Mar 31, 2018
2. NOTES TO FINANCIAL STATEMENTS 2.1 COMPANY OVERVIEW
Nectar life sciences Limited (CIN: L24232PB1995PLC016664) is an integrated pharmaceutical organization, incorporated in 1995, having its corporate office in Chandigarh and works in the states of Punjab and Himachal Pradesh. The Company has sustainable production systems to manufacture APIs and Formulations. With an expertise in R&D, the Company has been experiencing growth in this segment. The Company is also in the Menthol business and succeeded in both domestic and international markets.
The Company has its primary listings on the BSE Limited and National Stock Exchange of India Limited.
2.30 CURRENT ASSETS, LOANS & ADVANCES
In the opinion of the management of the Company, the current assets, loans and advances are approximately of the value as stated, if realized in the ordinary course of business and are subject to confirmation/reconciliation.
2.31 CURRENT LIABILITIES
I. The principal amount remaining unpaid as at 31st March 2018 in respect of enterprises covered under the âMicro, Small and Medium Enterprises Development Act, 2006â are Rs.29.67 million (Previous year Rs.16.33 millions). The principal amount that remained unpaid as at 31st March 2017 was paid during the year. The list of undertakings covered under MSMED Act was determined by the Company on the basis of information available with the Company and have been relied upon by the auditors.
II. Investor Education and Protection Fund
Other liabilities include Rs.0.34 million (Previous year Rs.0.36 millions) which relates to unclaimed dividend and share application money refundable. During the year, no amount was required to be deposited relating to unclaimed dividend and share application money refundable to the Investor Education and Protection Fund (Previous year Rs.0.07 millions).
2.29 SECURED LOANS
I. Term Loans from various banks are secured by way of First Pari Passu Charge on all the fixed assets of the Company and further secured by way of Second Pari Passu Charge on all the current assets of the Company and personal guarantee of directors/relative of a director namely Sh. Sanjiv Goyal and Sh. Aryan Goyal.
II. Corporate Loans from Financial Institution are secured by way of First Pari Passu Charge on all the fixed assets of the Company and further secured by way of Second Pari Passu Charge on all the current assets of the Company and personal guarantee/pledging of equity shares of directors/relative of a director namely Sh. Sanjiv Goyal and Sh. Aryan Goyal.
* The matters are subject to legal proceedings in the ordinary course of business. In the opinion of the management, legal proceedings for above cases, when ultimately concluded will not have a material effect on the results of operation or financial position of the company.
** Amount deposited under protest Rs.3.01 million *** Amount deposited under protest Rs.47.92 million **** Amount deposited under protest Rs.0.77 millions
# In case demand is confirmed, penalty up to equivalent amount may be imposed.
Term Loans availed by the Company, include term loans from various Banks/Financial Institutions.
Other Loans comprise of Vehicle Loans which are secured against hypothecation of respective vehicles.
III. Working Capital Limits are secured by way of First Pari Passu Charge on all the current assets of the Company and further secured by way of Second Pari Passu Charge on all the fixed assets of the Company and personal guarantee of directors/ relative of a director namely Sh. Sanjiv Goyal and Sh. Aryan Goyal.
2.34 INCOME TAX
Current Tax
Provision for Current Income Tax has been made as per Income Tax Act, 1961, based on legal opinion obtained by the Company from its income tax consultant and the statutory auditors have relied upon the said legal opinion for the purpose of current income tax.
Deferred Tax
In compliance with Indian Accounting Standard (Ind AS 12) relating to âIncome Taxesâ issued under Companies (Indian Accounting Standards) Rules, 2016 as amended up to date, the Company has provided Deferred Tax Liability accruing during the year aggregating to Rs.40.89 million (Previous Year Rs.109.88 millions) and it has been recognized in the Statement of Profit & Loss. In accordance with Indian Accounting Standard (Ind AS 12) Deferred Tax Assets and Deferred Tax Liabilities have been set off.
2.35 LEASES
Operating leases are mainly in the nature of lease of office premises with no restrictions and are renewable/ cancellable at mutual consent. There are no restrictions imposed by lease arrangements. There are no sub leases. Lease payments recognized in the Statement of Profit & Loss are Rs.13.92 million (Previous Year Rs.13.80 millions).
2.36 INTANGIBLE ASSETS
During the year, the Company incurred an amount of Rs. 60.09 million (Previous Year Rs.86.22 millions) on product development, product approval, US FDA Fees, Abbreviated New Drug Application (ANDA) Fees and such other related development expenses, recognized as Intangible Assets in the books of accounts and the same is amortized on straight line basis over a period of seven years.
