Home  »  Company  »  Torrent Pharmac  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Torrent Pharmaceuticals Ltd.

Mar 31, 2014

(Rs.in Crores) Year Ended Year Ended 31-Mar-2014 31-Mar-2013

NOTE - 1 : CONTINGENT LIAbILITIES

Contingent Liabilities not provided for in respect of :

(a) Claims against the Company not acknowledged as debts

Disputed demand of income tax for which appeals have been preferred 5.25 5.25

Disputed employee state insurance contribution liability under E.S.I. Act, 1948 7.30 5.80

Disputed cases for supply of goods and services 0.19 40.97

Disputed demand of excise and service tax 32.41 37.93

Disputed demand of local sales tax and C.S.T. 0.19 0.17

Disputed cases at labour court / industrial court 2.86 2.22

48.20 92.34

Against the above, the Company has paid Rs. 0.28 Crores (previous year Rs. 8.16 Crores).

The expected outfow will be determined at the time of final outcome in respect of the concerned matter. No amount is expected to be reimbursed.

(b) The Company has issued guarantees aggregating USD 0.6 crore (previous year Nil) to secure lines of credit to its wholly owned subsidiaries. The outstanding amount of liabilities by the subsidiaries as on balance sheet date, converted at closing exchange rate, is 36.06

84.26 92.34

NOTE - 2 : ACQUISITION OF IDENTIFIED bRANDED FORMULATION bUSINESS OF ELDER PHARMACEUTICALS LIMITED

The Company has entered into a defnitive binding agreement, on 13-Dec-2013, with Elder Pharmaceuticals Limited to acquire its Identified Branded Formulations Business in India and Nepal on a going concern basis for a consideration of Rs. 2004 crores. Both the parties are in the process of taking applicable regulatory approvals and satisfying with various Conditions Precedent.

NOTE - 3 : GRATUITY BENEFIT PLAN

The accruing liability on account of gratuity (retirement benefit in the nature of defined benefits plan) is accounted as per Accounting Standard 15 (revised 2005) "Employee benefits".

NOTE - 4 : EXCISE DUTIES

Excise duties shown as deduction from domestic sales represents the amount of excise duty collected on sales. Excise duty expense under Note -21, "Other Expenses", represents (i) the difference between excise duty element in closing stock and opening stock, and (ii) excise duty paid on samples and on inventory write-off, which is not recoverable from sales.

NOTE - 5 : SEGMENT REPORTING

Accounting Standard 17 requires segment information to be presented on the basis of consolidated financial statements. Accordingly segment information is disclosed in consolidated financial statements.

NOTE - 6 : REGROUPING

Previous year figures have been regrouped / recasted, wherever necessary, so as to make them comparable with those of the current year.


Mar 31, 2013

NOTE - 1 : EXCEPTIONAL ITEMS

Exceptional item for the:

(a) currentyear represents diminution, otherthan temporary, amounting toRs.37.49 crores, in the value of long-term investments in GPC Cayman Investor I Limited, based on the assessment of value of investments.

(b) previous year represents one-time charge of estimated future sales returns, amounting to Rs. 61.20 crores, on all sales effected till 31-Mar-2012, due to change in method of estimating sales returns.

NOTE - 2 : EXCISE DUTIES

Excise duties shown as deduction from domestic sales represents the amount of excise duty collected on sales. Excise duty expense under Note -21, "Other Expenses", represents (i) the difference between excise duty element in closing stock and opening stock, and (ii) excise duty paid on samples and on inventory write-off, which is not recoverable from sales.

NOTE - 3 : GRATUITY BENEFIT PLAN

The accruing liability on account of gratuity (retirement benefit in the nature of defined benefits plan) is accounted as per AS 15 (revised 2005) "Employee Benefits".

General Description of the Plan:

The Company operates a defined benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.

NOTE - 4 : PROVISION FOR SALES RETURNS

The Company as a trade practice accepts returns from market for formulations which are primarily in the nature of expired or near expiry products. Provision for such returns estimated on the basis of historical experience, market conditions and specific contractual terms and are provided for. Details of the provision is as under:

NOTE - 5 : SEGMENT REPORTING

AS 17 "Segment Reporting" requires segment information to be presented on the basis of consolidated financial statements. Accordingly segment information is disclosed in consolidated financial statements.

NOTE - 6 : REGROUPING AND DENOMINATION

(a) Previous year figures have been regrouped / recasted wherever necessary, so as to make them comparable with those of the current year.

