Mar 31, 2022
(ii) Property, Plant and Equipment pledged as security
There is a second charge on the immovable assets such as land, building and plant and machinery at Thane/ Ankleshwar factory against the working capital loans of H 21 lakhs [March 31,2021 H 18 lakhs]
(iii) Contractual obligations
Refer to note 10d for disclosure of contractual commitments for the Right-of-use assets.
(iv) Capital work-in-progress:
Capital work-in-progress mainly comprises of Buildings, Plant and equipments & furniture and fittings.
(v) Depreciation is provided on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives based on technical assessment on a pro-rata basis using the straight line method.
The useful life used to amortise intangible assets relates to the expected future performance of the assets and management''s judgment of the period over which economic benefit will be derived from the asset.
Impairment of Trade Marks and Technical Knowhow (âIntangible assetsâ)
The impairment assessment has been performed for acquired Trade Marks and internally generated Technical Knowhow annually.
The recoverable amount of a intangible assets is based on its value in use. The value in use is estimated using discounted cash flows over a period of five years. We believe five years to be most appropriate time scale over which to review and consider annual performance before applying a fix terminal value multiple to year end cash flow.
Operating margins and growth rates for the ten year cash flow projections have been estimated based on past experience and after considering the financial budgets/ forecasts approved by management. Other key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represent management''s assessment of future trends in the relevant industries and have been based on historical data from both external and internal sources.
These assumptions are reviewed annually as part of management''s budgeting and strategic planning cycles. These estimates may differ from actual results. The values assigned to each of the key assumptions reflect the Management''s past experience as their assessment of future trends, and are consistent with external / internal sources of information.
As at March 31, 2022 the estimated recoverable amount of the intangible assets exceeded its carrying amount and accordingly, no impairment was recognized.
The Company has also performed sensitivity analysis calculations on the projections used and discount rate applied. Given the significant headroom that exists, and the results of the sensitivity analysis performed, it is concluded that there is no significant risk that reasonable changes in any key assumptions would cause the carrying value of intangible assets to exceed its value in use.
a) Inventory is hypothecated against the secured working capital loans of Union Bank of India, State Bank of India, Export Import Bank of India and IDBI Bank.
b) During the year, the Company has recorded inventory write-downs of C 60 Lakhs (March 31, 2021 C 149 Lakhs ). The adjustments were included in cost of material consumed and changes in inventories.
Terms and rights attached to equity shares
The Company has only one class of shares i.e. equity shares having a face value of C 8 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
General reserve is created from time to time by way of transfer profits from retained earnings. General reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss.
The Company has a defined benefit gratuity plan (funded). The Company''s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund.
The fund is managed by a trust which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy.
The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at March 31, 2022 by an independent 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 above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period. The principal assumptions used in determining gratuity and leave encashment for the Companyâs plan are shown below Description of risk exposures
Valuations are performed on certain basic set of predetermined assumptions and other regulatory frame work which may vary overtime. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:
A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Significant estimate:
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, we treat them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially adverse impact on our financial position or profitability.
Estimated amount of contracts remaining to be executed on capital account and not provided for C 1091 lakhs [March 31,2021 C 1,191 lakhs] (net of capital advances of C 118 lakhs [March 31,2021 C 32 lakhs]).
The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Board of Directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports to the Board of Directors on its activities. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in market conditions and the Company''s activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. Credit risk is managed 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 establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade receivables and other financial assets. The credit risk relates to the certain items is as follows :
Trade receivables
TheCompany''sexposure to credit riskis i nfluencedmainlybytheindividualcharacteristicsofeach customer.Thedemographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed 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 allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the
Cash and cash equivalents
As at the year end, the Company held cash C 5694 lakhs (March 31, 2021 - C 4036 lakhs). The cash counterparties are banks with good credit rating.
Bank balances other than cash and cash equivalents
As at the year end, the Company held Bank balances other than cash and cash equivalents C 1,332 lakhs (March 31, 2021- C 39 lakhs). Other bank balances are held with bank and financial institution counterparties are banks with good credit rating.
Other financial assets
a) Other financial assets which include rent deposits, loans to employees, employee advances and insurance claim receivable for which the credit risk has not increased significantly since initial recognition, accordingly the expected probability of default is low.
Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the past history, existing market conditions as well as forward looking estimates at the end of each reporting.
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, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.
The table below provides details regarding the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant.
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company uses derivative to manage market risk.
In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.
Fair value sensitivity analysis for fixed-rate instruments
The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ''adjusted net debt'' to ''total equity''. For this purpose, adjusted net debt is defined as interest-bearing loans and borrowings, less cash and cash equivalents, other bank balances.
The following methods and assumptions were used to estimate the fair values:
1 Fair value of cash and cash equivalents, bank balances , trade receivables, other current financial assets, trade payables, other current financial liabilities approximate their carrying amounts largely due to short term maturities of these instruments.
2 The amount of fair value of loans to employee and security deposits given and taken is considered to be insignificant in value and hence carrying value and fair value is considered as same.
3 Significant estimates
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
4 The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
5 Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (âCODMâ) of the Company. The Managing Director, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CODM of the Company. The CODM reviews the Company''s performance on the analysis of profit before tax at overall level. Accordingly, the Company has only one reportable business segment which is manufacturing and marketing of pharmaceutical products as per Ind AS 108. (âOperating Segmentsâ)
33 Utilisation of Borrowed funds and share premium
a) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the intermediary shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
b) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
Mar 31, 2018
1. Background
RPG Life Sciences Limited (the ''Company'') is a Company domiciled in India with its registered office situated at RPG House, 463 Dr. A.B. Road, Worli Mumbai 400 030. The Company was incorporated on March 29, 2007 under the provisions of The Companies Act, as applicable in India as RPG Pharmaceuticals Limited and its equity shares are listed on Bombay Stock Exchange & National Stock Exchange in India. The name of the Company was subsequently changed to RPG Life Sciences Limited on February 13, 2008. The Company is engaged in the manufacturing and marketing of Formulations (Finished Dosage Forms) and Active Pharmaceutical Ingredients (APIs).
(ii) Property, Plant and Equipment pledged as security
There is a second charge on the immovable assets such as land, building and plant and machinery at Thane/ Ankleshwar factory against the working capital loans of Rs.3,369 lakhs.
(iii) Contractual obligations
Refer to note 10d for disclosure of contractual commitments for the Leased Assets.
(iv) Capital work-in-progress:
Capital work-in-progress mainly comprises of Buildings, Plant and equipments & furniture and fittings.
(v) Additions to Building, Plant and Equipment Furniture and Fixtures and office equipment include Rs.Nil (Previous year Rs.44 lakhs), Rs.30 lakhs (Previous year Rs.97 lakhs), Rs.3 lakhs (Previous year Rs.7 lakhs) and Rs.1 lakhs (Previous year Rs.3 lakhs) respectively pertaining to Research and Development activities.
(iv) Significant estimate: useful life of intangible assets
The useful life used to amortise intangible assets relates to the expected future performance of the assets and management''s judgment of the period over which economic benefit will be derived from the asset.
(v) Contractual obligations
Refer to note 10d for disclosure of contractual commitments for the Leased Assets.
Terms and rights attached to equity shares
The Company has only one class of shares i.e. equity shares having a face value of ''8 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
(i) There were no amounts outstanding to be paid to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED).
(ii) No interest is paid/payable during the year to any micro or small enterprise registered under the MSMED.
(iii) The above information has been determined to the extent such parties could be identified on the basis of the information available with the company regarding the status of suppliers under the MSMED.
b) Defined Benefit Plans - Gratuity
The Company has a defined benefit gratuity plan (funded). The company''s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund.
The fund is managed by a trust which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy.
The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at March 31, 2018 by an independent 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 Company''s financial statements as at March 31, 2017.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
The principal assumptions used in determining gratuity and leave encashment for the Company''s plan are shown below
Description of risk exposures
Valuations are performed on certain basic set of predetermined assumptions and other regulatory frame work which may vary overtime. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest rate risk
A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Concentration Risk
Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
Mortality risk
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Asset liability matching risk
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Critical judgments in calculating amounts
When a customer has the right to return the product within the given period, the Company recognises a provision for returns Rs.1,077 lakhs as at March 31, 2018 (March 31, 2017 - Rs.1,000 lakhs, April 1, 2016 - Rs.987 lakhs). This is measured based on the previous history of sales return. Revenue is adjusted for the expected value of the return.
