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Notes to Accounts of Themis Medicare Ltd.

Mar 31, 2018

1 SHARE BASED PAYMENTS

(a) Employee option plan

The Company implemented Themes Medicare Employee Stock Option Scheme 2012 (herein after referred to as "Themes Medicare ESOS 2012" or "the Scheme") as approved by the Shareholders of the Company and the Nomination and Remuneration Committee of the Board of Directors.

The purpose of this Scheme is to promote the success of the Company and its subsidiaries and the interest of its shareholders by rewarding, attracting, motivating, and retaining Employees for high levels of individual performance, for efforts to improve the financial performance of the Company.

The Employee Stock Option Plan (ESOP) is designed to provide incentives to eligible employees to deliver long term returns. Under the plan, participants are granted options which vest upon completion of 1 year of service from the grant date. Participation in the plan is at the board''s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Once vested, the options remain exercisable for a period of 5 years. When exercisable, each option is convertible into one equity share.

*The amounts of Long term employee benefits cannot be separately identified from the composite amount advised by the actuary/value.

(v) Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. The Company has issued financial guarantees to the lender on behalf of its associate Company amounted to INR 250.00 Lakhs (March 31, 2017 : INR 250.00 Lakhs). For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amount owed by related parties (March 31, 2017: NIL). This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.

2. SEGMENT REPORTING

The company primarily operates in one business segment only i.e. Pharmaceuticals, which is the only reportable segment. There is no other segment which requires reporting as per In AS 108 "Operating Segments".

The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

The fair values of noncurrent borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

ii. Fair Value Hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are recognized and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:

There have been no transfers among Level 1, Level 2 and Level 3 during the period

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, mutual funds that have quoted price. The fair value of all equity instruments 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 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 are not based on observable market data, the instrument is included in level 3.

iii. Valuation technique used to determine fair value

Specific Valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis

The fair value of unquoted equity instruments and unquoted bonds is not significantly different from their carrying value and hence the management has considered their carrying amount as fair value.

iv. Valuation processes

The finance department of the company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and the audit committee (AC). Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the company''s quarterly reporting periods.

3. FINANCIAL RISK MANAGEMENT

The Company''s activity exposes it to market risk, liquidity risk and credit risk. Company''s overall risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the company. This note explains the sources of risk which the entity is exposed to and how the company manages the risk.

(A) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations leading to a financial loss. Credit risk arises from cash and cash equivalents, financial assets carried at amortized cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.

i. Credit risk management

Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

A default on a financial asset is when the counterparty fails to make contractual payments of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

ii. Provision for expected credit losses

The company follows ''simplified approach'' for recognition of loss allowance on Trade receivables.

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

(B) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. The Company consistently generated sufficient cash flows from operations to meet its financial obligations. Also, the Company has unutilized credit limits with banks. Management monitors rolling forecasts of the company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements.

Maturities of financial liabilities

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as commodity risk.

(i) Foreign currency risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the external commercial borrowings and export receivables.

The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies and standard operating procedures to mitigate the risks.

(ii) Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During March 31, 2018, March 31, 2017 and April 1, 2016, the company''s borrowings at variable rate were mainly denominated in USD. The company''s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in In AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market

(iii) Commodity Price risk

The Company''s operating activities involve purchase and sale of Active Pharmaceutical Ingredients (API), whose prices are exposed to the risk of fluctuation over short periods of time. Commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As of March 31, 2018, March 31, 2017 and April 1, 2016 the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

4. CAPITAL MANAGEMENT

For the purpose of the company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company includes within debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

*Amount includes due and unpaid of INR 122.69 Lakhs (March 31, 2017: INR 27.36 Lakhs)

The information has been given in respect of such vendors to the extent they could be identified as "Micro and Small" enterprises on the basis of information available with the Company.

5. DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCES

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 "The Effects of Changes in Foreign Exchange Rates", to allow companies deferral/capitalization of exchange differences arising on long-term foreign currency monetary items. In accordance with the amendment/earlier amendment to AS 11, the Company has capitalized exchange loss, arising on long-term foreign currency loan to the cost of plant and equipments.

6. STANDARDS ISSUED BUT NOT YET EFFECTIVE

Ind AS 115 - Revenue from Contracts with Customers

In AS 115 was issued in February 2016 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115 revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under In AS. This standard will come into force from accounting period commencing on or after April 1, 2018. The Company will adopt the new standard on the required effective date.