2.37 EMPLOYEE RETIREMENT BENEFITS
1. Benefits valued: Gratuity & Earned leave (both a ailment & encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated absence Liabilities are unfunded
3. Valuation method: Projected Unit Credit Method
a) Relationship
i) Subsidiary Companies
Nectar life sciences USA, LLC
Nectar life sciences UK Limited, United Kingdom (Inoperative during the year)
ii) Joint Ventures and Associates
None
iii) Key Management Personnel (Managing Director/Whole time directors/CFO/Company Secretary)
Sh. Sanjiv Goyal, Chairman & Managing Director
Sh. Dinesh Dua, CEO & Whole time Director
Sh. Harprakash Singh Gill, President
Sh. Sandeep Goel, Chief Financial Officer
Sh. Sunder Lal, Company Secretary (upto 26.06.2017)
Sh. Sukhwinder Singh, Company Secretary (w.e.f.
01.07.2017, upto 08.11.2017)
Ms. Ankita Jain, Company Secretary (w.e.f. 11.11.2017, onwards)
iv) Relatives of the Key Management Personnel*
Sh. Saurabh Goyal Sh. Aryan Goyal
v) Entities over which key management personnel/their relatives are able to exercise significant influence*
Surya Narrow Fabrics
Nectar Lifestyles Private Limited
Nectar Organics Private Limited
Nectar Lifesciences Charitable Foundation
Nectar Biopharma Private Limited
* With whom the Company had transactions during the year.
2.39 SEGMENT REPORTING
i) Primary Segment (Business Segment)
The Company operates only in the business segment of âPharmaceuticals Productsâ, and in the opinion of the management the inherent nature of activities in which it is engaged are governed by the same set of risks and reward. As such the activities are identified as single segment in accordance with the Indian Accounting Standard (IndAS 108) issued under Companies (Indian Accounting Standards) Rules,
2016 as amended up to date.
In view of the interwoven/intermix nature of business and manufacturing facility, other segmental information is not ascertainable.
2.40 RELATED PARTY DISCLOSURES
Related party disclosures as required under Indian Accounting Standard (IndAS 24) on âRelated Party Disclosuresâ issued under Companies (Indian Accounting Standards) Rule 2016, as amended upto date, are given below: -
2.41 DERIVATIVES
Currency derivatives
The Company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts and currency options is governed by Company''s strategy. The Company does not use forward contracts and currency options for speculative purposes.
2.47 Corporate Social Responsibility Expenses
Donation includes an amount of Rs.14.06 million (Previous Year Rs.13.53 millions) incurred by the Company on Corporate Social Responsibility (CSR) activities during the year, in addition to Rs.6.74 million (Previous Year Rs.8.81 millions) capital expenditure incurred on power plant which is also eligible for CSR activities. In totality the Company incurred Rs.20.80 million (Previous Year Rs.22.34 millions) on CSR activities against the requirement of Rs.13.67 million (Previous Year Rs.15.44 millions).
2.48 The Company has re-grouped previous year''s figures to conform to current year''s classification.
2.43 Other Borrowing Costs include gain on account of foreign exchange fluctuation (net) amounting to Rs. 46.55 million (Previous Year net gain of Rs.115.08 millions).
2.44 Fixed Deposits with Banks include an amount of Rs.2.61 million (Previous Year Rs.86.77 millions) on account of FDRs held as Margin Money.
Mar 31, 2015
1.1 SECURED LOANS
I. Term Loans from various banks are secured by way of First Pari
Passu Charge on all the fixed assets of the Company and further secured
by way of Second Pari Passu Charge on all the current assets of the
Company and personal guarantee of directors/relative of a director
namely Sh. Sanjiv Goyal and Sh.Aryan Goyal.
II. Corporate Loans from Financial Institution are secured by way of
First PariPassu Charge on all the fixed assets of the Company and
further secured by way of Second PariPassu Charge on all the current
assets of the Company and personal guarantee of directors/ relative of
a director namely Sh.Sanjiv Goyal and Sh.Aryan Goyal
Repayment Schedule of Term Loans:
Year of Repayment Amount (Rs. In Millions)
1-2 755.21
2-5 1773.87
>5 114.51
Term Loans availed by the Company, include term loans from various
Banks/Financial Institutions.
Other Loans comprise of Vehicle Loans which are secured against
Hypothecation of respective vehicles.