2. Discontinued operation a) Description
In the previous year, pursuant to the approval of the Board of Directors at their meeting held on May 26, 2016, the Company had entered into a Business Transfer Agreement dated May 26, 2016 with Intas Pharmaceuticals Limited for sale of Biotech Business Unit, as a going concern on a slump sale basis, at a consideration of Rs.2,487 lakhs. The sale consideration was received on July 6, 2016 (closing date). The gain realised from the aforesaid sale of Biotech Business Unit amounting to Rs.738 lakhs has been considered as discontinued operations in accordance with Ind AS - 105 -''Non-Current Assets held for sale and Discontinued Operations and the requisite information for Biotech Business Unit has been furnished hereunder;
3. 2005 Employee Stock Option Plan (ESOP 2005)
Pursuant to a special resolution passed by the Shareholders at the Annual General Meeting held on August 27, 2008, the Company adopted the Employee Stock Option Scheme titled Rs.2005 Employee Stock Option Plan'' (ESOP 2005) for employees and directors of the Company including those employees and directors who were to be granted options, pursuant to the Scheme of Arrangement sanctioned by the Hon''ble High Court of Judicature at Bombay on December 14, 2007, in lieu of options that were granted by Brabourne Enterprise Limited (the transferor Company) under its ESOP 2005. The total number of equity shares reserved under the said plan is 250,000 equity shares of ''8 each. The details of such equity shares granted are as follows:
A) The Remuneration/Compensation Committee at its meeting held on 6th August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in lieu of options that were granted to them by Brabourne Enterprise Limited. The employee had an option to apply for one equity share of '' 8 each at an exercise price of Rs.32.06. Of these options, 29,255 equity stock options had been exercised in earlier years and the remaining equity stock options have lapsed.
(b) Granted 95,000 equity stock options to the eligible director and employees of the Company, with an option for one equity share of '' 8 each at an exercise price of Rs.100 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/Compensation Committee. These equity stock options shall vest, Exchange prior to the date of meeting of the Remuneration/ Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005.
All equity stock options had lapsed / forfeited in earlier years.
B) The Remuneration/Compensation Committee at its meeting held on 20 October, 2010 - Granted 15,000 equity stock options to an eligible employee with an option for one equity share of Rs.8 each at an exercise price of Rs.104 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005. Of these options, 2,910 equity stock options were outstanding as of March 31, 2016 which have been exercised during the year. The remaining equity stock options have lapsed/forfeited in earlier years. The Company has adopted intrinsic value method as permitted by the SEBI Guidelines and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India to account for the cost of stock options to employees and a director of the Company. Intrinsic value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option. In view of the exercise price being higher than the closing market price on the day prior to the date of grant, the intrinsic value of the option is Nil. Consequently, the accounting value of the option (compensation cost) is also Nil.
The weighted average fair value of each stock option on the date of its grant is Rs.41.34, which has been vetted by an independent valuer. This fair value has been calculated using Black-Scholes Option Pricing Model. The inputs used for this calculation are (i) Average Share Price: Rs.91.33 on the date of grant (ii) Average Exercise Price: Rs.90.70 (iii) Average Expected Volatility: 47.98% (iv) Average Option Life: 8 years (v) Average Expected Dividend Yield: 3.50%, and (vi) Average Risk Free Interest Rate: 8.08%. The daily volatility of the company''s shares on the National Stock Exchange over a period of time prior to the date of grant, corresponding with the expected life of the options, has also been considered for determining the fair value.
4. First time adoption of Ind AS Transition to Ind AS
These are the Company''s first financial statements prepared in accordance with Ind AS.
The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 1, 2017, with a transition date of April 1, 2016. These financial statements for the year ended March 31, 2018 are the first the Company has prepared under Ind AS. For all periods upto and including the year ended March 31, 2017 , the Company prepared its financial statements in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act IGAAP (hereinafter referred to as "IGAAP").
The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended March 31, 2018, together with the comparative information as at and for the year ended March 31, 2017. The Company''s opening Ind AS Balance Sheet has been prepared as at April 1, 2016, the date of transition to Ind AS.
In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind 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
In preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and IGAAP have been recognised directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its IGAAP financial statements, including the Balance Sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.
A.1 Ind AS optional exemptions
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous IGAAP to Ind AS.
A.1.1. Deemed cost
Ind 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 as recognised in the financial statements as at the date of transition to Ind AS, measured as per the IGAAP 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 IGAAP carrying value.
A.1.2. Share-based payment transaction
"Ind AS 101 permits first time adopter not to apply Ind AS 102 ""Share-based payments"" to equity instruments that vested before the date of transition to Ind AS.
Accordingly, the Company has not adopted Ind AS 102 for the equity instruments that vested before the date of transition. "
A.2 Ind AS mandatory exceptions
The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:
A.2.1 Estimates
An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with IGAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with IGAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model. in accordance with Ind AS at the date of transition as these were not required under IGAAP.
A.2.2 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
A.2.3 Impairment of financial assets
Ind AS 101 requires guidances for impairment as per Ind AS 109 to be applied post transition date.
B. Reconciliations between IGAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from IGAAP to Ind AS.
C. Notes to first-time adoption:
1. Deferred tax
The various transitional adjustments lead to temporary differences. According to the Ind AS and accounting policies followed by the Company it is required to account for the tax effect of such diferrences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or other comprehensive income, on the date of transition.
2. Remeasurements of post-employment benefit obligations
Under Ind 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 IGAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by '' 91 lakhs. There is no impact on the total equity as at March 31, 2017.
3. Borrowings
Ind 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 recognised 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. Accordingly, borrowings as at March 31, 2017 have been reduced by Rs.11 lakhs.The total equity increased by an equivalent amount. The profit for the year ended March 31, 2017 reduced by Rs.1 lakhs as a result of the additional interest expense.
4. Retained earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
5. Other comprehensive income
Under Ind AS, all items of income and expense recognised 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 recognised 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.
6. Trade Receivables
As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result , the allowance for doubtful debts increased by Rs.35 lakhs as at March 31,2017. Consequently, the total equity as at March 31, 2017 decreased by Rs.35 lakhs (April 1, 2016 - Rs.24 lakhs) and profit for the year ended March 31, 2017 decreased by Rs.11 lakhs.
7. Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind 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. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by Rs.1335 lakhs (April 1, 2016 - Rs.1089 lakhs). There is no impact on the total equity and profit.
8. Sales Return & Spoilages
Provision for sales return and spoilages has been made under Ind AS as per past trend of sales return to sales. Consequently, the total equity as at March 31, 2017 decreased by Rs.1,000 lakhs (April 1, 2016 - Rs.987 lakhs) and profit for the year ended March 31, 2017 decreased by Rs.13 lakhs.
5. Financial risk management
The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Board of Directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports to the Board of Directors on its activities. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in market conditions and the Company''s activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The audit committee oversees how management monitors compliance with the company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit.
i. Credit risk:
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company''s receivables from customers. Credit risk is managed 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 establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade receivables and other financial assets. The credit risk relates to the certain items is as follows :
Trade receivable
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed 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 allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. The Company has used expected credit loss (ECL) model (under simplified approach) for assessing the impairment loss. For the purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.
Cash and cash equivalents
As at the year end, the Company held cash Rs.11 lakhs (31.03.2017 - Rs.86 lakhs). The cash counterparties are banks with good credit rating.
Other Bank Balances
Other bank balances are held with bank and financial institution counterparties are banks with good credit rating.
Other financial assets
a) Other financial assets which include rent deposits, loans to employees, employee advances and insurance claim receivable for which the credit risk has not increased significantly since initial recognition, accordingly the expected probability of default is low.
Significant estimates and judgments
Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the past history, existing market conditions as well as forward looking estimates at the end of each reporting.
(ii) 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, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.
The table below provides details regarding the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant.
(iii) Market Risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices -will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt.
We are exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs. The Company uses derivative to manage market risk.
b) Sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO and GBP rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.
Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.
Fair value sensitivity analysis for fixed-rate instruments
The company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
6. Capital Management:
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ''adjusted net debt'' to ''total equity''. For this purpose, adjusted net debt is defined as interest-bearing loans and borrowings, less cash and cash equivalents, other bank bank balances.
1. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
2. Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and cash equivalents, bank balances , trade receivables, other current financial assets, trade payables, other current financial liabilities, short term borrowings from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.
2. The amount of fair value of loans to employee and security deposits given and taken is considered to be insignificant in value and hence carrying value and fair value is considered as same.
3. Significant estimates
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.
7. Segment information
a) Description of segments and principal activities
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the company. The Managing Director, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CODM of the company. The CODM reviews the company''s performance on the analysis of profit before tax at overall level. Accordinlgly, the Company has only one reportable business segment which is manufacturing and marketing of pharmaceutical products as per Ind AS 108. ("Operating Segments")
8. Business Combination
On October 21, 2016, the Company has acquired for cash consideration of Rs.4,488 lakhs certain product trademarks owned by Sun Pharmaceuticals Industries Limited and its subsidiaries and certain other assets such as inventories, novated contracts i.e. supplier contracts and information contained in the registration, dossier and/or drug master files. The Company has also acquired perpetual, exclusive, royalty free licences.
Mar 31, 2017
(b) The Company has only one class of shares i.e. equity shares having a face value of '' 8 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
Note: There are no delayed payments to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Further, there are no dues to such parties which are outstanding as at the Balance Sheet date. This information has been determined on the basis of information available with the Company regarding their status as Micro and Small Enterprises.