7. FIRST TIME ADOPTION OF IND AS

These are the company''s first financial statements prepared in accordance with In AS. The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening In AS balance sheet at April 1, 2016 (the Company''s date of transition). In preparing its opening In AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to In AS has affected the company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable In AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to In AS.

i. Deemed cost

In AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets covered by In AS 38 - Intangible Assets as recognized in the financial statements as at the date of transition to In AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value. except for land which are fair valued on the date of transition and used the fair value as deemed cost.

ii. Estimates

The estimates at April 1, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTPL - unquoted investments

- Impairment of financial assets based on expected credit loss model

The estimates used by the company to present these amounts in accordance with In AS reflect conditions at April 1, 2016, the date of transition to In AS and as of March 31, 2017.

iii. Investments in subsidiaries, joint ventures and associates

In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary, joint ventures or associate at cost , may measure such investment at cost (determined in accordance with In AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening In AS balance sheet.

Selection of fair value or previous GAAP carrying amount for determining deemed cost can be done for each subsidiary, associate and joint venture. The company elects to carry all its investments in subsidiaries, associates and joint ventures at previous GAAP carrying amount as deemed cost.

iv. Share based payment transactions

A first-time adopter is encouraged, but not required, to apply In AS 102 Share-based Payment to equity instruments that were vested on or before the date of transition to In AS. However, if a first-time adopter elects to apply In AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments determined at the measurement date as defined in In AS 102. If a first-time adopter modifies the terms or conditions of a grant of equity instruments to which In AS 102 has not been applied, the entity is also not required to apply In AS 102''s requirements for modifications of awards if the modification occurred before the date of transition to In AS.

Therefore, In AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 1, 2016. For cash-settled share-based payment transactions, the Company has not applied In AS 102 to liabilities that were settled before April 1, 2016.

vi. Impact of In AS adoption on the statements of cash flows for the year ended March 31, 2017

There are no material adjustments to the Statement of Cash flows as reported under the previous GAAP.

C. Notes to first-time adoption: Note 1: Property, Plant and Equipment

The company has elected to measure certain items of property, plant and equipment viz. Land at fair value at the date of transition to In AS. Hence at the date of transition to In AS, an increase of INR 4,077.85 Lakhs was recognized in property, plant and equipment. This amount has been recognized against retained earnings.

Note 8: Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and reliability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2017.

Note 9: Trade Receivables

Under Indian GAAP, the company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under In AS, impairment allowance has been determined based on Expected Loss model (ECL).

Note 10: Borrowings

In AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred.

Under the previous GAAP, below market rate borrowings from promoters are recorded at their transaction value. Under In AS, all financial liabilities are required to be recognized at fair value on initial recognition. Accordingly, the company has fair valued the below market rate borrowings and the difference between the fair value and transaction value has been recognized in retained earnings on the date of transition.

Note 11: Employee stock option expense

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognized using the intrinsic value method. Under In AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date.

Note 12: Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. In AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of In AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

Note 13: Remeasurements of post-employment benefit obligations

Under In AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Note 14: Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above In AS transition adjustments. Note 9: Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

Note 15: Financial Guarantees

Under In AS, financial guarantees issued by the Company to the lenders of an associate are initially recognized as a liability at fair value which is subsequently amortized as other income to the Statement of Profit and Loss. This transaction was not recorded under the previous GAAP.

Note 16: Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under In AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. There is no impact on the total equity and profit.


Mar 31, 2016

B) Remuneration and Compensation Committee granted 1,33,000 Options to 34 employees and 4 Directors on 31st July 2012 at Rs. 77.85 per option/share at the prevailing market price at the time of grant. As the grant of Options was done at market rate, the intrinsic value of this grant is NIL and therefore, there is no charge of Employee Compensation cost.

Some of the eligible employees exercised the grant of options and were allotted 46640 number of equity shares during the year 2015-16.

1. The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognize Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired up to 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) up to 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognized as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognized in the FCMITDA is to be amortized over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The said notification has been further amended by notification dated 29th Dec. 2011 allowing to recognize the Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities, as capital cost of acquisition of asset up to 31st March, 2020. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March, 2009. Accordingly, Foreign Exchange differences for Rs. 126.16 lacs has been adjusted against the cost of assets.

2. Disclosures as required by Accounting Standard 19, "Leases " are given below:

i) The Company has taken various residential , office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and license, or for longer period in respect of other leases and are renewable by mutual consent on agreeable terms. Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease rent paid by the Company are debited to the statement of Profit and Loss account under "Rent" in Note No. 3.7 of "Other Expenses".

iii) The future minimum lease payments under non-cancellable operating Lease NIL

3. During the year ended March 31, 2015 the Company had reviewed and reassessed useful lives of its tangible fixed assets on and from April 01, 2014. The revised useful lives of the assets as assessed by Management, match those specified in Part C of schedule II to the Companies Act, 2013, for most classes of assets, Management believes that the revised useful lives of the assets reflects the periods over which these assets are expected to be used. As a result of these changes, a sum of Rs.186.70 lacs being the carrying amount net of residual value of fixed assets where remaining life as at 1 April, 2014 is Nil had been charged to Retained earnings net of deferred tax Rs.57.69 lacs as permitted by the Schedule II. In other cases, carrying amount has been depreciated / amortized over the remaining useful life of the assets and the effect on profit is not material.