Repayment Schedule of Vehicle Loans:
Year of Repayment Amount (Rs. In Millions)
1-2 3.53
2-5 7.94
>5 0.24
III. Working Capital Limits are secured by way of First PariPassu
Charge On all the current assets of the Company and further secured by
way of Second PariPassu Charge on all the fixed assets of the Company
and personal guarantee of directors/relative of a director namely
Sh.Sanjiv Goyal and Sh.Aryan Goyal.
1.2 DEPRECIATION
In terms of Schedule II to the Companies Act, 2013 read together with
Accounting Standard 6 (AS- 6) "Depreciation Accounting", the management
of the Company has applied the estimated useful lives as specified in
Schedule II with effect from 1'April, 2014, as disclosed in Accounting
Policy on Fixed Assets and Depreciation. In terms of these evaluations,
the useful lives of certain assets required changes from their previous
estimates. As a result, the charge for depreciation in respect of fixed
assets held as at 1'April, 2014 is lower by Rs. 143.51million for the
year ended 31st March, 2015. Further, the written down value of Fixed
Assets where the remaining useful life of the assets was determined to
be nil as at 1'April, 2014 has been adjusted in the opening balance of
Profit and Loss Account under Reserves and Surplus (net of deferred tax
of Rs. 154.78 million)aggregating to Rs. 322.27million.
1.3 CURRENT ASSETS, LOANS & ADVANCES
a) During the month of March 2015, there was a fire in one of the
production facilities of the Company (Unit I), which affected stock of
goods as well as a part of fixed assets of the Company. The Company has
intimated insurance company about the fire and the insurance company
appointed surveyor to assess the extent of damage caused by the said
fire. The Company is in the process of filing claim for the said loss
and no financial impact of the same has been taken in the books of
accounts for the year ended 31.03.2015, pending completion of work by
the surveyor. The management of the Company is of the opinion that the
loss caused by the said fire is completely recoverable by the insurance
claim to be filed and the shortfall, if any, would not have any
material impact on the financials of the Company. The statutory
auditors have relied upon the opinion of the management in this regard.
b) In the opinion of the management of the Company, the current assets,
loans and advances are approximately of the value as stated, if
realized in the ordinary course of business and are subject to
confirmation/reconciliation.
1.4 CURRENT LIABILITIES
I. The principal amount remaining unpaid as at 31st March 2015 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" was Rs. 12.33 million (previous year
Rs. 11.64 millions). The interest amount computed based on the
provisions under Section 16 of the MSMED Act Rs. 1.33million (previous
year Rs. 0.52 million) remained unpaid as at 31st March 2015. The
principal amount that remained unpaid as at 31st March 2014 was paid
during the year. The list of undertakings covered under MSMED Act was
determined by the Company on the basis of information available with
the Company and have been relied upon by the statutory auditors.
II. Investor Education and Protection Fund
Other liabilities include Rs. 0.49 million (previous year Rs. 0.37
million) which relate to unclaimed dividend and share application money
refundable. During the year, an amount of Rs. 0.04 million (Previous
Year Nil) relating to unclaimed dividend and share application money
refundable, which became due for deposit to Investor Education and
Protection Fund, has been duly deposited.
1.5 CONTINGENT LIABILITIES AND COMMITMENTS
S.No. Particulars 31.03.2015 31.03.2014
a) Contingent Liabilities
i) Claims not acknowledged as debts:-*
-Income Tax matters** 5.97 18.47
-Excise matters*** 112.95 111.45
-Service Tax matters***** 16.22 13.95
-ESI matters - 3.54
ii) Bank Guarantees 11.75 9.22
iii) Bills Discounted 80.70 105.55
iv) Letter of Credit (Foreign/Inland) 249.75 171.77
v) Other money for which Company is
contingently liable
a) Differential amount of custom 19.11 0.39
duty in respect of machinery
imported under EPCG Scheme
b) Commitments
i) Estimated amount of contracts 7.80 8.71
remaining to be executed on
capital account and not provided
for (net of advance)
* The matters are subject to legal proceedings in the ordinary course
Of business. In the opinion of the management, legal proceedings for
above cases, when ultimately concluded will not have a material effect
on the results of operation or financial position of the company.
** Amount deposited under protest Rs. 3.01 million
*** Amount deposited under protest Rs. 14.58 million
**** Amount deposited under protest Rs. 2.08 million
1.6 INCOMETAX
Current Tax
Provision for Current Income Tax has been made as per Income-tax Act,
1961, based on legal opinion obtained by the Company from its income
tax consultant and the statutory auditors have relied upon the said
legal opinion for the purpose of current income tax.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
for Taxes on Income" issued under Companies Accounting standards) Rule
2006, as amended upto date, the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 137.78
million(Previous Year Rs.161.37 million) and it has been recognized in
the Statement of Profit & Loss. In accordance with clause 29 of
Accounting Standard (AS 22) Deferred Tax Assets and Deferred Tax
Liabilities have been set off.