(b) The Company has changed presentation denomination from " Rs. in Lacs" to " Rs. in Crores" from current year, accordingly, the figures for the previous year are re-presented in Rs. in Crores.


Mar 31, 2012

NOTE - 2 : CHANGE IN ACCOUNTING POLICY

With effect from 1st April, 2011, the Company has adopted AS 30, "Financial Instruments: Recognition and Measurement" with respect to accounting for derivatives, to the extent adoption does not conflict with existing mandatory accounting standards and other authoritative pronouncements, Company Law and other regulatory requirements. This adoption has resulted in change in accounting policy followed by the Company in respect of derivatives. As per requirement of the transitional provisions in AS 30, Rs. 128.73 lacs, being the difference between the carrying value and fair value of the derivatives, as on 1st April, 2011 has been credited to the general reserve account. Further, consequent to this, net foreign exchange loss is lower by Rs. 1,661.78 lacs and net Profit after tax is higher by Rs. 1,329.26 lacs.

NOTE - 23 : EXCEPTIONAL ITEMS

Hitherto, the Company has been accounting for sales returns as and when the returns are physically received at the Company's premises. During the year, the Company has effected a change in method of estimating sales returns. A detailed exercise was done to estimate future sales returns on all sales effected till 31st March, 2012. This has resulted into a one-time charge of Rs. 6120.00 lacs which has been shown under Exceptional items during the year ended 31st March, 2012.

Year ended Year ended 31-Mar-2012 31-Mar-2011

NOTE - 26 : CONTINGENT LIABILITIES

Contingent Liabilities not provided for in respect of:

(a) Claims against the Company not acknowledged as debts Disputed demand of income tax for which appeals have been preferred 340.32 153.17

Disputed employee state insurance contribution liability under E.S.I. Act, 1948 497.79 390.98

Disputed legal cases for supply of goods and services 1.78 1.78

Disputed demand of excise and service tax 146.64 72.16

Disputed demand of local sales tax and C.S.T. 17.44 65.32

Disputed cases at labour court / industrial court 115.66 92.67

1,119.63 776.08

NOTE - 27 : EXCISE DUTIES

Excise duties shown as deduction from domestic sales represents the amount of excise duty collected on sales. Excise duties expenses under Note - 22, "Other Expenses", represents the difference between excise duty element in closing stock and opening stock, excise duty paid on samples and on inventory write-off, which is not recoverable from sales.

NOTE - 32 : GRATUITY BENEFIT PLAN

The accruing liability on account of gratuity (retirement benefit in the nature of defi ned benefits plan) is accounted as per AS 15 (revised 2005) "Employee benefits".

General Description of the Plan :

The Company operates a defi ned benefit plan (the gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees' salary and the tenure of employment.

NOTE - 43 : SEGMENT REPORTING

AS17 requires segment information to be presented on the basis of consolidated financial statements. Accordingly segment information is disclosed in consolidated financial statements.

NOTE - 44 : REGROUPING

Previous year figures have been regrouped wherever necessary so as to make them comparable with those of the current year.




Mar 31, 2011

(Rs. in lacs) As at As at 31-Mar-2011 31-Mar-2010

1. Contingent Liabilities not provided for in respect of :

(a) Claims against the Company not acknowledged as debts Disputed Demand of Income Tax for which appeals have been preferred 153.17 227.66

Disputed Employee State Insurance Contribution Liability under E.S.I. Act, 1948 390.98 287.54

Disputed Legal cases for supply of Goods and Services 1.78 122.90

Disputed Demand of Excise and Service Tax 72.16 30.31

Disputed Demand of Local Sales Tax and C.S.T. 65.32 70.56

Disputed cases at Labour Court / Industrial Court 92.67 62.36

776.08 801.33

2. Excise Duty shown as deduction from Domestic Sales represents the amount of excise duty collected on sales. Excise duty expenses under Schedule - 18, "Manufacturing and Other Expenses", represents the difference between excise duty element in closing stocks and opening stocks, excise duty paid on samples and on inventory write-off, which is not recoverable from sales.

(b) The Government Grant income during the year represents grant received from the Department of Biotechnology for development of Diiodothyronine (T2) analogue, a New Chemical Entities [NCE] project.

(c) Depreciation and Amortisation includes Rs. 1,670.31 lacs (previous year Rs. 1,919.90 lacs) pertaining to Research and Development assets.