4. No provision for Taxation has been made in view of carry forward of losses and unabsorbed depreciation.

5. Previous year''s figures have been regrouped / rearranged wherever necessary to confirm to current year''s presentation.


Mar 31, 2015

1 The Company has given a Corporate Guarantee for Rs.250 lacs (Previous year 250 lacs ) on behalf of Long Island NutritionalsPvt. Ltd.-an associate company to Bank of Maharashtra to secure various loan granted to the said company.

2 Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs.266.37 Lacs (Previous year Rs.166.02 Lacs) Capital expenditure incurred during the year thereof amounts to nil, has been included in Fixed Assets. (Previous year nil).

3 The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made, as required by Accounting Standard 17 on "Segment Reporting".

4 Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/ Capital Work in Progress, as appropriate. Current year Nil. (Previous year Rs.23.55 Lacs).

5 Related Party Disclosures

A. Name of the related parties and nature of relationship

(a) Associate companies Themis Distributors Pvt. Ltd.

Vividh Distributors Pvt. Ltd.

Vividh Margi Investments Pvt. Ltd.

Long Island Nutritionals Pvt. Ltd.

Gujarat Themis Biosyn Ltd.

(b) Joint Venture Richter Themis Medicare (India) Pvt.Ltd.

(c) Subsidiary Themis Life Style Pvt Ltd.

Artemis Biotech Limited

HIDPUL-KFT, Hungary.

(d) Key Management personnel

Dr. D S. Patel(M.D&CEO)

Dr. Sachin D. Patel

(e) Directors/Relatives of Key Management personnel

Mrs. Jayshree D. Patel

Mrs. Meena A. Patel

Mrs Hemlata B.Patel

Mrs. Reena S. Patel

6 Deferred tax liability is provided by implementing Accounting Standard -22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006. The Deferred Tax Asset Rs.46.94 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.38.93 lacs Cr.); comprising Rs.14.36 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.6.30 lacs (Cr)), Rs.19.98 lacs (Cr.) towards Bonus (Previous Year Rs.20.03 lacs (Cr) and Rs.12.60 lacs (Cr.) towards provision of Gratuity (Previous Year assets Rs.12.60 lacs (Cr).

7 Employees Benefit:

A) Liability for Employee Benefit has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard -15 (Revised) the details of which are as under:

B) Remuneration and Compensation Committee granted 1,33,000 Options to 34 employees and 4 Directors on 31st July 2012 atRs.77.85 per option/share at the prevailing market price at the time of grant. As the grant of Options was done at market rate, the intrinsic value of this grant is NIL and therefore, there is no charge of Employee Compensation cost.

Some of the eligible employees exercise to grant of options and were alloted 8660 number of equity shares on 29.09.2014 and 9200 number of equity shares on 06.02.2015.

8 The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The said notification has been further amended by notification dated 29th Dec. 2011 allowing to recognise the Foreign Exchange Gains and Loses arising on translation of all long term monetary assets and liabilities, as capital cost of acquisition of asset upto 31st March, 2020. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March, 2009. Accordingly, Foreign Exchange differences for Rs.91.47 lacs has been adjusted against the cost of assets.

9 Disclosures as required by Accounting Standard 19, "Leases " are given below:

i) The Company has taken various residential, office and godown premises under operating lease or leave and licence agreements.These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and licence, or for longer period inrespect of other leases and are renewable by mutual consent on agreeable terms.Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease rent paid by the Company are debited to the statement of Profit and Loss account under "Rent" in Note No. 3.7 of "Other Expenses".

iii) The future minimum lease payments under non-cancellable operating Lease NIL

10 During the year ended March 31, 2015 the Company has reviewed and reassessed useful lives of its tangible fixed assets on and from April 01, 2014. The revised useful lives of the assets as assessed by Management, match those specified in Part C of schedule II to the Companies Act, 2013, for most classes of assets, Management believes that the revised useful lives of the assets reflects the periods over which these assets are expected to be used. As a result of these changes, a sum of Rs.186.70 lacs being the carrying amount net of residual value of fixed assets where remaining life as at 1 April, 2014 is Nil has been charged to Retained earnings net of deferred tax Rs.57.69 lacs as permitted by the Schedule II. In other cases, carrying amount has been depreciated / amortised over the remianing useful life of the assets and the effect on profit is not material.