1.7 LEASES
Operating leases are mainly in the nature of lease of office premises
with no restrictions and are renewable/ cancellable at mutual consent.
There are no restrictions imposed by lease arrangements. There are no
sub leases.
Lease payments recognized in the Statement of Profit & Loss are
Rs.12.ia million (Previous Year Rs. 11.45 millions).
1.8 DEFERRED REVENUE EXPENDITURE:
During the year, Company incurred an amount of Rs. 359.12 million on
product development, product approval, US FDA Fees, Abbreviated New
Drug Application (ANDA) Fees and such other related research and
development expenses, recognized as deferred revenue expenditure in the
books of accounts, and the same is amortized on a straight line basis
over a period of succeeding five years.
1.9 Other Income during the year includes an amount of Rs. 148.45
million on account of additional compensation including interest
received from Greater Mohali Area Development Authority (GMADA). Since
GMADA has filed an appeal in the Punjab & Haryana High Court, hence the
compensation has been accounted for in the year of receipt.
1.10 EMPLOYEE RETIREMENT BENEFITS
1. Benefits valued: Gratuity & Earned leave (both availment &
encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated
absence Liabilities are unfunded
3. Valuation method: Projected Unit Credit Method
1.11 SEGMENT REPORTING
i) Primary Segment (Business Segment)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged are governed by the same set of risks
and reward. As such the activities are identified as single segment in
accordance with the Accounting Standard (AS-17) issued under Companies
(Accounting Standards)Rule 2006 as amended up to date.
1.12 RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under Companies (Accounting
Standards) Rule 2006,as amended upto date , are given below:-
a) Relationship
i) Subsidiary Companies
Nectar Lifesciences UK Limited, United Kingdom*
Nectar Lifesciences USA, LLC (incorporated on 29th Oct, 2014)*
*No transactions during the financial year 2014-15
ii) Joint Ventures and Associates
None
iii) Key Management Personnel (Managing Director/Whole-time
directors/CFO/Company Secretary)
Sh.Sanjiv Goyal
Sh. Aryan Goyal (till 11th Nov, 2014)
Sh.DineshDua
Sh.Harprakash Singh Gill
Sh. Sandeep Goel
Sh. Sunder Lai
iv) Relatives of the Key Management Personnel**
Sh.Saurabh Goyal
Sh. Aryan Goyal (w.e.f 12th Nov, 2014)
** With whom the company had transactions during the year.
v) Entities over which key management personnel/their relatives are
able to exercise significant influence*
Surya Narrow Fabrics
Nectar Lifestyles Private Limited
Nectar Organics Private Limited
Nectar Lifesciences Charitable Foundation
* With whom the company had transactions during the year.
1.13 DERIVATIVES
Currency derivatives
The Company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. The use of foreign currency forward contracts and
currency options is governed by Company's strategy. The Company does
not use forward contracts and currency options for speculative
purposes.
1.14 Other Borrowing Costs include loss on account of foreign exchange
fluctuation (net) amounting to Rs.27.64 millions(Previous Year net loss
of Rs. 147.06 millions)
1.15 Corporate Social Responsibility Expenses
Donation includes an amount of Rs. 11.82 million incurred by the
Company on Corporate Social Responsibility (CSR) activities during the
year, in addition to Rs 24.51 million capital expenditure incurred on
power plant which is also eligible for CSR activities. In totality the
Company incurred Rs. 36.33 million on CSR activities against the
requirement of Rs. 18.64 million.
1.16 The Company has re-grouped previous year's figures to conform to
current year's classification.
Mar 31, 2014
SECURED LOANS
Term Loans from various banks are secured by way of First Pari Passu
Charge on all the fixed assets of the Company and further secured by
way of Second Pari Passu Charge on all the current assets of the
Company and personal guarantee of directors namely Sh. Sanjiv Goyal &
Sh. Aryan Goyal.
Corporate Loans are secured by way of First Pari Passu Charge on all
the current assets of the Company and further secured by way of Second
Pari Passu Charge on all the fixed assets of the Company and personal
guarantee of directors namely Sh. Sanjiv Goyal & Sh. Aryan Goyal.
II. Working Capital Limits are secured by way of First Pari Passu
Charge on all the current assets of the Company and further secured by
way of Second Pari Passu Charge on all the fixed assets of the Company
and personal guarantee of directors namely Sh. Sanjiv Goyal & Sh. Aryan
Goyal.