1. Intangible Assets are other than internally generated.
2. Additions to Building, Plant and Equipment Furniture and Fixtures and office equipment include Rs.44 lakhs (Previous year - Nil), Rs.97 lakhs (Previous year Rs.78 lakhs), Rs.7 lakhs (Previous year Nil) and Rs.3 lakhs (Previous year - Nil) respectively pertaining to Research and Development activities.
3. Deductions from Gross block and Accumulated depreciation includes assets of the Biotech business unit which was sold on a slump sale basis on July 6, 2017 [Refer Note No 30].
4. During the year, Trademarks were purchased on assignment/perpetual license basis from Sun Pharmaceutical Industries Limited (including its subsidiary, Sun Pharma Laboratories Limited) vide Asset Purchase Agreement (AP A) dated July 27,2016. These Trademarks were capitalised on October 21,2016 (closing date). Certain trademarks are in process of registration.
5. Computer Software includes assets acquired under finance lease amounting to Rs. 44 lakhs (Previous year Rs.21 lakhs) and Rs.14 Lakhs (Previous Year Rs.8 lakhs) under gross block and accumulated depreciation, respectively
6. Office Equipment includes assets acquired under finance lease amounting to Rs.26 Lakhs (Previous year Rs.26 lakhs) and Rs.14 Lakhs (Previous year Rs.6 lakhs) under gross block and accumulated depreciation, respectively.
7. Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances Rs.16 lakhs [Previous year Rs.39 lakhs] Rs.89 lakhs [Previous year Rs.199 lakhs].
8. (a) Pursuant to the approval of the Board of Directors at their meeting held on May 26, 2016, the Company had entered into a Business Transfer Agreement dated May 26, 2016 with Intas Pharmaceuticals Limited for sale of Biotech Business Unit, as a going concern on a slump sale basis, at a consideration of Rs.2,487 lakhs. The sale consideration had been received on July 6, 2016 (closing date). The gain realized from the aforesaid sale of Biotech Business Unit amounting to Rs.738 lakhs had been disclosed as an exceptional item in the financial results. The same has been considered as discontinuing operations in accordance with Accounting Standard - 24 - ''Discontinuing Operations''.
9. 2005 Employee Stock Option Plan (ESOP 2005)
Pursuant to a special resolution passed by the Shareholders at the Annual General Meeting held on 27th August, 2008, the Company adopted the Employee Stock Option Scheme titled ''2005 Employee Stock Option Plan'' (ESOP 2005) for employees and directors of the Company including those employees and directors who were to be granted options, pursuant to the Scheme of Arrangement sanctioned by the Hon''ble High Court of Judicature at Bombay on 14th December, 2007, in lieu of options that were granted by Brabourne Enterprise Limited (the transferor Company) under its ESOP 2005. The total number of equity shares reserved under the said plan is 250,000 equity shares of Rs.8 each. The details of such equity shares granted are as follows:
A) The Remuneration/Compensation Committee at its meeting held on 6th August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in lieu of options that were granted to them by Brabourne Enterprise Limited. The employee had an option to apply for one equity share of Rs.8 each at an exercise price of '' 32.06. Of these options, 29,255 equity stock options had been exercised in earlier years and the remaining equity stock options have lapsed.
(b) Granted 95,000 equity stock options to the eligible director and employees of the Company, with an option for one equity share of Rs.8 each at an exercise price of Rs.100 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005.
All equity stock options had lapsed / forfeited in earlier years.
B) The Remuneration/Compensation Committee at its meeting held on 20th October, 2010 -
Granted 15,000 equity stock options to an eligible employee with an option for one equity share of '' 8 each at an exercise price of Rs.104 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005.
Of these options, 2,910 equity stock options were outstanding as of March 31, 2016 which have been exercised during the year. The remaining equity stock options have lapsed/forfeited in earlier years.
The Company has adopted intrinsic value method as permitted by the SEBI Guidelines and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India to account for the cost of stock options to employees and a director of the Company. Intrinsic value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option. In view of the exercise price being higher than the closing market price on the day prior to the date of grant, the intrinsic value of the option is Nil. Consequently, the accounting value of the option (compensation cost) is also Nil.
The weighted average fair value of each stock option on the date of its grant is Rs.41.34, which has been vetted by an independent valuer. This fair value has been calculated using Black-Scholes Option Pricing Model. The inputs used for this calculation are (i) Average Share Price: Rs.91.33 on the date of grant (ii) Average Exercise Price: Rs.90.70 (iii) Average Expected Volatility: 47.98%
(iv) Average Option Life: 8 years (v) Average Expected Dividend Yield: 3.50%, and (vi) Average Risk Free Interest Rate: 8.08%. The daily volatility of the company''s shares on the National Stock Exchange over a period of time prior to the date of grant, corresponding with the expected life of the options, has also been considered for determining the fair value.
Had compensation cost for the stock options granted under ESOP 2005 been determined based on the fair value method, the Company''s Profit for the year and Earnings per Share would have been as per the pro forma amounts indicated below:
*Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated the November 8, 2016.
10. Insurance Claim
On February 14, 2017, there was a minor fire incident in one of the plants of the Company. Due to the same, certain Fixed Assets having written down value of Rs.59 lakhs and Inventories of Raw Material, Work In Progress and Finished goods aggregating to Rs.124 lakhs were impacted/destroyed. Subsequently, the Company filed for an insurance claim for the loss of Fixed Assets and Inventory. Basis the surveyor report, the Company has accrued insurance claim receivable of Rs.193 Lakhs.
11. Forward Contracts and Unhedged Foreign Currency Outstanding Balances
The Company uses forward contracts to hedge its risks of net exposure associated with foreign currency fluctuations. The Company does not enter into any forward contract which is intended for trading or speculative purposes.
(a) The details of forward contracts outstanding against foreign currency Receivables as at the Balance Sheet date are as follows:
12. Employee Benefits
(A) Defined Contribution Plans
The Company has recognized the following amounts in the Statement of Profit and Loss for the year:
(B) Defined Benefit Plan
Valuation in respect of Gratuity has been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
Notes:
(a) The primary reporting of the Company is based on the business segment. The Company has only one reportable business segment which is manufacturing and marketing of pharmaceutical products. Accordingly, the figures appearing in these financial statements relate to pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.
13. Related Party Disclosures
(A) Related parties with whom the Company had transactions during the year Key Management Personnel CT. Renganathan
14. Leases
(I) Disclosures for Finance Leases
The Company has acquired certain Computer Software and Office Equipment under Finance Lease. The details of minimum lease payments outstanding as at the Balance Sheet date in respect of these assets are as under:
15. Earnings per share
Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
16. Previous year''s figures have been regrouped / reclassified wherever necessary.
Mar 31, 2016
Note: There are no delayed payments to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 during the year. Further, there are no dues to such parties which are outstanding as at the Balance Sheet date. This information has been determined on the basis of information available with the Company regarding their status as Micro and Small Enterprises.
1. Intangible Assets are other than internally generated.
2. Additions to Building, Plant and Equipment and Furniture and Fixtures include Nil (Previous year - 5 Lakhs), Rs, 78 Lakhs (Previous year Rs, 90 Lakhs) and Nil (Previous year Rs, 1 Lakhs) respectively pertaining to Research and Development activities.
3. In the previous year, pursuant to the enactment of the Companies Act, 2013, effective 1st April, 2014, the management has evaluated and reassessed the useful life of its fixed assets. Consequent to such change, the charge on account of depreciation for the previous year is higher by Rs, 37 Lakhs. Further, fixed assets of Rs, 1 lakh having no residual life as at 1st April, 2014, have been recognized in the opening balance of General Reserve in the previous year.
4. Depreciation expense for previous year includes prior period credit of Rs, 56 Lakhs representing impact of rectification in the classification and estimated useful life of certain fixed
assets.
5. Computer Software includes assets acquired under finance lease amounting to Rs, 21 Lakhs and Rs, 8 Lakhs under gross block and accumulated depreciation, respectively.
6. Office Equipment includes assets acquired under finance lease amounting to Rs, 26 Lakhs and Rs, 6 Lakhs under gross block and accumulated depreciation, respectively.
7. Vehicles - Under Lease represent assets acquired under finance lease.
8. Provision for Doubtful Debts and Advances (Net) for the previous year includes credit of an amount of Rs, 414 Lakhs recovered from a party towards which provision was created in Financial Year 2013
9. Accordingly, the provision had been reversed by the amount received.
10. 2005 Employee Stock Option Plan (ESOP 2005)
Pursuant to a special resolution passed by the Shareholders at the Annual General Meeting held on 27th August, 2008, the Company adopted the Employee Stock Option Scheme titled â2005 Employee Stock Option Planâ (ESOP 2005) for employees and directors of the Company including those employees and directors who were to be granted options, pursuant to the Scheme of Arrangement sanctioned by the Honâble High Court of Judicature at Bombay on 14th December, 2007, in lieu of options that were granted by Brabourne Enterprise Limited (the transferor Company) under its ESOP 2005. The total number of equity shares reserved under the said plan is 250,000 equity shares of '' 8 each. The details of such equity shares granted are as follows:
A) The Remuneration/Compensation Committee at its meeting held on 6th August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in lieu of options that were granted to them by Brabourne Enterprise Limited. The employee had an option to apply for one equity share of Rs, 8 each at an exercise price of Rs, 32.06.