11 No provision for Taxation has been made in view of carry forward of losses and unabsorbed depreciation.

12 Previous year's firgures have been regrouped / rearranged wherever necessary to conform to current year's presentation.


Mar 31, 2014

Terms / rights attached to shares

Equity Shares

The Company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

NOTE NO. 1

Other Notes forming Part of the Accounts

(Rs. in Lacs)

Contingent liabilities and commitments (to the extent not provided for) As At 31st As At 31st March, 2014 March, 2013

1. Contingent Liabilities

(a) Claims against the company not acknowledged as debt

(i) The Ministry of Chemicals & Fertilizers ,Government of India has raised demand under Drug Price Control Order,1979 for difference in actual price and price of respective bulk drug allowed while fixing the prices of certain life saving Formulations which are disputed by the Company. The Company has preferred Appeals before Hon''ble High Courts of Gujarat and Bombay in respect of Bulk Drug Rifampicin and Ethambutol respectively, for grant of ad interim stay. While allowing the stay, The Hon''ble High Court Gujarat directed the Company to deposit Principal Liability of Rs. 34.80 Lacs out of the total liability of Rs.126.08 Lacs as worked out by the Department of Chemicals & Fertlizers,Govt. of India .The Company has already complied with the directions of the H''norable Court. In respect of Liability for Bulk Drug Ethambutol, the H''norable Bombay High Court had directed the Company to submit Bank Guarantee of Principle amount with Court & stayed the matter. The Company has complied with the direction of the Honourable High Court. 333.33 333.33

(ii) Others 0.87 0.87

(b) Bank Guarantees 100.38 180.76

(c) Other money for which the company is contingently liable

(i) In respect of Letter of Credit 44.95 206.74

(ii) Disputed Income Tax and Sales Tax as matters are in appeal 24.29 24.29

(iii) Customs duty payable on raw materials imported under duty exemption scheme in case of non-fulfillment of export obligation. 201.06 166.56

Total (I) 704.89 912.56

2. The Company has given a Corporate Guarantee for Rs. 250 lacs (Previous year 250 lacs )on behalf of Long Island Nutritionals Pvt. Ltd. - an associate company to Bank of Maharashtra to secure various loan granted to the said company.

3. Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs.166.02 Lacs (Previous year Rs.202.04 Lacs) Capital expenditure incurred during the year thereof amounts to nil, has been included in Fixed Assets. (Previous year nil).

4. The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made,as required by Accounting Standard 17 on "Segment Reporting"

5. Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/ Capital Work in Progress, as appropriate. Current year Rs. 23.55 lacs (Previous year Rs.178.15 Lacs).

6. Deferred tax liability is provided by implementing Accounting Standard -22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006. The Deferred Tax Asset Rs.38.93 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.39.06 lacs Cr.); comprising Rs.6.30 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.6.30 lacs (Cr) ), Rs.20.03 lacs (Cr.) towards Bonus (Previous Year Rs 20.16 lacs (Cr) and Rs.12.60 lacs (Cr.) towards provision of Gratuity (Previous Year assets Rs. 12.60 lacs (Cr).

7. The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The said notification has been further amended by notification dated 29th Dec. 2011 allowing to recognise the Foreign Exchange Gains and Loses arising on translation of all long term monetary assets and liabilities, as capital cost of acquisition of asset upto 31st March, 2020. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March, 2009. Accordingly, Foreign Exchange differences for Rs. 232.73 lacs has been adjusted against the cost of assets/ CWIP.

8. Disclosures as required by Accounting Standard 19, "Leases" are given below:

i) The Company has taken various residential , office and godown premises under operating lease or leave and licence agreements.These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and licence, or for longer period inrespect of other leases and are renewable by mutual consent on agreeable terms.Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease rent paid by the Company are debited to the statement of Profit and Loss account under "Rent" in Note No. 3.7 of "Other Expenses".

iii) The future minimum lease payments under non-cancellable operating Lease NIL

9. Previous year''s firgures have been regrouped / rearranged wherever necessary to conform to current year''s presentation.


Mar 31, 2013

1 The Company has given a Corporate Guarantee for Rs. 250 lacs on behalf of Long Island Nutritionals Pvt. Ltd. - an associate company to Bank of Maharashtra to secure various loan granted to the said company.

2 Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs.202.04 Lacs (Previous year Rs.201.64 Lacs) Capital expenditure incurred during the year thereof amounts to nil, has been included in Fixed Assets. (Previous year Rs. 1.99 Lacs).

3 The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made,as required by Accounting Standard 17 on "Segment Reporting"

4 Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/ Capital Work in Progress, as appropriate.Current year Rs. 178.15 lacs (Previous year Rs.153.23 Lacs).