FIXED ASSETS
A sum of Rs. 560.50 millions (previous year Rs. 358.41 Millions) has
been capitalized under the head Plant & Machinery (Research &
Development). The company has been regularly working on modernization
and development of its existing technological system and development of
new products & processes. As such, there has been loss of capacity
utilization because of the development of new product and processes. In
the opinion of management, the above process will yield benefits in the
coming years in the shape of more demand in the international market as
well as better price.
CURRENT ASSETS, LOANS & ADVANCES
In the opinion of the management of the Company, the current assets,
loans and advances are approximately of the value as stated, if
realized in the ordinary course of business.
CURRENT LIABILITIES
I. The principal amount remaining unpaid as at 31st March 2014 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" are Rs. 11.64 millions (previous
year Rs. 6.56 millions). The interest amount computed based on the
provisions under Section 16 of the MSMED Act Rs. 0.52 millions
(previous year Rs 0.13 millions) is remaining unpaid as of 31st March
2014. The principal amount that remained unpaid as at 31st March 2013
was paid during the year. The list of undertakings covered under MSMED
Act was determined by the Company on the basis of information available
with the Company and have been relied upon by the auditors.
II. Investor Education and Protection Fund
Other liabilities include Rs. 0.37 million (previous year Rs. 0.34
million) which relates to unclaimed dividend and share application
money refundable. Out of it, no amount has become due for deposit to
Investor Education and Protection Fund as at balance sheet date.
During the year, an amount of Nil (Previous Year Rs. 0.28 million)
relating to unclaimed dividend and share application money refundable,
which became due for deposit to Investor Education and Protection Fund,
has been duly deposited.
CONTINGENT LIABILITIES AND COMMITMENTS
(Rs. in millions)
S.No. Particulars 31.03.2014 31.03.2013
a) Contingent Liabilities
i) Claims not acknowledged as debts **
* Income Tax matters 18.47 5.97
* Excise matters 111.45 108.06
* Service Tax matters 13.95 13.93
* ESI matters 3.54 3.54
ii) Bank Guarantees 9.22 8.70
iii) Bills Discounted 105.55 144.41
iv) Letter of Credit (Foreign / Inland) 171.77 398.01
v) Other money for which Company is contingently
liable
a) Differential amount of custom duty in respect
of machinery imported under EPCG Scheme 0.39 0.29
b) Commitments
i) Estimated amount of contracts remaining to be
executed on capital account and not provided
for (net of advance) 8.71 53.81
** The matters are subject to legal proceedings in the ordinary course
of business. In the opinion of the management, legal proceedings for
above cases, when ultimately concluded will not have a material effect
on the results of operation or financial position of the company.
INCOME TAX
Current Tax
Provision for Income tax has been made as per Income-tax Act, 1961.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
for Taxes on Income" issued under Companies (Accounting standards) Rule
2006,as amended upto date, the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 161.37 million
(Previous Year Rs. 327.34 million) and it has been recognized in the
Statement of Profit & Loss. In accordance with clause 29 of Accounting
Standard (AS 22) Deferred Tax Assets and Deferred Tax Liabilities have
been set off.
LEASES
Operating leases are mainly in the nature of lease of office premises
with no restrictions and are renewable/ cancellable at mutual consent.
There are no restrictions imposed by lease arrangements. There are no
sub leases.
Lease payments recognized in the Statement of Profit & Loss are Rs.
11.45 millions (Previous Year Rs. 8.73 millions).
EMPLOYEE RETIREMENT BENEFITS
1. Benefits valued: Gratuity & Earned leave (both availment &
encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated
absence liabilities are unfunded
3. Valuation method: Projected Unit Credit Method
SEGMENT REPORTING
Primary Segment (Business Segment)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged are governed by the same set of risks
and reward. As such the activities are identified as single segment in
accordance with the Accounting Standard (AS-17) issued under Companies
(Accounting Standards) Rule 2006 as amended upto date.
RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under Companies (Accounting
Standards) Rule 2006,as amended upto date , are given below : -
a) Relationship
i) Subsidiary Companies
Nectar Life sciences UK Limited, United Kingdom.
ii) Joint Ventures and Associates
None
iii) Key Management Personnel (Managing Director/Whole-time directors)
Sh. Sanjiv Goyal Sh. Aryan Goyal
Sh. Dinesh Dua (appointed w.e.f. 14th Oct., 2013)
Sh. Saurabh Goyal(upto 10th Feb., 2014)
Sh. Harprakash Singh Gill
iv) Relatives of the Key Management Personnel*
Sh. Saurabh Goyal (w.e.f 11th Feb., 2014)
* With whom the company had transactions during the year.
v) Entities over which key management personnel/their relatives are
able to exercise significant influence*
Surya Narrow Fabrics - New Delhi
Nectar Lifestyles Private Limited- New Delhi
DERIVATIVES
Currency derivatives
The Company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. The use of foreign currency forward contracts and
currency options is governed by Company''s strategy. The Company does
not use forward contracts and currency options for speculative
purposes.