Of these options, 29,255 equity stock options have been exercised as on 31st March, 2016 and the remaining equity stock options have lapsed.
(b) Granted 95,000 equity stock options to the eligible director and employees of the Company, with an option for one equity share of Rs, 8 each at an exercise price of Rs, 100 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/ Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005.
As on 31st March, 2016 all equity stock options have lapsed / forfeited.
B) The Remuneration/Compensation Committee at its meeting held on 20th October, 2010 -
Granted 15,000 equity stock options to an eligible employee with an option for one equity share of Rs, 8 each at an exercise price of Rs, 104 being the price higher than the closing price quoted on the National Stock Exchange prior to the date of meeting of the Remuneration/Compensation Committee. These equity stock options shall vest, in case of employees of General Manager grade and above, equally but conditionally on linear scale based on performance, over five years beginning from one year after the date of grant. Barring certain eventualities, the exercise period to subscribe to the equity shares would be 10 years from the dates of vesting except otherwise mentioned in ESOP 2005. Of these options, 2,910 equity stock options remain outstanding as on 31st March, 2016 and the remaining equity stock options have lapsed / forfeited.
The Company has adopted intrinsic value method as permitted by the SEBI Guidelines and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India to account for the cost of stock options to employees and a director of the Company. Intrinsic value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option. In view of the exercise price being higher than the closing market price on the day prior to the date of grant, the intrinsic value of the option is Nil. Consequently, the accounting value of the option (compensation cost) is also Nil.
The weighted average fair value of each stock option on the date of its grant is Rs, 41.34, which has been vetted by an independent valuer. This fair value has been calculated using Black-Scholes Option Pricing Model. The inputs used for this calculation are (i) Average Share Price: Rs, 91.33 on the date of grant (ii) Average Exercise Price: Rs, 90.70 (iii) Average Expected Volatility: 47.98% (iv) Average Option Life: 8 years (v) Average Expected Dividend Yield: 3.50%, and (vi) Average Risk Free Interest Rate: 8.08%. The daily volatility of the companyâs shares on the National Stock Exchange over a period of time prior to the date of grant, corresponding with the expected life of the options, has also been considered for determining the fair value.
Notes:
(a) Consumption of Materials includes consumption by third parties under contract with the Company and consumption in respect of physician samples.
(b) Components and spare parts referred to in paragraph VIII(c) of Additional Information under General Instructions for Preparation of Statement of Profit and Loss in Part II of Schedule III of the Companies Act, 2013 are assumed to be those forming part of the finished goods produced and not those used for maintenance of plant and machinery.
11. Forward Contracts and Unheeded Foreign Currency Outstanding Balances
The Company uses forward contracts to hedge its risks of net exposure associated with foreign currency fluctuations. The Company does not enter into any forward contract which is intended for trading or speculative purposes.
*Amount is below the rounding off norm adopted by the Company.
(B) Defined Benefit Plan
Valuation in respect of Gratuity has been carried out by independent actuary, as at the Balance Sheet date, based on the following assumptions:
(C) Other Employee Benefits
Long-term and short-term liabilities for Compensated Absences as at the Balance Sheet date were Rs, 199 Lakhs (Previous year Rs, 158 Lakhs) and Rs, 96 Lakhs (Previous year Rs, 98 Lakhs) respectively.
Notes:
(a) The primary reporting of the Company is based on the business segment. The Company has only one reportable business segment which is manufacturing and marketing of pharmaceutical products. Accordingly, the figures appearing in these financial statements relate to pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location of customers. Revenue is segregated in to two segments namely India and Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as disclosed in Note 2.
12. Related Party Disclosures
(A) Related parties with whom the Company had transactions during the year
Key Management Personnel Ajit Singh Chouhan (upto 30th September, 2014)
CT. Renganathan (from 02nd January, 2015)
*In view of inadequacy of profit for the year 2014-15, remuneration aggregating to Rs, 31 Lakhs paid to the Managing Director (MD) of the Company in the previous year was in excess of the limit prescribed under Section 197 of the Act. The same has been recovered in the current year.
13. Earnings per share
Basic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share has been calculated by dividing profit for the year attributable to equity shareholders, by the weighted average number of equity shares outstanding during the year and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Dilutive potential equity shares that have been converted in to equity shares during the year are included in the calculation of diluted earnings per share from the beginning of the year to the date of conversion and from the date of conversion, the resulting equity shares are included in computing both basic and diluted earnings per share. Earnings per Share has been computed as under:
14. Previous yearâs figures have been regrouped / reclassified wherever necessary.
Only Audit Committee and Stakeholderâs Relationship Committee positions are considered.
Ms. Neera Saggi resigned from the Directorship of the Company, w.e.f. October 29, 2015.
Ms. Zahabiya Khorakiwala has been appointed as an Independent Director on the Board of the Company w.e.f. October 29, 2015.
Mar 31, 2015
1. Background
RPG Life Sciences Limited (the 'Company') was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the Company was
subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the Company has acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
Terms of Repayment
Repayable in 36 Equated Monthly Instalments beginning from the time
loan is taken along with interest ranging from 10.25% to 10.75%.
Monthly payment of Equated Monthly Instalments beginning from the month
subsequent to taking the lease.
Repayable in 12 Equated quarterly Installments beginning from the month
of taking the lease along with interest at 14.09% to 14.36% per annum.
Working Capital Loans are secured by hypothecation of inventory and
book debts and second charge on immoveable assets at Thane / Ankleshwar
Factory.
Note: There are no delayed payments to Micro and Small Enterprises as
defined in the Micro, Small and Medium Enterprises Development Act,
2006 during the year. Further, there are no dues to such parties which
are outstanding as at the Balance Sheet date. This information has been
determined on the basis of information available with the Company
regarding their status as Micro and Small Enterprises.
2. Contingent Liabilities
(a) Claims against the company not acknowledged as debts
(i) Sales tax matters - 118
(ii) Excise matters - 53
(iii) Service tax matters - 237
(b) Guarantee given to Gujarat Industrial
Development Corporation 15 15
(c) Bank guarantees given to third parties 293 200
Notes:
(i) Future cash outflows including interest in respect of (a)(i) to (a)
(iii) above are determinable only on receipt of judgments/ decisions
pending with various authorities/forums and/or final outcome of the
matters.
(ii) The management is of opinion that there will be no impact on
future cash outflow of the Company in respect of (b) and
(c) above.
3. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 740 lakhs [Previous
year Rs. 168 lakhs].
4. Provision for Doubtful Debts and Advances (Net) includes credit of
an amount of Rs. 414 lakhs recovered from a party towards which provision
was created in the previous year. Accordingly, the provision has been
reversed by the amount received.
5. 2005 Employee Stock Option Plan (ESOP 2005)
Pursuant to a special resolution passed by the Shareholders at the
Annual General Meeting held on 27th August, 2008, the Company adopted
the Employee Stock Option Scheme titled '2005 Employee Stock Option
Plan' (ESOP 2005) for employees and Directors of the Company including
those employees and Directors who were to be granted options, pursuant
to the Scheme of Arrangement sanctioned by the Hon'ble High Court of
Judicature at Bombay on 14th December, 2007, in lieu of options that
were granted by Brabourne Enterprise Limited (the transferor Company)
under its ESOP 2005. The total number of equity shares reserved under
the said plan is 250,000 equity shares of ' 8 each. The details of such
equity shares granted are as follows:
(A) The Remuneration/Compensation Committee at its meeting held on 6th
August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in
lieu of options that were granted to them by Brabourne Enterprise
Limited. The employee had an option to apply for one equity share of Rs.
8 each at an exercise price of Rs. 32.06. Of these options, 29,255 equity
stock options have been exercised as on 31st March, 2015 and 864 options
remain outstanding as on 31st March, 2015.
Notes forming part of the Financial Statements as at and for the year
ended 31st March, 2015
(b) Granted 95,000 equity stock options to the eligible Director and
employees of the Company, with an option for one equity share of Rs. 8
each at an exercise price of Rs. 100 being the price higher than the
closing price quoted on the National Stock Exchange prior to the date
of meeting of the Remuneration/Compensation Committee. These equity
stock options shall vest, in case of employees of General Manager grade
and above, equally but conditionally on linear scale based on
performance, over five years beginning from one year after the date of
grant. Barring certain eventualities, the exercise period to subscribe
to the equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 6,240 equity stock options remain outstanding as on
31st March, 2015 and the remaining equity stock options have lapsed /
forfeited.
(B) The Remuneration/Compensation Committee at its meeting held on 20th
October, 2010 -
Granted 15,000 equity stock options to an eligible employee with an
option for one equity share of Rs. 8 each at an exercise price of Rs. 104
being the price higher than the closing price quoted on the National
Stock Exchange prior to the date of meeting of the
Remuneration/Compensation Committee. These equity stock options shall
vest, in case of employees of General Manager grade and above, equally
but conditionally on linear scale based on performance, over five years
beginning from one year after the date of grant. Barring certain
eventualities, the exercise period to subscribe to the equity shares
would be 10 years from the dates of vesting except otherwise mentioned
in ESOP 2005. of these options, 2,910 equity stock options remain
outstanding as on 31st March, 2015 and the remaining equity stock
options have lapsed /forfeited.
