. NIL (Previous Year Rs. 200,000)

14. Loan & Advances in nature of expense reimbursement given during the year include Span Nihon-Kohden Pvt. Ltd. Rs.106,465 (Previous Year Rs.1,036,551), Span Biotherapeutics Pvt. Ltd. Rs. 6,038 (Previous Year Rs. NIL), Span Diagnostics SARL Rs. NIL (Previous Year Rs. 209,250), Span Biotronics Pvt. Ltd. Rs. 4,144 (Previous Rs. 100)

15. Purchase of Technology include Span Daignostics SARLRs. NIL(PreviousYearRs. 2,961,198)

16. Purchase of Fixed Assets include Span Daignostics SARL Rs. NIL (Previous Year Rs. 941,695)

17. Purchase of Investment include Span Biotherapeutics Pvt. Ltd. Rs. 99,900 (Previous Year Rs. NIL)

18. Loss on Sale of Investment Include Span Diagnostics FZC Rs. NIL (Previous Year Rs. 756,821)

K. Disclosure of Loans and Advances to Subsidiaries. Associates. Joint Ventures and Others (Pursuant to Clause 32 of the Listing Agreement):

During the year the Company has not entered into any transaction in nature of loans and advances which falls within the purview of clause 32 of the listing agreement

P. Exchange Rate Difference

The Exchange rate difference arising on foreign currency transactions has been credited to Profit and Loss account Rs. 787,520 (Profit) [Previous Year 6,151,205 (Profit)].

Q. Disclosure for Borrowing Cost Capitalized

In accordance with AS-16 related to Borrowing cost which amounts to Rs. 581,322 has been capitalized during the year (Previous Year Rs. 80,780)

S. Balances of sundry debtors are as per books of accounts. During the year Company has written off debtors to tune of Rs 10,45,012 (Previous Year 1,657,456) against provision made in earlier years as are considered non-recoverable.

T. The figures for the previous year have been regrouped/recast/reclassified wherever necessary in conformity with those of current year.

d) Derivative contracts entered into by the Company and outstanding as on 31st March, 2011

(i) For hedging interest rate related risks derivative contract in nature of forward contract is entered into by the Company and outstanding of which as on 31st March,2011amounttoRs 109,995,200 (ii) Foreign currency exposures that are not hedged by derivative instruments as on 31st March,2011 amount to Rs.18,550,313(net)

h) Quantitative Details (Manufacturing)

NOTES : 1. Licenced Capacity : As per Industrial Enterpreneur Memorandum filed with Government of India. In respect of the products presently manufactured by the company.

2. Sales are shown after discount and sales return. 3. Materials produced for captive use excluded from sales. 4. Previous year figures are shown in brackets. 5. Annual Installed capacity being a techincal matter, it is as certified by the production manager and accepted by the auditors.


Mar 31, 2010

A. Contingent Liabilities not provided for in respect of

31-3-2010 31-3-2009 Rs. Rs.

1 Sales tax:

Demands under contest (Net of Tax) 396,815 1,820,040 C-Form Pending (Net of Tax) 544,000 167,000

2 Disputed Liquidated Damages with respect to institutional customers (Net of Tax) 422,813 Nil

3 Excise Demand under dispute (Net of Tax) 83,280 83,280

4 Claims against the Company not acknowledged as Debts 6,205,418 6,335,500

5 On account of guarantees given by the bank on behalf of the company in favour 31,933,107 22,344,425 of customs and others.

6 The Company has imported capital goods under the Export Promotion Capital 297,699 428,741 Goods Scheme of the Government of India at concessional rates of customs duty by undertaking obligations to export. Future outstanding export obligations under the Scheme as on 31-03-2010 aggregating of USD 76,944.10 if not fulfilled may result in custom duty liability of (Net of tax)

7 The Company has imported material under the Advance Authorization Scheme of the Government of India, at concessional rates of customs duty by 11,656,611 Nil undertaking obligations to export certain quantity of specified products. Future outstanding export obligations quantity under the Scheme as at 31-03-2010, which if not fulfilled may result in custom duty liability of (Net of tax)

C. Employee Benefits

Disclosures pursuant to Accounting Standard -15 (Revised) Employee Benefits:

Defined Benefit Plan

The Employees Group Gratuity Fund is the Companys defined benefits plan for which Company has taken Group Gratuity cum Life Insurance Policy from Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

v) Investment Details

The company has contracted with Life Insurance Corporation of India (LIC) to manage gratuity liability of the company. The Company makes the required contribution to LIC based on computation of current service cost, expected earnings and actuarial assumptions etc. The Company has not made any other investment for defined benefit plan.

F. Expenditure on Research and Development

Research and development expenditure of Rs. 205.16 Lacs is recognised as revenue expenses during the year.(PreviousyearRs.81.92Lacs.)

G. Increase in Equity Share Capital

During the year, 165,250 preferenceequity shares each of Rs. 10 were issued on a preferential basis by the company at a the premium of Rs. 29.97 each aggregating to Rs. 6,605,042/-. The same was utilized for funding the capital expenditure / strategic investment.

H. Impairment Loss

There was no impairment loss on Fixed Assets on the basis of review carried out by the Management in accordance with Accounting Standard 28 Impairment of Asset.

I. Segment reporting

The company operates in a single segment- Diagnostic Products.

K. Related party disclosures

Related party Disclosures as required by AS-18 are given below.

1 Relationship.

(i) Other Related parties where common control exists. Span Finstock Pvt.Ltd.

Quest Biochemicals Pvt. Ltd.

Span Diagnostics SARL

Span Diagnostics FZC

Span Biotronics Private Limited

Span Nihon Kohden

Diagnostics Pvt. Ltd.

(ii) Key Management Personnel:

Dr. Pradip. K.Desai

Mr. Veeral. P. Desai

Mrs.Sujata V.Desai

Miss Madhukanta T. Patel

(iii) Relatives of key management personnel and their enterprise, where transactions have taken place.

Mrs. Lata P. Desai

Mrs. Tejal V. Desai

Mrs. Shital S. Kazi

Shri. Pradip. K. Desai HUF

Dr. Harshad R. Gandhi

Mrs. Kokila H. Gandhi

Mr. SunilT. Patel

Smt. Bhanuben T. Patel

(iv) Enterprise over which persons described in (ii) above is able to exercise significant influence. Desai Metropolis Health Services Pvt. Ltd. Span Educational & Research Foundation

Note: Related party relationship on the basis of the requirements of Accounting Standard (AS) 18 as in 1 (i) to (iv) above is identified and certified by the Management and relied upon by the Auditors.

J. Exchange Rate Difference

The Exchange rate difference arising on foreign currency transactions has been credited to Profit and Loss account Rs. 61.51 Lacs (Profit) [Previous Year 106.78 Lacs (loss)].

K. Disclosure for Borrowing Costs capitalized

In accordance with AS-16 related to Borrowing costs which amounts to Rs.0.81 lacs has been capitalized during the year (Previous year Rs. 14.74 Lacs ).

 
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