5 Related Party Disclosures

A. Name of the related parties and nature of relationship

(a) Associate companies Themis Distributors Pvt. Ltd.

Vividh Distributors Pvt. Ltd. Vividh Margi Investments Pvt. Ltd. Long Island Nutritionals Pvt. Ltd.

(b) Joint Venture Richter Themis Medicare (India) Pvt.Ltd.

(c) Key Management personnel Dr. D.S. Patel ( M.D & CEO )

Dr. Sachin D. Patel

(d) Directors/Relatives of Key

Management personnel Mrs. Jayashree D. Patel

Mrs. Meena A. Patel Mrs Hemlata B.Patel Mrs Margi R Choksy Mrs. Reena S. Patel

6 Deferred tax liability is provided by implementing Accounting Standard -22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006. The Deferred Tax Asset Rs.39.06 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.16.57 lacs Cr.); comprising Rs 6.30 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.1.53 lacs (Cr) ), Rs.20.16 lacs (Cr.) towards Bonus (Previous Year Rs 4.08 lacs (Cr) and Rs 12.60 lacs (Cr.) towards provision of Gratuity (Previous Year assets Rs. 7.38 lacs (Cr).

7 Details of Dues to Micro, Small and Medium Enterprises as per Micro,Small and Medium Enterprises Development Act,2006 (MSMED Act).

8 The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The said notification has been further amended by notification dated 29th Dec. 2011 allowing to recognise the Foreign Exchange Gains and Loses arising on translation of all long term monetary assets and liabilities, as capital cost of acquisition of asset upto 31st March, 2020. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March, 2009. Accordingly, Foreign Exchange differences for Rs. 232.73 lacs has been adjusted against the cost of assets/ CWIP.

9 Disclosures as required by Accounting Standard 19, "Leases " are given below:

i) The Company has taken various residential , office and godown premises under operating lease or leave and licence agreements.These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and licence, or for longer period inrespect of other leases and are renewable by mutual consent on agreeable terms.Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease rent paid by the Company are debited to the statement of Profit and Loss account under "Rent" in Note No. 3.7 of "Other Expenses".

iii) The future minimum lease payments under non-cancellable operating Lease NIL

10 Previous year''s firgures have been regrouped / rearranged wherever necessary to conform to current year''s presentation.


Mar 31, 2012

1) Buildings and Leasehold Land which were revalued are shown at" Book Value ".Other Fixed Assets appear at" COST "

2) Buildings include :

a ) Staff quarters of the value of Rs.259200 purchased by the Company from Gujarat Industrial Development Corporation under hire - purchase scheme for which title documents in favour of the Company are yet to be executed, b) Documents for go down premises purchased during the earlier year for a value of Rs. 6800758 have been lodged for registration with concerned authorities

3) Execution of conveyance and other documents in respect of Office Premises purchased for Rs.9100000 in an earlier year are yet pending.

The relevant expenses pertaining to the same will be accounted in the year of execution. Amount not ascertainable

4) Documents for Registration of Trade Marks of the value of Rs.27200 acquired in an earlier year have been submitted to concerned authorities for registering in Company's name

5) Execution of conveyance and other documents in respect of Training Centre premises at Goregaon purchased for Rs.10635000 in earlier year are yet pending. The relevant expenses pertaining to the same will be accounted in the year of execution. Amount not ascertainable

(Rs. in Lacs)

Contingent liabilities and commitments As At As At

(to the extent not provided for) 31st March, 31st March,

2012 2011

1 Contingent Liabilities

(a) Claims against the company not acknowledged as debt

(i) The Ministry of Chemicals & Fertilizers government of India has raised demand under Drug Price Control Order,1979 for difference in actual price and price of respective bulk drug allowed while fixing the prices of certain life saving Formulations which are disputed by the Company. The Company has preferred Appeals before Hon'ble High Courts of Gujarat and Bombay in respect of Bulk Drug Rifampicin and

Ethambuto! respectively, for grant of ad interim stay.

While allowing the stay, The Hon'ble High Court Gujarat directed the Company to deposit Principal Liability of Rs. 34.80 Lacs out

of the total liability of Rs.126.08 Lacs as worked out by the Department of Chemicals & Fertlizers,Govt. of India. The Company has already complied with the directions of the H'norable Court. In respect of Liability for Bulk Drug Ethambutol, the H'norable Bombay High Court had directed the Company to submit Bank Guarantee of Principle amount with Court & stayed the matter.