The Company has adopted intrinsic value method as permitted by the SEBI
Guidelines and the Guidance Note on Accounting for Employee Share Based
Payment issued by the Institute of Chartered Accountants of India to
account for the cost of stock options to employees and a Director of
the Company. Intrinsic value is the amount by which the quoted market
price of the underlying share exceeds the exercise price of the option.
In view of the exercise price being higher than the closing market
price on the day prior to the date of grant, the intrinsic value of the
option is Nil. Consequently, the accounting value of the option
(compensation cost) is also Nil.
Movement in the Options under ESOP 2005:
The weighted average fair value of each stock option on the date of its
grant is Rs. 41.34, which has been vetted by an independent valuer. This
fair value has been calculated using Black-Scholes Option Pricing
Model. The inputs used for this calculation are (i) Average Share
Price: Rs. 91.33 on the date of grant, (ii) Average Exercise Price: Rs.
90.70, (iii) Average Expected Volatility: 47.98%,
(iv) Average Option Life: 8 years, (v) Average Expected Dividend Yield:
3.50% and (vi) Average Risk Free Interest Rate: 8.08%. The daily
volatility of the Company's shares on the National Stock Exchange over
a period of time prior to the date of grant, corresponding with the
expected life of the options, has also been considered for determining
the fair value.
Had compensation cost for the stock options granted under ESOP 2005
been determined based on the fair value method, the Company's Profit
for the year and Earnings per Share would have been as per the pro
forma amounts indicated below:
6. Exceptional Items for the previous year comprise of profit of Rs.
6,172 lakhs on sale of a portion of leasehold land and building thereon
and the Company's share of interest income of Rs. 242 lakhs earned on the
sale consideration of Rs. 7,025 lakhs (net of expenses) deposited by the
buyer in an escrow account, jointly held in the name of the Company and
the buyer, till the execution of the sale deed. The amount of sale
consideration and the Company's share of interest income lying in the
escrow account had been transferred to the Company on the date of
execution of the sale deed.
Notes:
(a) Consumption of Materials includes consumption by third parties
under contract with the Company and consumption in respect of physician
samples.
(b) Components and spare parts referred to in paragraph VIII(c) of
Additional Information under General Instructions for Preparation of
Statement of Profit and Loss in Part II of Schedule III of the
Companies Act, 2013 are assumed to be those forming part of the
finished goods produced and not those used for maintenance of plant and
machinery.
7. Forward Contracts and Unhedged Foreign Currency Outstanding
Balances
The Company uses forward contracts to hedge its risks of net exposure
associated with foreign currency fluctuations. The Company does not
enter into any forward contract which is intended for trading or
speculative purposes.
(a) The details of forward contracts outstanding as at the Balance
Sheet date are as follows:
(C) Other Employee Benefits
Long-term and short-term liabilities for Compensated Absences as at the
Balance Sheet date were Rs. 158 lakhs (Previous year Rs. 142 lakhs) and Rs.
98 lakhs (Previous year Rs. 92 lakhs), respectively.
Notes:
(a) The primary reporting of the Company is based on the business
segment. The Company has only one reportable business segment which is
manufacturing and marketing of pharmaceutical products. Accordingly,
the figures appearing in these financial statements relate to
pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2.
*In view of Inadequacy of profit for the year 2014-15, remuneration
aggregating to Rs. 31 lakhs paid to the Managing Director (MD) of the
Company is in excess of the limit prescribed under Section 197 of the
Act. Pending approval of the Central Government , the said amount is
being held in trust by the MD.
8. Leases
(I) Disclosures for Finance Leases
The Company has acquired certain Vehicles and Computer Software under
Finance Lease. The details of minimum lease payments outstanding as at
the Balance Sheet date in respect of these assets are as under:
9. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equity shares outstanding during the year. Diluted earnings
per share has been calculated by dividing profit for the year
attributable to equity shareholders, by the weighted average number of
equity shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, unless
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are
included in the calculation of diluted earnings per share from the
beginning of the year to the date of conversion and from the date of
conversion, the resulting equity shares are included in computing both
basic and diluted earnings per share. Earnings per Share has been
computed as under:
10. Previous year's figures have been regrouped / reclassified wherever
necessary. Signatures to Notes 1 to 48
Notes:
1. The above Cash Flow Statement has been prepared under the 'Indirect
Method' as set out in the Accounting Standard - 3 on Cash Flow
Statements, notified under sub-section (3C) of Section 211 of the
Companies Act, 1956. [Refer Note 2(a)]
2. Previous year figures have been regrouped where necessary.
Mar 31, 2014
1. Background
RPG Life Sciences Limited (the ''company'') was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the company was
subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the company acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
(a) The company has only one class of shares i.e. Equity Shares having
a face value of Rs. 8 each. Each shareholder is eligible for one vote
per share held. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting.
(b) Shares reserved for issue under options
Refer Note 30 for details of shares to be issued under the Employee
Stock Option Plan.
Note: There are no delayed payments to Micro and Small Enterprises as
defined in the Micro, Small and Medium Enterprises Development Act,
2006 during the year. Further, there are no dues to such parties which
are outstanding as at the Balance Sheet date. This information has been
determined on the basis of information available with the company.
As at As at
31st March, 2014 31st March, 2013
Rs. in lakhs Rs. in lakhs
2. Contingent Liabilities
(a) Claims against the company
not acknowledged as debts
(i) Sales tax matters 118 118
(ii) Excise matters 53 53
(iii) Service tax matters 237 237
(b) Guarantee given to Gujarat
Industrial Development
Corporation 15 15
(c) Bank guarantees given to
third parties 200 158
Notes:
(i) Future cash outflows in respect of (a)(i) to (a)(iii) above are
determinable only on receipt of judgments/decisions pending with
various authorities/forums and/or final outcome of the matters.
(ii) The management is of opinion that there will be no impact on
future cash outflow of the company in respect of (b) and (c) above.
3. 2005 Employee Stock Option Plan
Pursuant to a special resolution passed by the Shareholders at the
Annual General Meeting held on 27th August, 2008, the company adopted
the Employee Stock Option Scheme titled ''2005 Employee Stock Option
Plan'' (ESOP 2005) for employees and directors of the company including
those employees and directors who were to be granted options, pursuant
to the Scheme of Arrangement sanctioned by the Hon''ble High Court of
Judicature at Bombay on 14th December, 2007, in lieu of options that
were granted by Brabourne Enterprise Limited (the transferor company)
under its ESOP 2005. The total number of equity shares reserved under
the said plan is 250,000 equity shares of Rs. 8 each. The details of
such equity shares granted are as follows:
(A) The Remuneration/Compensation Committee at its meeting held on 6th
August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in
lieu of options that were granted to them by Brabourne Enterprise
Limited. The employee had an option to apply for one equity share of
Rs. 8 each at an exercise price of Rs. 32.06.
Of these options, 28,391 equity stock options have been exercised in
earlier years and 1,728 options remain outstanding as on 31st March,
2014.
(b) Granted 95,000 equity stock options to the eligible director and
employees of the company, with an option for one equity share of Rs. 8
each at an exercise price of Rs. 100 being the price higher than the
closing price quoted on the National Stock Exchange prior to the date
of meeting of the Remuneration/Compensation Committee. These equity
stock options shall vest, in case of employees of General Manager grade
and above, equally but conditionally on linear scale based on
performance, over five years beginning from one year after the date of
grant. Barring certain eventualities, the exercise period to subscribe
to the equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 6,240 equity stock options remain outstanding as on
31st March, 2014 and the remaining equity stock options have lapsed /
forfeited.
(B) The Remuneration/Compensation Committee at its meeting held on 20th
October, 2010 - Granted 15,000 equity stock options to an eligible
employee with an option for one equity share of Rs. 8 each at an
exercise price of Rs. 104 being the price higher than the closing
price quoted on the National Stock Exchange prior to the date of
meeting of the Remuneration/Compensation Committee. These equity stock
options shall vest, in case of employees of General Manager grade and
above, equally but conditionally on linear scale based on performance,
over five years beginning from one year after the date of grant.
Barring certain eventualities, the exercise period to subscribe to the
equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 2,910 equity stock options remain outstanding as on
31st March, 2014 and the remaining equity stock options have lapsed /
forfeited.
The company has used intrinsic value method to account for the cost of
stock options to employees and a director of the company. Intrinsic
value is the amount by which the quoted market price of the underlying
share exceeds the exercise price of the option. In view of the exercise
price being higher than the closing market price on the day prior to
the date of grant, the intrinsic value of the option is Nil.
Consequently, the accounting value of the option (compensation cost) is
also Nil.
The weighted average fair value of each stock option on the date of its
grant is Rs. 41.34, which has been vetted by an independent valuer.