3. Sundry Debtors in Schedule - 8 include debts due from Torrent Power Limited, a company under the same management as per section 370(1B) of the Companies Act, 1956 amounting to Rs. 2.39 lacs (previous year Rs. Nil).

(b) Other than above, the Company has not given any loans or advances in the nature of loan to any of its subsidiaries and associates or fi rms / companies, in which Directors are interested.

(c) There are no loans where either repayment schedule is not prescribed or repayment is scheduled beyond seven years.

(d) Loan given to Zao Torrent Pharma, a wholly owned subsidiary, is at nil interest rate. There are no other loans where either no interest is charged or interest is below the rate specifi ed in section 372A of the Companies Act, 1956.

4. The accruing liability on account of gratuity (retirement benefit in the nature of defi ned benefits plan) is accounted as per Accounting Standard 15 (revised 2005) "Employee Benefits".

General Description of the Plan :

The Company operates a defi ned benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.








Mar 31, 2010

(Rs. in lacs) As at As at 31 -Mar-2010 31 -Mar-2009

1. Estimated amount of unexecuted capital contracts [net of advances] not provided for 6,340.02 2,381.81

2. Contingent Liabilities not provided for in respect of :

(a) Claims against the Company not acknowledged as debts Disputed Demand of Income Tax for which appeals have been preferred 227.66 846.55

Disputed Employee State Insurance Contribution Liability under E.S.I. Act, 1948 287.54 248.71

Disputed Legal cases for supply of Goods and Services 122.90 1.78

Disputed Demand of Excise and Service Tax 30.31 23.80

Disputed Demand of Local Sales Tax and C.S.T. 70.56 23.00

Disputed cases at Labour Court / Industrial Court 62.36 -

801.33 1,143.84

(b) The Company has issued guarantees aggregating USD 20.00 lacs (previous year USD 60.00 lacs) and EURO 45.00 lacs (previous year EURO 65.00 lacs) to secure lines of credit to its wholly owned subsidiaries. The outstanding amount of liabilities by the subsidiaries as on balance sheet date, converted at closing exchange rate, is 149.22 54.1 2

(c) Uncalled liability on partly paid shares of Torrent Australasia Pty Limited, a wholly owned subsidiary. [Australian Dollar (AUD) 5.88 lacs (previous yearAUD 5.88 lacs)] 243.29 206.08

3. Excise Duty shown as deduction from Domestic Sales represents the amount of excise duty collected on sales. Excise duty expenses under Schedule - 18, "Manufacturing and Other Expenses", represents the difference between excise duty element in closing stocks and opening stocks, excise duty paid on samples and on inventory write-off, which is not recoverable from sales.

4. (a) Zao Torrent Pharma (ZTP), a wholly owned subsidiary of the Company in Russia, has incurred loss of Rs. 909.30 lacs for the year. This and past losses have resulted in complete erosion of networth of ZTP. The networth of ZTP was Rs. (1,560.85) lacs against the Companys equity investment of Rs. 2,308.49 lacs. High level of payment defaults, poor liquidity conditions coupled with recent regulatory changes have brought about a high level of unpredictability to the business and pressure on profit margins. In view of the uncertainty in the recoverability of the erosion in value in the foreseeable future and considering accounting prudence, an amount of Rs. 2,308.49 lacs is recognised towards diminution in value of investment. (b) The Company has an outstanding loan balance of Rs. 2,307.67 lacs as of 31-Mar-2010 from Zao Torrent Pharma. Out of this an amount of Rs. 1,400.40 lacs is assessed as no longer recoverable and accordingly the said amount is recognised as impairment of unsecured loans.

5. MAT credit entitlement asset of Rs. 5,286.32 lacs recognised in earlier years, was written-off during the year based on amendments made in Income Tax Act 1961, and other relevant factors, and in terms of the "Guidance Note on Accounting for Credit Available in respect of MAT under the Income-tax Act, 1 961" issued by the Institute of Chartered Accountants of India.

6. The accruing liability on account of gratuity (retirement benefit in the nature of defined benefits plan) is accounted as per Accounting Standard 15 (revised 2005) "Employee Benefits".

General Description of the Plan :

The Company operates a defined benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.

7. Accounting Standard 17 requires segment information to be presented on the basis of consolidated financial statements. Accordingly segment information is disclosed in consolidated financial statements.

8. Previous year figures have been regrouped wherever necessary so as to make them comparable with those of the current year.

 
Subscribe now to get personal finance updates in your inbox!