The Company has complied with the direction of the Honourable ;

High Court. 333.33 333.33

(ii) Others 0.87 0.87

(b) Bank Guarantees 205.64 181.14

(c) Other money for which the company is contingently liable

(i) In respect of Letter of Credit 26.38 660.87

(ii) Disputed Income Tax and Sales Tax as matters are in appeal 61.58 65.76

(iii) Customs duty payable on raw materials imported under duty exemption scheme in case of non-fulfillment of export obligation. 231.81 556.38

Total (I) 859.61 1,798.35

2 Commitments

(a) Estimated amount of contracts remaining to be executed on

capital account and not provided for 101.98

(b) Uncalled liability on shares and other investments partly paid NiL NIL

(c) Other commitments (specify nature)

(i) Liability on account of Custom duty on goods in bonded warehouse or in transit is ,as per the Company's practice charged to Profit & Loss Account only in the year in which the goods are cleared from the Custom. This accounting policy

has no effect on the Loss for the year. 22.25 36.16

(ii) Liability on account of Excise duty in respect of goods manufactured and liable to payment of Excise duty when cleared from the factory premises, is accounted at the time of removal of the

goods from the place of manufacture for sale or for captive use. .

This accounting policy has no effect on the Loss for the year. 2.98 16.85

TotaT (II) 25.23 154.99

Total (l ll) 884.84 1,953.34

3

i) In respect of Dr. Dinesh S. Patel MD and CEO, applications are made to the Central Govt, for approval of remuneration paid / payable to him in view of Loss in the year 2008-09 & consequently remuneration exceeded the limits prescribed under Schedule XIII. In view of carried forward Losses to 2009-10, the remuneration for the year exceeded limits as prescribed U/s.198 read with the applicable sections of Companies Act 1956 and hence apllications for Managing Director and Whole time Directors are made to Central Government for waiver of excess remuneration paid.

ii) Consequent to inadequacy of profits in the current year, remuneration paid to Managing Director and Whole-time Directors, is in excess of the limits specified in Section 198 read with Schedule XIII of the Companies Act, 1956. The excess remuneration drawn by the Directors amount to Rs.. 15.89 lacs. The Company is making an application to the Central Govt, for the waiver of the excess remuneration paid.

4 Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs.201.64 Lacs (Previous year Rs.283.92 Lacs) Capital expenditure incurred during the year thereof amounts to Rs.1.99 Lacs has been included in Fixed Assets. (Previous year Rs. 31.31 Lacs).

5 The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made,as required by Accounting Standard 17 on "Segment Reporting"

6 Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/ Capital Work in Progress, as appropriate.Current year Rs. 153.23 lacs (Previous year Rs.184.58 Lacs).

7 Deferred tax liability is provided by implementing Accounting Standard-22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006. The Deferred Tax Asset Rs.16.57 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.15.05 lacs Cr.); comprising Rs 1.53 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.7.50 lacs (Cr) ) and Rs.4.08 lacs (Cr.) towards Bonus (Previous Year Rs 18.88 lacs (Cr), Rs 7.38 lacs (Cr.) towards provision of Gratuity (Previous Year assets Rs. 11.47 lacs (Cr) and Rs. 3.58 lacs (Cr) depreciation (Previous Year Rs. 22.80 lacs (Dr.).

The above 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 The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The said notification has been further amended by notification dated 29th Dec. 2011 allowing to recognise the Foreign Exchange Gains and Loses arising on translation of all long term monetary assets and liabilities, as capital cost of acquisition of asset upto 31st March, 2020. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March, 2009. Accordingly, Foreign Exchange differences for Rs. 232.73 lacs has been adjusted against the cost of assets/ CWIR

9 Disclosures as required by Accounting Standard 19, "Leases " are given below:

i) The Company has taken various residential, office and go down premises under operating lease or leave and licence agreements. These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and licence, or for longer period in respect of other leases and are renewable by mutual consent on agreeable terms. Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease payments are recognised in the profit and Loss Account under "Rent" in Schedule.

iii) The future minimum lease payments under non-cancellable operating Lease NIL

10 The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Act. Consequent to the notification of Revised Schedule VI under the Act, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's period's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

Rupees in Lacs

Total As At Total As At 31/03/2011 31/03/2010

1 Contingent Liabilities not provided for:

a) In respect of Letter of Credit. 660.87 876.55

b) Disputed Income Tax, Sales Tax, as matters are in appeal. 65.76 86.11

c) Bank Guarantee 181.14 185.78

d) Custom duty payable on raw materials imported under duty exemption scheme in case of non-fulfillment of export obligation. 556.38 250.91

e) Claims against the Company not acknowledged as debts.