This fair value has been calculated using Black-Scholes Option Pricing
Model. The inputs used for this calculation are (i) Average Share
Price: Rs. 91.33 on the date of grant (ii) Average Exercise Price: Rs.
90.70 (iii) Average Expected Volatility: 47.98%
(iv) Average Option Life: 8 years (v) Average Expected Dividend Yield:
3.50%, and (vi) Average Risk Free Interest Rate: 8.08%. The daily
volatility of the company''s shares on the National Stock Exchange over
a period of time prior to the date of grant, corresponding with the
expected life of the options, has also been considered for determining
the fair value.
4. In the previous year, the company had entered into an Memorandum
of Understanding (the ''MOU'') with a buyer for sale of a portion of
leasehold land and building thereon, which were disclosed as assets
held for sale as at the Balance Sheet date [Refer Note 19]. The sale
deed has been executed on 6th June, 2013. Exceptional Items for the
year ended 31st March, 2014 comprise of profit of Rs. 6,172 lakhs on
the aforesaid sale of a portion of leasehold land and building thereon
and the company''s share of interest income of Rs. 242 lakhs earned on
the sale consideration of Rs. 7,025 lakhs (net of expenses) deposited
by the buyer in an escrow account, jointly held in the name of the
company and the buyer, till the execution of the sale deed. The amount
of sale consideration and the company''s share of interest income lying
in the escrow account has been transferred to the company on the date
of execution of the sale deed.
5. Provision for Doubtful Debts and Advances (Net) for the year ended
31st March, 2014 includes an amount of Rs. 674 lakhs towards receivable
from certain parties to whom pharmaceutical goods were supplied as per
contracts and for which these parties have reneged on the contractual
payment terms. The company has initiated legal action against these
parties. Without prejudice to the position that Rs. 674 lakhs is
recoverable, the company has made provision for the same.
6. During the year ended 31st March, 2014, a cyber fraud was
committed by unknown hackers on the company whereby illegal and
unauthorised online bank transfers were made to unknown accounts from
the company''s bank account for the amounts aggregating to Rs. 241 lakhs
through internet banking. Internal investigation has confirmed that
none of the employees of the company were involved in the aforesaid
fraudulent transactions. The case is filed with the Metropolitan
Magistrate Court, Mumbai and is currently being investigated by the
Police and the Court. As the company has been fully compensated for the
above loss, no provision has been recognised by the company in the
books of accounts as at 31st March, 2014.
Notes:
(a) Consumption of Raw Materials includes consumption by third parties
under contract with the company and consumption in respect of physician
samples.
(b) Components and spare parts referred to in Paragraph (viii)(c) of
Additional Information (Paragraph 5) under General Instructions for
Preparation of Statement of Profit and Loss in Part II of Schedule VI
of the Act are assumed to be those forming part of the finished goods
produced and not those used for maintenance of plant and machinery.
(C) Other Employee Benefits
Long-term and short-term liabilities for Compensated Absences as at the
Balance Sheet date were Rs. 142 lakhs (Previous year Rs. 125 lakhs) and
Rs. 92 lakhs (Previous year Rs. 82 lakhs) respectively.
Notes:
(a) The primary reporting of the company is based on the business
segment. The company has only one reportable business segment which is
manufacturing and marketing of pharmaceutical products. Accordingly,
the figures appearing in these financial statements relate to
pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2.
7. Previous year''s figures have been regrouped / reclassified where
necessary.
Mar 31, 2013
1. Background
RPG Life Sciences Limited (the ''company'') was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the company was
subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the company acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
2. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 110 lakhs (Previous
year Rs. 202 lakhs).
3. 2005 Employee Stock Option Plan
Pursuant to a special resolution passed by the Shareholders at the
Annual General Meeting held on 27th August, 2008, the company adopted
the Employee Stock Option Scheme titled ''2005 Employee Stock Option
Plan'' (ESOP 2005) for employees and directors of the company including
those employees and directors who were to be granted options, pursuant
to the Scheme of Arrangement sanctioned by the Hon''ble High Court of
Judicature at Bombay on 14th December, 2007, in lieu of options that
were granted by Brabourne Enterprise Limited (the transferor company)
under its ESOP 2005. The total number of equity shares reserved under
the said plan is 250,000 equity shares of Rs. 8 each. The details of
such equity shares granted are as follows:
(A) The Remuneration/Compensation Committee at its meeting held on 6th
August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in
lieu of options that were granted to them by Brabourne Enterprise
Limited. The employee had an option to apply for one equity share of
Rs. 8 each at an exercise price of Rs. 32.06.
Of these options, 28,391 equity stock options have been exercised in
earlier years and 1,728 options remain outstanding as on 31st March,
2013.
(b) Granted 95,000 equity stock options to the eligible director and
employees of the company, with an option for one equity share of Rs. 8
each at an exercise price of Rs. 100 being the price higher than the
closing price quoted on the National Stock Exchange prior to the date
of meeting of the Remuneration/Compensation Committee. These equity
stock options shall vest, in case of employees of General Manager grade
and above, equally but conditionally on linear scale based on
performance, over five years beginning from one year after the date of
grant. Barring certain eventualities, the exercise period to subscribe
to the equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 6,240 equity stock options remain outstanding as on
31st March, 2013 and the remaining equity stock options have lapsed /
forfeited.
(B) The Remuneration/Compensation Committee at its meeting held on 20th
October, 2010 -
Granted 15,000 equity stock options to an eligible employee with an
option for one equity share of Rs. 8 each at an exercise price of Rs.
104 being the price higher than the closing price quoted on the
National Stock Exchange prior to the date of meeting of the
Remuneration/Compensation Committee. These equity stock options shall
vest, in case of employees of General Manager grade and above, equally
but conditionally on linear scale based on performance, over five years
beginning from one year after the date of grant. Barring certain
eventualities, the exercise period to subscribe to the equity shares
would be 10 years from the dates of vesting except otherwise mentioned
in ESOP 2005. Of these options, 2,910 equity stock options remain
outstanding as on 31st March, 2013 and the remaining equity stock
options have lapsed / forfeited.
(C) The Remuneration/Compensation Committee at its meeting held on 28th
April, 2011 -
Granted 20,000 equity stock options to an eligible employee with an
option for one equity share of Rs. 8 each at an exercise price of Rs.
80 being the price higher than the closing price quoted on the National
Stock Exchange prior to the date of meeting of the
Remuneration/Compensation Committee. These equity stock options shall
vest, in case of employees of General Manager grade and above, equally
but conditionally on linear scale based on performance, over five years
beginning from one year after the date of grant. Barring certain
eventualities, the exercise period to subscribe to the equity shares
would be 10 years from the dates of vesting except otherwise mentioned
in ESOP 2005. All of these stock options have been forfeited during
the year, thus outstanding equity stock options as on 31st March, 2013
are Nil.
(D) The Remuneration/Compensation Committee at its meeting held on 19th
August, 2011 -
Granted 30,000 equity stock options to eligible employees with an
option for one equity share of Rs. 8 each at an exercise price of Rs.
76 being the price higher than the closing price quoted on the National
Stock Exchange prior to the date of meeting of the
Remuneration/Compensation Committee. These equity stock options shall
vest, in case of employees of General Manager grade and above, equally
but conditionally on linear scale based on performance, over five years
beginning from one year after the date of grant. Barring certain
eventualities, the exercise period to subscribe to the equity shares
would be 10 years from the dates of vesting except otherwise mentioned
in ESOP 2005. All of these stock options have been forfeited during
the year, thus outstanding equity stock options as on 31st March, 2013
are Nil. The company has used intrinsic value method to account for
the cost of stock options to employees and a director of the company.
Intrinsic value is the amount by which the quoted market price of the
underlying share exceeds the exercise price of the option. In view of
the exercise price being higher than the closing market price on the
day prior to the date of grant, the intrinsic value of the option is
Nil. Consequently, the accounting value of the option (compensation
cost) is also Nil.
Movement in the Options under ESOP 2005:
The weighted average fair value of each stock option on the date of its
grant is Rs. 41.34, which has been vetted by an independent valuer.
This fair value has been calculated using Black-Scholes Option Pricing
Model. The inputs used for this calculation are (i) Average Share
Price: Rs. 91.33 on the date of grant (ii) Average Exercise Price: Rs.
90.70 (iii) Average Expected Volatility: 47.98% (iv) Average Option
Life: 8 years (v) Average Expected Dividend Yield: 3.50%, and (vi)
Average Risk Free Interest Rate: 8.08%. The daily volatility of the
company''s shares on the National Stock Exchange over a period of time
prior to the date of grant, corresponding with the expected life of the
options, has also been considered for determining the fair value.