Mar 31, 2013
1.1 FIXED ASSETS
A sum of Rs. 358.41 millions (previous year Rs. 454.44 millions) has
been capitalized under the head Plant & Machinery (Research &
Development). The company has been regularly working on modernization
and development of its existing technological system and development of
new products & processes. As such, there has been loss of capacity
utilization because of the development of new product and processes. In
the opinion of management, the above process will yield benefits in the
coming years in the shape of more demand in the international market as
well as better price.
1.2 CURRENT ASSETS, LOANS & ADVANCES
Intheopinionofthe management of the Company, the current assets,
loansandadvancesareapproximatelyofthevalueas stated, if realized in the
ordinary course of business.
1.3 CURRENTUABILITIES
I. The principal amount remaining unpaid as at 31st March 2013 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" are Rs. 6.56 millions (previous year
Rs. 1.59 millions). The interest amount computed based on the
provisions under Section 16 of the MSMED Act Rs. 0.13 millions
(previous year Rs 0.05 millions) is remaining unpaid as of 31" March
2013. The principal amount that remained unpaid as at 31* March 2012
was paid during the year. The list of undertakings covered under MSMED
Act was determined by the Company on the basis of information available
with the Company and have been relied upon by the auditors.
II. Investor Education and Protection Fund
Other liabilities include Rs. 0.34 million (previous year Rs. 0.88
million) which relates to unclaimed dividend and share application
money refundable. Out of it, no amount has become due for deposit to
Investor Education and Protection Fund as at balance sheet date.
During the year, an amount of Rs.0.28 million relating to unclaimed
dividend and share application money refundable, which
becameduefordeposittolnvestorEducationand Protection Fund, has been
duly deposited.
1.4 CONTINGENTUABIUTIESANDCOMMITMENTS
(Rs. in millions)
Particulars 31.03.2013 31.03.2012
a] Contingent Liabilities
1 Claims not acknowledged
as debts:-
-Income Tax matters 5.97 5.97
-Excise matters 108.06 4.16
-Service Tax matters 13.93 13.35
-ESI matters 3.54 Nil
j Bank Guarantees
Bills Discounted 144.41
Letter of Credit (Foreign /Inland)
vj Other money for which Company is contingently liable
a) Differential amount of custom duty in respect
of machinery imported under EPCG Scheme 0.29 1.80
Commitments
1 Estimated amount of contracts remaining to be sTTi 104^1
executed on capital account and not provided for (net of advance)
1.5 INCOME TAX
CurrentTax
Provision for Income tax has been made as per Income-tax Act, 1961.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
for Taxes on Income" issued under Companies (Accounting standards) Rule
2006, as amended upto date , the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 327.34 million
(Previous Year Rs. 122.16 million) and it has been recognized in the
Statement of Profit & Loss. In accordance with clause 29 of Accounting
Standard (AS 22) Deferred Tax Assets and Deferred Tax Liabilities have
been set off.
1.6 LEASES
Operating leases are mainly in the nature of lease of office premises
with no restrictions and are renewable/cancellable at mutual consent.
There are no restrictions imposed by lease arrangements. There are no
sub leases. Lease payments recognized in the Statement of Profit &
Loss are Rs. 8.73 millions (Previous Year Rs. 8.41 millions).
1.7 EMPLOYEE RETIREMENT BENEFITS
1. Benefitsvalued:Gratuity&Earnedleave(bothavailment&encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated
absence liabilitiesare unfunded
3. Valuation method: Projected Unit Credit Method
1.8 SEGMENT REPORTING
i) Primary Segment (Business Segment)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged are governed by the same set of risks
and reward. As such the activities are identified as single segment in
accordance with the Accounting Standard (AS-17) issued under Companies
(AccountingStandards)Rule2006,asamendeduptodate.