i)The Ministry of Chemicals & Fertilizers, Government of India has raised demand under Drug Price Control Order,1979 for difference in actual price and price of respective bulk drug allowed while fixing the prices of (certain life saving Formulations which are disputed by the Company. The Company has preferred Appeals before Honble High Courts of Gujarat and Bombay in respect of Bulk Drug Rifampicin and Ethambutol respectively for grant of ad interim stay. While allowing the stay The Honble High Court Gujarat directed the Company to deposit Principal Liability of Rs. 34.80 Lacs out of the total liability of Rs.126.08 Lacs as worked out by the Department of Chemicals & Fertlizers,Govt. of India .The Company has already complied with the directions of the Hnorable Court. In respect of Liability for Bulk Drug Ethambutol, the Hnorable Bombay High Court had directed the Company to submit Bank Guarantee of Principle amount with Court & stayed the matter. The Company has complied with the direction of the Honourable High Court. 333.33 333.33

ii) Others 0.87 0.87

6 Note : 1) In respect of Dr. Dinesh S. Patel MD and CEO, applications are made to the Central Govt. for approval of remuneration paid / payable to him in view of Loss in the year 2008-09 & consequently remuneration exceeded the limits prescribed under Schedule XIII. In view of carried forward Losses to 2009-10, the remuneration for the year exceeded limits as prescribed U/s.198 read with the applicable sections of Companies Act 1956 and hence applications for Managing Director and Whole time Directors are made to Central Government for waiver of excess remuneration paid.

2) Consequent to inadequacy of profits in the current year, remuneration paid to Managing Director and Whole-time Directors, is in excess of the limits specified in Section 198 read with Schedule XIII of the Companies Act, 1956. The excess remuneration drawn by the Directors amount to Rs.. 73.89 lacs. The Company is making an application to the Central Govt. for the waiver of the excess remuneration paid.

3 Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs.283.92 Lacs (Previous year Rs.120.84 Lacs) Capital expenditure incurred during the year thereof amounts to Rs. 31.31 Lacs has been included in Fixed Assets. (Previous year Rs. 32.86 Lacs).

4 The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made,as required by Accounting Standard 17 on "Segment Reporting"

5 Sundry Debtors includes Rs.2650.09 Lacs (previous year Rs.791.89 Lacs) due from private companies in which directors are interested as directors/members.

6 Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/Capital Work in Progress, as appropriate.Current year Rs. 184.58 lacs (Previous year Rs. NIL ).

7 Related Party Disclosures

A. Name of the related parties and nature of relationship

a) Associate companies Themis Distributors Pvt. Ltd.

Vividh Distributors Pvt. Ltd.

Vividh Margi Investments Pvt. Ltd.

b) Joint Venture Richter Themis Medicare (India) Pvt. Ltd.

c) Key Management personnel Dr. D.S. Patel (M.D & CEO)

Dr. Sachin D. Patel

Mrs. Jayshree D. Patel

d) Directors/Relatives of Key Management Mr S. D. Patel Personnel Mrs Madhuben Patel

Mrs H. B. Patel

Mrs Margi R Choksy

Mrs Reena Patel

C. The information given above, have been reckoned on the basis of information available with the Company.

8 Deferred tax liability is provided by implementing Accounting Standard -22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006. The Deferred Tax Liability Rs.15.05 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.17.56 lacs Cr.); comprising Rs 7.50 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.10.9 lacs ) and Rs.18.88 lacs (Cr.) towards Bonus (Previous Year Rs 19.11 lacs (Cr) , Rs 11.47 lacs (Cr.) towards provision of Gratuity (Previous Year assets Rs..0.13 lacs (Dr) and Rs. 22.80 lacs (Dr) depreciation (Previous Year Rs.12.32 lacs (Dr.).

9 Details of Dues to Micro, Small and Medium Enterprises as per Micro,Small and Medium Enterprises Development Act, 2006 (MSMED Act).

10 The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevantassets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011. The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March,2009. Accordingly, Foreign Exchange differences for Rs. 232.80 lacs has been adjusted against the cost of assets/CWIP.

11 Disclosures as required by Accounting Standard 19, "Leases " are given below:

i) The Company has taken various residential , office and godown premises under operating lease or leave and licenceagreements.These are generally not non-cancellable and ranging between 11 months and 3 years period under leave andlicence, or for longer period inrespect of other leases and are renewable by mutual consent on agreeable terms. Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease payments are recognised in the profit and Loss Account under "Rent" in Schedule.

iii) The future minimum lease payments under non-cancellable operating Lease NIL

12 Significant accounting policies adopted by the Company are disclosed in the statement annexed to these Accounts as Annexure - II.