Had compensation cost for the stock options granted under ESOP 2005
been determined based on the fair value method, the company''s Profit
for the year and Earnings per Share would have been as per the
pro-forma amounts indicated below:
4. During the year, the company has entered into an Memorandum of
Understanding (the ''MOU'') with a buyer for sale of a
portion of leasehold land and building thereon, which have been
disclosed as assets held for sale as at the Balance Sheet date [Refer
Note 20]. As per the MOU, the consideration has been deposited by the
buyer in an escrow account jointly held in the name of the company and
the buyer. Interest accrued thereon will be shared equally amongst both
the parties on completion of the transaction. Pending completion of the
transaction, the company has not accounted for its share of interest
income of Rs. 195 lakhs (Previous year - Nil) accrued on the aforesaid
escrow account up to the Balance Sheet date.
5. Forward Contracts and Unhedged Foreign Currency Outstanding
Balances
The company uses forward contracts to hedge its risks of net exposure
associated with foreign currency fluctuations. The company does not
enter into any forward contract which is intended for trading or
speculative purposes.
6. Related Party Disclosures
(A) Enterprise where control exists
*No transactions during the year
@Consequent to acquisition of additional shares of the company during
the year by one of the subsidiaries of Swallow Associates Limited, a
Promoter Group Company, the company became a subsidiary of Swallow
Associates Limited with effect from 13th July, 2012 in terms of the
provisions of sub-section (3) of Section 4 of the Act. However, on
conversion of Swallow Associates Limited to Swallow Associates LLP
(''SAL''), the company ceased to be a subsidiary of Swallow Associates
Limited with effect from 31st October, 2012. SAL along with its
subsidiaries, now holds 52.64% of the paid-up share capital of the
company as at 31st March, 2013.
7. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equity shares outstanding during the year. Diluted earnings
per share has been calculated by dividing profit for the year
attributable to equity shareholders, by the weighted average number of
equity shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, unless
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are
included in the calculation of diluted earnings per share from the
beginning of the year to the date of conversion and from the date of
conversion, the resulting equity shares are included in computing both
basic and diluted earnings per share. Earnings per Share has been
computed as under:
8. Previous year''s figures have been regrouped / reclassified where
necessary.
Mar 31, 2012
1. Background
RPG Life Sciences Limited (the 'company') was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the company was
subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the company acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
2. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 202 lakhs (Previous
year Rs. 62 lakhs).
3. 2005 Employee Stock Option Plan
Pursuant to a special resolution passed by the Shareholders at the
Annual General Meeting held on 27th August, 2008, the company adopted
the Employee Stock Option Scheme titled '2005 Employee Stock Option
Plan' (ESOP 2005) for employees and directors of the company including
those employees and directors who were to be granted options, pursuant
to the Scheme of Arrangement sanctioned by the Hon'ble High Court of
Judicature at Bombay on 14th December, 2007, in lieu of options that
were granted by Brabourne Enterprise Limited (the transferor company)
under its ESOP 2005. The total number of equity shares reserved under
the said plan is 250,000 equity shares of Rs. 8 each. The details of
such equity shares granted are as follows:
(A) The Remuneration/Compensation Committee at its meeting held on 6th
August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in
lieu of options that were granted to them by Brabourne Enterprise
Limited. The employee had an option to apply for one equity share of
Rs. 8 each at an exercise price of Rs. 32.06. Of these options, 28,391
equity stock options have been exercised and 1,728 options remain
outstanding as on 31st March, 2012.
(b) Granted 95,000 equity stock options to the eligible director and
employees of the company, with an option for one equity share of Rs. 8
each at an exercise price of Rs. 100 being the price higher than the
closing price quoted on the National Stock Exchange prior to the date
of meeting of the Remuneration/Compensation Committee. These equity
stock options shall vest, in case of employees of General Manager grade
and above, equally but conditionally on linear scale based on
performance, over five years beginning from one year after the date of
grant. Barring certain eventualities, the exercise period to subscribe
to the equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 41,114 equity stock options remain outstanding as on
31st March, 2012 and the remaining equity stock options have lapsed.
(B) The Remuneration/Compensation Committee at its meeting held on 20th
October, 2010 - Granted 15,000 equity stock options to an eligible
employee with an option for one equity share of Rs. 8 each at an
exercise price of Rs. 104 being the price higher than the closing
price quoted on the National Stock Exchange prior to the date of
meeting of the Remuneration/Compensation Committee. These equity stock
options shall vest, in case of employees of General Manager grade and
above, equally but conditionally on linear scale based on performance,
over five years beginning from one year after the date of grant.
Barring certain eventualities, the exercise period to subscribe to the
equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 15,000 equity stock options remain outstanding as on
31st March, 2012.
(C) The Remuneration/Compensation Committee at its meeting held on 28th
April, 2011 - Granted 20,000 equity stock options to an eligible
employee with an option for one equity share of Rs. 8 each at an
exercise price of Rs. 80 being the price higher than the closing price
quoted on the National Stock Exchange prior to the date of meeting of
the Remuneration/Compensation Committee. These equity stock options
shall vest, in case of employees of General Manager grade and above,
equally but conditionally on linear scale based on performance, over
five years beginning from one year after the date of grant. Barring
certain eventualities, the exercise period to subscribe to the equity
shares would be 10 years from the dates of vesting except otherwise
mentioned in ESOP 2005.
Of these options, 20,000 equity stock options remain outstanding as on
31st March, 2012.
(D) The Remuneration/Compensation Committee at its meeting held on 19th
August, 2011 -
Granted 30,000 equity stock options to eligible employees with an
option for one equity share of Rs. 8 each at an exercise price of Rs.
76 being the price higher than the closing price quoted on the National
Stock Exchange prior to the date of meeting of the
Remuneration/Compensation Committee. These equity stock options shall
vest, in case of employees of General Manager grade and above, equally
but conditionally on linear scale based on performance, over five years
beginning from one year after the date of grant. Barring certain
eventualities, the exercise period to subscribe to the equity shares
would be 10 years from the dates of vesting except otherwise mentioned
in ESOP 2005.
Of these options, 25,000 equity stock options remain outstanding as on
31st March, 2012 and the remaining equity stock options have lapsed.
The company has used intrinsic value method to account for the cost of
stock options to employees and a director of the company. Intrinsic
value is the amount by which the quoted market price of the underlying
share exceeds the exercise price of the option. In view of the exercise
price being higher than the closing market price on the day prior to
the date of grant, the intrinsic value of the option is Nil.
Consequently, the accounting value of the option (compensation cost) is
also Nil.
The weighted average fair value of each stock option on the date of its
grant is Rs. 41.34, which has been vetted by an independent valuer.
This fair value has been calculated using Black-Schools Option Pricing
Model. The inputs used for this calculation are
(i) Average Share Price: Rs. 91.33 on the date of grant (ii) Average
Exercise Price: Rs. 90.70 (iii) Average Expected Volatility: 47.98%
(iv) Average Option Life: 8 years (v) Average Expected Dividend Yield:
3.50%, and (vi) Average Risk Free Interest Rate: 8.08%. The daily
volatility of the company's shares on the National Stock Exchange over
a period of time prior to the date of grant, corresponding with the
expected life of the options, has also been considered for determining
the fair value.
Notes:
(a) Consumption of Raw and Packing Materials includes consumption by
third parties under contract with the company and consumption in
respect of physician samples.
(b) Components and spare parts referred to in Paragraph (viii)(c) of
Additional Information (Paragraph 5) under General Instructions for
Preparation of Statement of Profit and Loss in Part II of Revised
Schedule VI of the Act are assumed to be those forming part of the
finished goods produced and not those used for maintenance of plant and
machinery.
4. Forward Contracts and Unheeded Foreign Currency Outstanding
Balances
The company uses forward contracts to hedge its risks of net exposure
associated with foreign currency fluctuations. The company does not
enter into any forward contract which is intended for trading or
speculative purposes.
Notes:
(a) The primary reporting of the company is based on the business
segment. The company has only one reportable business segment which is
manufacturing and marketing of pharmaceutical products. Accordingly,
the figures appearing in these financial statements relate to
pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2.
5. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year attributable to equity shareholders, by the weighted average
number of equity shares outstanding during the year. Diluted earnings
per share has been calculated by dividing profit for the year
attributable to equity shareholders, by the weighted average number of
equity shares outstanding during the year and also the weighted average
number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity
shares are deemed converted as of the beginning of the year, unless
they have been issued at a later date. Dilutive potential equity shares
that have been converted in to equity shares during the year are
included in the calculation of diluted earnings per share from the
beginning of the year to the date of conversion and from the date of
conversion, the resulting equity shares are included in computing both
basic and diluted earnings per share. Earnings per Share has been
computed as under:
6. The financial statements for the year ended 31st March, 2011 were
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 31st March, 2012 are
prepared as per Revised Schedule VI. Accordingly, the previous year
figures have also been reclassified to conform to this year'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
1. Background
RPG Life Sciences Limited (the company) was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the company
was subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the company has acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
2. During the year 2008-2009, the company had raised amounts
aggregating to Rs. 12,668(000) by way of allotment of 2,138,000 share
warrants on preferential basis with an option to apply for one equity
share of the face value of Rs. 8 each for cash at a premium of Rs.