1.9 RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under
Companies(AccountingStandards)Rule2006,asamendeduptodate,aregivenbelow:-
a) Relationship
i) Subsidiary Companies
Nectar Capital Limited, Mauritius-Wound upon 3''d August, 2012 Nectar
Lifesciences UK Limited, United Kingdom.
ii) Joint Ventures and Associates
None
iii) Key Management Personnel (Managing Director/Whole-time directors)
Sh.SanjivGoyal
Sh. Aryan Goyal
Sh. Dinesh Dua (resigned w.e.f. 31stJuly 2012)
Sh.Saurabh Goyal
Sh. Harprakash Singh Gill (appointed w.e.f. 1st Nov, 2012)
iv) Relatives of the Key Management Personnel *
None
*Withwhomthecompanyhadtransactionsduringtheyear.
v) Entities over which key management personnel/their relatives are
able to exercise significant influence *
Surya Narrow Fabrics- New Delhi
Nectar Lifestyles Private Limited- New Delhi
Nectar Organics Private Limited - New Delhi
*Withwhomthecompanyhadtransactionsduringtheyear.
1.10 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBS)
The FCCBs were redeemed fully in USD during the previous financial year
on 26* April, 2011 at 150.71 per cent of their principal amount. The
FCCBs premium payable on redemption for the previous financial year
2011-12 as well as for the year 2010-11 were charged to Statement of
Profit & Loss. However, in the year 2011-12, expenses relating to the
period ended 31st March2010were charged to the Profit and Loss under
Reserves & Surplus and reversed from Securities Premium Account.
1.11 DERIVATIVES
Currencvderivatives
TheCompanyusesforeign currency forward
contractsandcurrencyoptionstohedgeitsrisksassociated with foreign
currency fluctuations relating to certain firm commitments and
forecasted transactions. The use of foreign currency forward contracts
and currency options is governed by Company''s strategy. The Company
does not use forward contracts and
currencyoptionsforspeculativepurposes.
1.12 Other Borrowing Costs include gain on account of foreign exchange
fluctuation (net) amounting to Rs. 221.25 millions
(Previous Year loss ofRs. 141.23 millions)
1.13 The Company has re-grouped previous year''s figures to conform to
current year''s classification.
Mar 31, 2012
1.1 SECURED LOANS
I. Term Loans from various banks are secured by way of First Pa ri
Passu Charge on all the fixed assets of the Company and further secured
by way of Second Pari Passu Charge on all the current assets of the
Company and personal guarantee of directors namely Sh. Sanjiv Goyal &
Sh. Aryan Goyal.
Other Loans comprise of Vehicle Loans which are secured against
hypothecation of respective vehicles.
Repayment Schedule of Vehicle Loans :
II. Working Capital Limits & Corporate Loans are secured by way of
First Pari Passu Charge on all the current assets of the Company and
further secured by way of Second Pari Passu Charge on all the fixed
assets of the Company and personal guarantee of directors namely Sh.
Sanjiv Goyal & Sh. Aryan Goyal.
1.2 FIXED ASSETS
A sum of Rs. 454.44 millions (previous year Rs.368.90 millions) has
been capitalized under the head Plant & Machinery (Research &
Development). The company has been regularly working on modernization
and development of its existing technological system and development of
new products & processes. As such, there has been loss of capacity
utilization because of the development of new product and processes. In
the opinion of management, the above process will yield benefits in the
coming years in the shape of more demand in the international market as
well as better price.
1.3 CURRENT ASSETS, LOANS & ADVANCES
In the opinion of the management of the Company, the current assets,
loans and advances are approximately of the value as stated, if
realized in the ordinary course of business.
1.4 CURRENT LIABILITIES
I. The principal amount remaining unpaid as at 31 March 2012 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" are Rs. 1.59 millions (previous year
Rs. 1.32 millions). The interest amount computed based on the
provisions under Section 16 of the MSMED Act Rs. 0.05 millions
(previous year Rs 0.03 millions) is remaining unpaid as of 31st March
2012. The principal amount that remained unpaid as at 31st March 2011
was paid during the year. The list of undertakings covered under MSMDA
was determined by the Company on the basis of information available
with the Company and have been relied upon by the auditors.
II. Investor Education and Protection Fund
Other liabilities include Rs. 0.88 million (previous year Rs. 0.81
millions) which relates to unclaimed dividend and share application
money refundable. Out of it, no amount has become due for deposit to
Investor Education and Protection Fund as at balance sheet date.
1.5 CONTINGENT LIABILITIES AND COMMITMEN TS
(Rs. in millions)
S.
