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Notes to Accounts of Zandu Realty Ltd.

Mar 31, 2015

A. Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.100/- per share. Each holder of equity shares is entitled to one vote per share. 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.

B. Details of shareholders holding more than 5% shares in company

However, the Company has an option to redeem these debentures before the redemption period.

# 12,80,000 Preference Shares are redeemable at a premium of Rs.500/- per share; out of which 3,50,000 Nos on 27th March, 2025, 2,00,000 Nos on 12th August, 2025 and 4,80,000 Nos on 20th January, 2026 and 2,50,000 Nos on 31st July, 2026 . However, the Company has an option to redeem these Preference Share before the redemption period.

Following the accounting policies for revenue recognition, the Company has recognised revenue attributed to 35,755 sq.ft. carpet area in relation to the project at 70 Gokhale Road, Mumbai 400025 and as such the proportionate Revaluation Reserve amounting to Rs. 80,57,57,065/- has been transfered to Statement of Profit and Loss.

i) List of related parties where control exists and related parties with whom transctions have taken place and relationships:

Name of Related Party Relationship

Emami Rainbow Niketan Private Limited Investing Entity to which the Company is an Associate

ii) Key Managerial Personnel & Other Directors:

a) Key Managerial Personnel

1. Sandeep Jhunjhunwala Director and Manager

2. Anand R. Mundra (upto 30.03.2015) CEO (Commercial) & Company Secretary

b) Other Directors:

1. Abhijit Datta Non-Executive Chairman (Independent)

2. Hari Mohan Marda Independent Director

3. Karabi Sengupta (w.e.f 31.03.2015) Independent Director

4. Aditya Poddar Independent Director

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

Disputed Direct Taxes of Rs.42,40,427/- net of advances.

Borrowings from The Ratnakar Bank Limited is secured by way of hypothecation on receivables of the project at "Zandu Sigma Estates", 70 Gokhale Road, Dadar, Mumbai - 400 025 coupled with the corporate guarantee by the third party. Repayment at the end of one year from date of first disbursement i. e. 16th October, 2014.

The Board of Directors of the Company had decided not to proceed further with the proposal of amalgamation of M/S Emami Realty Limited with the Company and accordingly all proceedings in connection therewith have been withdrawn.

The Company operates in a single Business Segment i.e. Real Estate Development.

Previous year's figures have been rearranged or regrouped wherever necessary.


Mar 31, 2014

1. Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of ''100/- per share. Each holder of equity shares is entitled to one vote per share. 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.

2. RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below :

i) List of related parties where control exists and related parties with whom transctions have taken place and their relationships :

Emami Rainbow Niketan Private Limited Associate (35.51%)

Emami Realty Limited Holding Company of Emami Rainbow Niketan Pvt. Ltd. (upto 24.08.2012)

ii) Key Management Personnel Shri Sandeep Jhunjhunwala

During the year under review, the Board of Directors in their meeting held on 8th July 2013 accorded their approval to the Scheme of Amalgamation of Emami Realty Limited (ERL) with the Company ("the Scheme") under the Companies Act, 1956 w.e.f. 1st April 2013, being the Appointed Date. The Scheme was filed with the BSE Limited (BSE), being the Designated Stock Exchange and National Stock Exchange of India Limited (NSE) seeking in-principle approval under Clause 24(f) of the Listing Agreement. BSE vide letter August 5, 2013 and NSE vide letter dated August 19, 2013, both addressed to Securities and Exchange Board of India (''SEBI'') have accorded their ''no-objection'' to the said Scheme. Thereafter, vide Letter dated May 2, 2014, BSE has conveyed that the Exchange is unable to grant its "no-objection" to the Scheme in view of the observations made by SEBI. The Company is taking appropriate actions in the matter. Therefore, no effect of the Scheme has been given in these accounts.

3 Contingent Liabilities not provided for in respect of :

Disputed Direct Taxes of '' 42,40,427/- net of advances.