15.70 per share against each share warrant held, to be exercised within
a period not exceeding eighteen months from the date of allotment in
respect of the aforesaid share warrants. In accordance with the terms
of issue of the share warrants, the company had received Rs.
12,668(000) being 25% of the price of warrants.
Of the above warrants allotted, 700,000 warrants were converted during
the previous year in to equity shares of Rs. 8 each fully paid-up at a
premium of Rs. 15.70 each. In accordance with the terms of conversion,
the company had received Rs. 12,442(000) during the previous year.
During the year, the balance 1,438,000 warrants have been converted in
to equity shares of Rs. 8 each fully paid-up at a premium of Rs. 15.70
each. In accordance with the terms of conversion, the company has
received Rs. 25,561(000) during the year.
The above amounts received aggregating to Rs. 50,671(000) have been
utilised towards repayment of term loan of Rs. 7,670(000), payment of
interest on term loan of Rs. 1,064(000) and repayment of working
capital loan of Rs. 41,937(000).
3. Pursuant to a special resolution passed by the Shareholders at the
Annual General Meeting held on 27th August, 2008, the company adopted
the Employee Stock Option Scheme titled 2005 Employee Stock Option
Plan (ESOP 2005) for employees and directors of the company including
those employees and directors who were to be granted options, pursuant
to the Scheme of Arrangement sanctioned by the Honble High Court of
Judicature at Bombay on 14th December, 2007, in lieu of options that
were granted by Brabourne Enterprises Limited (the transferor company)
under its ESOP 2005. The total number of equity shares reserved under
the said plan is 250,000 equity shares of Rs. 8 each.
The Remuneration/Compensation Committee at its meeting held on 6th
August, 2010 -
(a) Granted and vested 30,119 equity stock options to employees, in
lieu of options that were granted to them by Brabourne Enterprises
Limited. The employee had an option to apply for one equity share of
Rs. 8 each at an exercise price of Rs. 32.06.
Of these options, 28,391 equity stock options have been exercised and
1,728 options remain outstanding as on 31st March, 2011.
(b) Granted 95,000 equity stock options to the eligible director and
employees of the company, with an option for one equity share of Rs. 8
each at an exercise price of Rs. 100 being the price higher than the
closing price quoted on the National Stock Exchange prior to the date
of meeting of the Remuneration/Compensation Committee. These equity
stock options shall vest, in case of employees of General Manager grade
and above, equally but conditionally on linear scale based on
performance, over five years beginning from one year after the date of
grant. Barring certain eventualities, the exercise period to subscribe
to the equity shares would be 10 years from the dates of vesting except
otherwise mentioned in ESOP 2005.
Of these options, 95,000 equity stock options remain outstanding as on
31st March, 2011.
Further, the Remuneration/Compensation Committee at its meeting held on
20th October, 2010 granted 15,000 equity stock options to an eligible
employee with an option for one equity share of Rs. 8 each at an
exercise price of Rs. 104 being the price higher than the closing price
quoted on the National Stock Exchange prior to the date of meeting of
the Remuneration/Compensation Committee.
Of these options, 15,000 equity stock options remain outstanding as on
31st March, 2011.
The company has used intrinsic value method to account for the cost of
stock options to employees and a director of the company. Intrinsic
value is the amount by which the quoted market price of the underlying
share exceeds the exercise price of the option. In view of the exercise
price being higher than the closing market price on the day prior to
the date of grant, the intrinsic value of the option is Nil.
Consequently, the accounting value of the option (compensation cost) is
also Nil.
The weighted average fair value of each stock option on the date of its
grant is Rs. 44.54, which has been vetted by an independent valuer.
This fair value has been calculated using Black-Scholes Option Pricing
Model. The inputs used for this calculation are (i) Average Share
Price: Rs. 100.48 on the date of grant (ii) Exercise Price: Rs. 100.55
(iii) Expected Volatility: 39.51% (iv) Option Life: 8 years (v)
Expected Dividend Yield: 3.66%, and (vi) Average Risk Free Interest
Rate: 7.96%. The daily volatility of the companys shares on the
National Stock Exchange over a period of time prior to the date of
grant, corresponding with the expected life of the options, has also
been considered for determining the fair value.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 6,195(000) [Previous
year Rs. 28,046(000)].
As at As at
31st March, 2011 31st March, 2010
Rs. 000 Rs. 000
5. Contingent Liabilities
(a) Claims against the company
not acknowledged as debts
(i) Sales tax matters 11,804 11,804
(ii) Excise matters 7,190 6,165
(iii) Water Charges à 789
(b) Guarantee given to Gujarat
Industrial Development Corporation 1,546 1,546
(c) Bank guarantees given to third parties 4,601 7,989
Notes:
(i) Future cash outflows in respect of (a)(i) and (ii) above are
determinable only on receipt of judgments/decisions pending with
various authorities/forums and/or final outcome of the matters.
(ii) The management is of opinion that there will be no impact on
future cash outflow of the company in respect of (b) and (c) above.
6. There are no delayed payments to Micro and Small Enterprises as
defined in the Micro, Small and Medium Enterprises Development Act,
2006 during the year. Further, there are no dues to such parties which
are outstanding as at the Balance Sheet date. This information has been
determined on the basis of information available with the company. This
has been relied upon by the auditors.
7. The company uses forward contracts to hedge its risks of net
exposure associated with foreign currency fluctuations. The company
does not enter into any forward contract which is intended for trading
or speculative purposes.
8. Employee Benefits
The company has classified various employee benefits as under:
(C) Other Long-term Employee Benefits
The liabilities for Leave Encashment and Compensated Absences as at the
Balance Sheet date were Rs. 10,341(000) [Previous year Rs. 8,600(000)]
and Rs. 8,737(000) [Previous year Rs. 8,553(000)] respectively.
9. Segment Information
Notes:
(a) The primary reporting of the company is based on the business
segment. The company has only one reportable business segment which is
manufacturing and marketing of pharmaceutical products. Accordingly,
the figures appearing in these financial statements relate to
pharmaceutical products.
(b) Secondary segment reporting is based on the geographical location
of customers. Revenue is segregated in to two segments namely India and
Other Countries for the purpose of reporting geographical segments.
(c) The accounting policies adopted for segment reporting are in line
with the accounting policies adopted for the preparation of financial
statements as disclosed in Note 2 above.
10. Related Party Disclosures
Related parties with whom the company had transactions during the year
Key Management Personnel Arvind Vasudeva (up to 9th April, 2010)
Ajit Singh Chouhan (from 9th April, 2010)
11. Previous year figures have been regrouped where necessary.
Mar 31, 2010
1. Background
RPG Life Sciences Limited (the company) was incorporated on 29th
March, 2007 as RPG Pharmaceuticals Limited. The name of the company
was subsequently changed to RPG Life Sciences Limited on 13th February,
2008.
Pursuant to a Scheme of Arrangement, the company acquired the
pharmaceuticals business of Brabourne Enterprises Limited (formerly RPG
Life Sciences Limited) with retrospective effect from the appointed
date of 2nd April, 2007.
2. During the previous year, the company had raised amounts aggregating
to Rs. 12,668(000) by way of allotment of 2,138,000 share warrants on
preferential basis with an option to apply for one equity share of the
face value of Rs. 8 each for cash at a premium of Rs. 15.70 per share
against each share warrant held, to be exercised within a period not
exceeding eighteen months from the date of allotment in respect of the
aforesaid share warrants. In accordance with the terms of issue of the
share warrants, the company had received Rs. 12,668(000) being 25% of
the price of warrants.
Of the above warrants allotted, 700,000 warrants have been converted
during the year in to equity shares of Rs. 8 each fully paid-up at a
premium of Rs. 15.70 each. In accordance with the terms of conversion,
the company has received Rs. 12,442(000) during the year.
The above amounts received aggregating to Rs. 25,110(000) have been
utilised towards repayment of term loan of Rs. 7,670(000), payment of
interest on term loan of Rs. 1,064(000) and repayment of working
capital loan of Rs. 16,376(000).
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 28,046(000)
[Previous year Rs. 61(000)].
As at As at
31st March, 2010 31st March, 2009
Rs. 000 Rs. 000
4. Contingent Liabilities
(a) Claims against the company not
acknowledged as debts
(i) Sales tax matters 11,804 11,804
(ii) Excise matters 15,165 6,165
(iii) Water charges 789 761
(b) Guarantee given to Gujarat Industrial
Development Corporation 1,546 1,546
(c) Bank guarantees given to third parties 7,989 2,902
Notes:
(i) Future cash outflows in respect of (a)(i) and (ii) above are
determinable only on receipt of judgments/decisions pending with
various authorities/forums and/or final outcome of the matters.
(ii) The management is of opinion that there will be no impact on
future cash outflow of the company in respect of (a)(iii), (b) and (c)
above.
5. The company uses forward contracts to hedge its risks of net
exposure associated with foreign currency fluctuations. The company
does not enter into any forward contract which is intended for trading
or speculative purposes.
6. Related Party Disclosures
Related Party with whom the company had transactions during the year
Key Management Person Arvind Vasudeva
7. Previous year figures have been regrouped where necessary.
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