13 Previous years figures have been regrouped / recast whereever necessary.


Mar 31, 2010

1 Revenue expenditure on Research & Development incurred & Charged out during the year through the natural heads of expenses amount to Rs. 120.84 Lacs (Previous year Rs.215.85 Lacs) Capital expenditure incurred during the year thereof amounts to Rs.32.86 Lacs has been included in Fixed Assets. (Previous year Rs.22.81 Lacs).

2 The Company has only one segment namely pharmaceuticals, hence no separate disclosure of segment wise information has been made, as required by Accounting Standard 17 on "Segment Reporting"

3 Sundry Debtors includes Rs.791.89 Lacs (previous year Rs.1280.47 Lacs) due from private companies in which directors are interested as directors/members.

4 Interest on borrowings attributed to new projects is Capitalised and included in the cost of Fixed Assets/Capital Work in Progress, as appropriate. Current year Rs. NIL (Previous year Rs.2.90 Lacs).

5 Deferred tax liability is provided by implementing Accounting Standard -22 "Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006.

The Deferred Tax Liability Rs.17.56 lacs (Cr) is recognized in Profit & Loss Account during the current year (Previous year Rs.49.98 lacs Dr.); comprising Rs 10.9 lacs (Cr) towards Current Years leave encashment (Previous Year Asset Rs.6.15 lacs ) and Rs.19.11 lacs (Cr.) towards Bonus (Previous Year Rs 5.80 lacs (Cr) , Rs 0.13 lacs (Dr.) towards provision of Gratuity (Previous Year assets Rs..3.55 lacs (Dr) and Rs. 12.32 lacs (Dr) depreciation (Previous Year Rs.58.38 lacs (Dr.).

6 Details of Dues to Micro, Small and Medium Enterprises as per Micro,Small and Medium Enterprises Development Act,2006 (MSMED Act).

7 Employees Benefit:

Liability for Employee Benefit has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard -15(Revised) the details of which are as under :

8 The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Rules, 2006 was amended on 31st March, 2009, vide a notification dated 31st March 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to Companies to recognise Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired upto 31st March 2009, retrospectively from accounting periods commencing after 7th December, 2006 (i.e. from 1st April, 2007 for the Company) upto 31st March, 2011 as capital cost of acquisition of assets where they relate to acquisition of assets or to a Translation Reserve viz. "Foreign Currency Monetary Item Translation Difference Account" (FCMITDA). In other cases the amount so recognised as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognised in the FCMITDA is to be amortised over the balance term of the monetary assets or liability but not beyond 31st March, 2011.

The Company had chosen to exercise this option in preparation of its financial statements for the year ended 31st March,2009. Accordingly, Foreign Exchange differences for Rs. 232.80 lacs has been adjusted against the cost of assets/CWIP.

9 Disclosures as required by Accounting Standard 19, "Leases " are given below:

I) The Company has taken various residential, office and godown premises under operating lease or leave and licence agreements. These are generally not non-cancellable and ranging between 11 months and 3 years period under leave and licence, or for longer period inrespect of other leases and are renewable by mutual consent on agreeable terms. Also the Company has given refundable interest free security Deposits under certain agreements.

ii) Lease payments are recognised in the profit and Loss Account under "Rent" in Schedule.

iii) The future minimum lease payments under non-cancellable operating Lease NIL

10 The Company does not expect any tax liability under the Income Tax Act, 1961 for the year, in view of carry forward of losses and write off of certain assets pursuant to Scheme of Arrangement u/s. 78, 100 and 391 of the Companies Act, 1956 approved by the Members of the Company and judicature of Gujarat High Court.

11 The accounts of Overseas Subsidiary Company "Themis Medicare Singapore Pte. Ltd,Singapore" and statement pursuant to Section 212 of the Companies Act,1956 are disclosed elsewhere in this report. The Subsidiary Company is proposed to be struck off from the records of appropriate authorities of Singapore and the same is in process.

12 The Company has worked out a Scheme of Arrangement with its Shareholders under section 78, section 100 & section 391 of the Companies Act, 1956 to write off Debtors, Inventories, Loans and Advances and Intangible Assets of the Company aggregating Rs. 2607.94 lacs against Reconstruction Reserve Account of the Company. Under the Scheme, all the reserves as on 31.03.2009, aggregating Rs. 8928.39 lacs required to be transferred to Reconstruction Reserve Account. The Balance in the Reconstruction Reserve Account will be transferred to General Reserve Account, subject to necessary approval.

During the year the Scheme of Arrangement has been approved by Members of the Company at the extra ordinary general meeting held on 17-08-2009 and also approved by the Honourable High Court of Gujarat vide order dated 03-12-2009. Accordingly necessary effect of the scheme has been given in the financial statements for the year ended 31.03.2010 after complying with all necessary formalities.

13 Previous years figures have been regrouped / recast whereever necessary.

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