4 The Company operates in a single Business Segment i.e. Real Estate Development.

5 Previous year''s figures have been rearranged or regrouped wherever necessary.


Mar 31, 2013

1.1 RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosure of transactions with the related parties are given below :

i) List of related parties where control exists and related parties with whom transctions have taken place and relationships :

Emami Rainbow Niketan Private Limited Associate (35.51 %)

Emami Realty Limited Holding Company of Emami Rainbow Niketan Private Limited

(upto 24.08.2012)

Emami Infrastructure Limited Holding Company of Emami Realty Limited

Holding Company of Emami Rainbow Niketan Private Limited (w.e.f. 25.08.2012)

ii) Key Management Personnel Shri Mohan Goenka (upto 29.05.2012)

Shri Harsh Vardhan Agarwal (upto 29.05.2012)

Shri Sandeep Jhunihunwala (wef 09.11.2012)

1.2 Contingent Liabilities not provided for in respect of -

Income Taxes-Rs. 29,33,630/-

1.3 The Company operates in a single business segment i.e. Real Estate Development.

1.4 Previous year''s figures have been rearranged or regrouped wherever necessary.


Mar 31, 2012

1.1 The Company has entered into Development Agreement dated 9th September, 2011 as modified by Supplemental Agreements dated 31st March, 2012 with M/s Sheth Corp Pvt. Ltd. for construction of Industrial Building(s) on its land situated at 70, Go hale Road (South), Dadar, Mumbai - 400 025. The Company has received a sum ofRs. 70 Crores as non-refundable premium which has been recognized as an income in Statement of Profit and Loss.

1.2 An amount of Rs. 1,16,48,88,052/- has been transferred from Revaluation Reserve to General Reserve in proportion of the area allocated to M/s Sheth Corp Pvt. Ltd. in relation to the total area as per the terms of the said Development Agreements. Accordingly, provision for taxation has been made in accordance with the provisions of the Income Tax Act, 1961.

1.3 The Company has only one Reportable Business Segment i.e. "Real Estate".


Mar 31, 2011

1 The Company has only one Reportable Business Segment i.e. "Real Estate".

2 Land with structures situated at 70, Gokhale Road (South), Dadar, Mumbai - 400 025 held as Fixed Assets has been revalued at Fair Market Value based on Valuation made by an independent registered valuer as on 31st March, 2011 at Rs. 251 Crores. The resulting difference amounting to Rs. 244.98 Crores has been transferred to Capital Reserve (Revaluation Reserve). The aforesaid land with structures has since been converted to Inventory at the said Fair Market Value for commercial exploitation.

3 Related Party Disclosures

A) Names of related parties and description of relationship:

(a) Related Parties where control exists:

(i) Holding Company

Emami Limited (w.e.f. 3rd November, 2008 to 1st December, 2009 )

Emami Infrastructure Limited (from 2nd December, 2009 to 4th February, 2010)

(b) Key Management Personnel

i) Shri Mohan Goenka (w.e.f. 1st April, 2010)

ii) Shri Harsh Vardhan Agarwal (w.e.f. 1st April, 2010)

4 Previous year's figures have been rearranged or regrouped wherever necessary.


Mar 31, 2010

1 During the year 2008-09, Emami Limited alongwith Persons Acting in Concert (PACs) acquired equity stake in the Company through purchase of shares from erstwhile promoters / their family members, market purchase and under open offer in compliance with Regulation 10 and 12 of SEBI ( Substantial Acquisition of shares and Takeovers) Regulations 1997.

The total shareholding of Emami and PACs after completion of aforesaid transaction,was 5,67,167 shares representing 70.33% of equity share capital and consequently, on 3rd November, 2008 Emami became the holding Company. In terms of the Scheme ( Referred to in note no.2 below), becoming effective i.e. on 2nd December, 2009, the Company ceased to be a subsidiary of Emami Limited and became a subsidiary of Emami Infrastructure Limited (EIL). However, pursuant to sale of partial holding by EIL, the Company ceased to be a subsidiary company of EIL as on 4th February, 2010.

2 a) In terms of the Scheme of Arrangement (hereinafter referred as "the Scheme") pursuant to provisions of sections 391 to 394 of the Companies Act, 1956, as approved by the shareholders of the Company in the court convened meeting held on 11th September, 2009 and sanctioned by the Honourable High Court, Calcutta vide its order dated 17th November, 2009, Zandu FMCG undertaking (undertaking engaged in the Companys core business of manufacturing and dealing in ayurvedic and medicinal preparations as a going concern together with all assets, properties, liabilities, duties and obligations,) was demerged into Emami Limited (Emami) with effect from the appointed date i.e. 5th November, 2008. The aforesaid scheme was effective from 2nd December, 2009, being the date of filing of the certified copy of the Order of the Honble High Court, Calcutta with the Registrar of Companies, West Bengal.

b) In accordance with the said Scheme:

i) Zandu FMCG undertaking, together with all the assets and liabilities pertaining to this undertaking was demerged from the Company and transferred to and was vested in Emami, on a going concern basis. All the assets and liabilities pertaining to this undertaking includes all assets, properties, whatsoever nature, wheresoever situated, trade marks, brands, goodwill, designs, copy rights, patents and all other intellectual rights and properties, all relevant permits, quotas, rights.etc, all relevant records, all present and future liabilities, obligations and duties (including contingent liabilities and specified liabilities) which related to and arose out of the activities or operations and necessary for the said Undertaking, investments and loans and advances pertaining to Zandu Chemicals Limited, all employees of Zandu in any way associated with the said Undertaking; but did not include assets, properties, liabilities, business and employees of Zandu Non-core Undertaking.

ii) The Company retained the "Zandu Non Core Undertaking". "Zandu Non-core Undertaking" means assets, properties and liabilities forming part of its non-core business i.e. other than that comprised in Zandu FMCG Undertaking, which can be commercially exploited and gainfully employed in the business of real estate and includes without limitation, the land and immovable properties of ZANDU at Gokhale Road (South) Dadar, Mumbai - 400 025 in the State of Maharashtra, all investments of ZANDU (other than those in ZANDUs subsidiary i.e. Zandu Chemicals Limited), loans and advances granted by ZANDU to bodies corporate (other than ZANDUs subsidiary i.e. Zandu Chemicals Limited), and also liabilities pertaining to dividend, income tax and employees of ZANDU other than those related to ZANDU FMCG Undertaking.

*Pursuant to compliance of provision of Section 101,102 and 103 of Companies Act, 1956, the Honourable High Court, Calcutta vide its order dated 2nd February, 2010 sanctioned the reduction in Capital Redemption Reserve Account of the Company. The copy of the order was filed with the Registrar of Companies, West Bengal on 29th March, 2010.

iv) The amounts of revenue and expenses in respect of the ordinary activities attributable to the discontinuing operations (Zandu FMCG Undertaking) are as under:

3 The Companys name changed to "Zandu Realty Limited" pursuant to receipt of Fresh Certificate of Incorporation consequent upon change of name on 18th January, 2010 from Deputy Registrar of Companies,West Bengal. The Company is in the process of transferring its investments and the bank accounts in the name of Zandu Realty Limited.

Notes:

1. Business segments The Company has considered business segments as the primary segment for disclosure. Segments have been identified and reported taking into account the organisational structure as well as the differing risks and returns of these segments.

The Company had two reportable business segments viz Pharmaceuticals (FMCG ) for the period from 1st April 2008 to 4th November 2008 and Real Estate segment with effect from 5th November 2008. The FMCG business has been discontinued by the Company with effect from 5th November 2008, consequent to the FMCG Undertaking being demerged and vested into Emami pursuant to the Scheme of Arrangement (Refer note no 2 above). Thus, with effect from 5th November, 2008, being the appointed date as per the Scheme, the Company has only one reportable business segment i.e. "Real Estate". The Company is exploring various business opportunities in the Real Estate Business and will commence its revenue operations from Real Estate Business thereafter. Pharmaceuticals segment comprised of business of manufacturing and dealing in ayurvedic and medicinal preparations.

3 Secondary segments:

The Group operates in a single geography and has one reportable geographical segment.

4. Current years figures are not comparable with those of the previous year, for the reasons as explained in the note 1 and note 2(c) above.

5. Previous years figures have been regrouped whereever necessary, to correspond with the figures of the current year.

6 Post Employment and other Long Term Benefits (i) Defined contribution plans

a) The Company made contributions towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund contributions were made to Government administered Employees Provident Fund except in case of few eligible employees referred to in the para (b) below. Both the employees and the Company has made monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employees salary. The superannuation fund was administered by the Life Insurance Corporation of India (LIC). Under the plan, the Company was required to contribute a specified amount to the retirement benefit plan to fund the benefits.

b) Few eligible employees used to receive benefits from Zandu Employees Provident Fund Trust which was a defined contribution plan. Both the employees and the Company has made monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employees salary. The Company has paid a part of the contributions to the Trust. The remaining portion is contributed to the Government administered Employees Pension Fund. The interest rate payable by the Trust to the beneficiaries every year was being notified by the government. The Company had an obligation to make good the short fall, if any, between the return from the investments of the trust and the notified interest rate.

c) The Company recognised Rs. Nil (Previous year Rs.40,89,433) for provident fund contributions and Rs. Nil (Previous year Rs.11,16,090 ) for superannuation contribution in the Profit and Loss Account.

The Company had recognised Rs.Nil (Previous year Rs.7,36,204 ) on account of compensated absence in the Profit and Loss Account.

(ii)Defined benefit plan

The Company made annual contributions to the Zandu Pharmaceutical Works Limited Employees Group Gratuity Scheme of the LIC, a funded defined benefit plan for qualifying employees. The scheme was providing for payment to vested employees as under:

a) On Normal retirement/ early retirement/ withdrawal/resignation:

As per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

b) On death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

The actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out at 31st March, 2009 by an actuary. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The following table sets out the status of the gratuity plan and the amounts recognised in the Companys financial statements as at 31st March, 2010.

7 Related Party Disclosures

A) Names of related parties and description of relationship:

(a) Related Parties where control exists:

(i) Holding Company

Emami Limited (w.e.f. 3rd November, 2008 to 1st December, 2009 )

Emami Infrastructure Limited (from 2nd December, 2009 to 4th February, 2010)

(ii) Subsidiary

Zandu Chemicals Limited (Upto 4th November, 2008)

(b) Other parties with whom transactions have taken place during the year

(i) Associates

Leopard Investments Limited (Upto 17th February, 2009) Zandu Exports Limited (Upto 17th February, 2009)

(ii) Key Management Personnel

Mr. G.G.Parikh ( Upto 31st March, 2009) Mr. D.M.Parikh ( Upto 4th November, 2008)

(iii) Relatives of Key Management Personnel (KMP)

Mr.R.S.Agarwal (non executive promoter director) ( w.e.f. 5th November, 2008)

Mr.R.S.Goenka (non executive promoter director) ( w.e.f. 5th November, 2008)

Mr.H.M.Parikh (upto 4th November, 2008)

Mr. B.G.Parikh ( upto 31st March, 2009)

Mr. K.M.Parikh (Upto 4th November, 2008)

Mrs. Bharti GParikh ( upto 31st March, 2009)

Mrs. Kusum D.Parikh (upto 4th November, 2008)

Ms .Binali G. Parikh ( upto 31st March, 2009)

Mr. Binit D. Parikh (upto 4th November, 2008)

Mr. Sachin D. Parikh (upto 4th November, 2008)

(iv) Entities in which Key Management Personnel have control or significant influence

Vaipa Pharmaceuticals Private Limited (Upto 4th November, 2008)

Nutura Marketing Private Limited (upto 4th November, 2008)

Zandu Foundation for Healthcare

Giri Mercantile Private Limited (upto 31st March, 2009)

Subra Trading Private Limited ( upto 31st March, 2009)

Delta Agro Commodities Private Limited (Upto 4th November, 2008)

Great Equipment and Leasing Company Private Limited (Upto 4th November, 2008)

Emami Limited (w.e.f. 2nd December, 2009 )

8 The information regarding Micro Enterprises and Small Enterprises has been determined on the basis of information available with the Company. This has been relied upon by the auditors.

Amount due to vendors under Micro Enterprises and Small Enterprises for the year ended 31st March, 2010 is Rs. Nil, (Previous year Rs.Nil ) interest paid during the year/ outstanding as at year end Rs. Nil (Previous year Rs. Nil ). ( Refer schedule no 7 Current Liabilities)

Notes:

1 For the previous year ended 31st March, 2009 the managerial remuneration included remuneration to the Managing

Director and to an Executive Director upto 4 th November 2008. These directors, resigned on 4th November 2008.

The erstwhile Managing Director was appointed as an executive director with effect from 5th November 2008 and he resigned on 29th October, 2009.

Notes:

1) Since the disclosure under turnover is made by the Company on the basis of 10% of the total value based on class of goods as referred to in para 3(i) (a) of schedule VI, the items included thereunder are categorised on that basis, though individually they may be less than 10%.

2) Turnover quantity includes quantity distributed under free schemes. Turnover value excludes the value of items distributed under free scheme and samples.

3) Turnover value is including excise duty, net of trade discounts.

NOTES :

1. Installed capacities and product classification,being technical matters, are as certified by the management and relied upon by the auditors.

2 Figures for production include samples.

3 Production is at Bulk stage.

4 Production figures include goods manufactured for the Company by third parties.

 
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