No. Particulars 31.03.2012 31.03.2011
a) Contingent Liabilities
i) Claims not acknowledged as
debts:- **
- Income Tax matters 5.97 26.59
- Excise matters 4.16 -
- Service Tax matters 13.35 -
ii) Bank Guarantees 26.84 4.50
iii) Bills Discounted 583.78 39.95
iv) Letter of Credit (Foreign /
Inland) 560.00 482.40
v) Other money for which
Company is contingently liable
a) Differential amount of
custom duty in respect of
machinery imported under EPCG Scheme 1.80 38.08
b) Commitments
i) Estimated amount of contracts
remaining to be 104.91 292.44
executed on capital account and
not provided
for (net of advance)
** The matters are subject to legal proceedings in the ordinary course
of business. The legal proceedings, when ultimately concluded will not,
in the opinion of management, have a material effect on the results of
operation or financial position of the company.
1.6 INCOME TAX
Current Tax
Provision for Income tax has been made as per Income-tax Act, 1961.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
for Taxes on Income" issued under Companies (Accounting standards) Rule
2006, as amended upto date , the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 122.16 million
(Previous Year Rs 6.20 million) and it has been recognized in the
Profit & Loss Account. In accordance with clause 29 of Accounting
Standard (AS 22) Deferred Tax Assets and Deferred Tax Liabilities have
been set off.
1.7 LEASES
Operating leases are mainly in the nature of lease of office premises
with no restrictions and are renewable/ cancellable at mutual consent.
There are no restrictions imposed by lease arrangements. There are no
sub leases. Lease payments recognized in the profit and loss account
are Rs. 8.49 millions (Previous Year Rs. 7.14 millions).
1.8 EMPLOYEE RETIREMENT BENEFITS
1. Benefits valued: Gratuity & Earned leave (both availment &
encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated
absence liabilities are unfunded
3. Valuation method: Projected Unit Credit Method
1.9 SEGMENT REPORTING
i) Primary Segment (Business Segment)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged are governed by the same set of risks
and reward. As such the activities are identified as single segment in
accordance with the Accounting Standard (AS-17) issued under Companies
(Accounting Standards) Rule 2006, as amended upto date.
In view of the interwoven / intermix nature of business and
manufacturing facility, other segmental information is not
ascertainable.
1.10 RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under Companies (Accounting
Standards) Rule 2006, as amended upto date , are given below: - a)
Relationship
i) Subsidiary Companies
Chempharma Private Limited, Sri Lanka - Wound up during the previous
year
Nectar Capital Limited, Mauritius - Incorporated on 27th May, 2010
Nectar Lifesciences UK Limited, United Kingdom - Incorporated on 1st
March, 2011.
ii) Joint Ventures and Associates None
iii) Key Management Personnel (Managing Director/Whole-time directors)
Sh. Sanjiv Goyal Sh. Aryan Goyal Sh. Dinesh Dua*
Sh. Saurabh Goyal *(resigned w.e.f. 31st July 2012)
iv) Relatives of the Key Management Personnel
Smt. Raman Goyal
v) Entities over which key management personnel/their relatives are
able to exercise significant influence
Surya Narrow Fabrics - New Delhi Nectar Lifestyle Limited- New Delhi
Nectar Organics Ltd. - New Delhi
1.11 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBS)
During the year 2006-2007, the Company raised Zero Coupon FCCBs
aggregating USD 35 million (Rs. 1563.50 Million as on the date of the
issue) for financing its capital expenditure and other permitted
expenditure. The bond holders had the option to convert the FCCBs into
equity shares of the company at an initial conversion price of Rs.
25.996 per share at a fixed rate of exchange on conversion Rs. 44.6725
per USD, at any time on and after 4th June, 2006 but prior to 16th
April 2011. Further the Company has an option of early redemption of
these FCCBs in whole at any time on or after 25th April, 2009 but prior
to 26th April, 2011, subject to certain conditions. During the year
2007-2008, FCCBs amounting to Rs. 86.34 millions (USD 20 millions) were
converted into Equity Capital. The balance FCCBs were redeemed in USD
on 26th April, 2011 at 150.71 per cent of their principal amount.
The FCCBs premium payable on redemption for the current fina ncial year
2011-12 as well as for the previous financial year 2010-11 has been
charged to Profit & Loss Account. In earlier years upto 2009-10, the
same was charged to Securities Premium Account, due to uncertainty, as
the bond holders had the option to convert the FCCBs into equity shares
of the company. However, in the current financial year, expenses
relating to the period ended 31 st March 2010 were charged to the
Profit and Loss under Reserves & Surplus and reversed from Securities
Premium Account.
1.12 DERIVATIVES
Currency derivatives
The Company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. The use of foreign currency forward contracts and
currency options is governed by Company's strategy. The Company does
not use forward contracts and currency options for speculative
purposes.
1.13 Other Borrowing Costs include losses on account of foreign
exchange fluctuation (net) amounting to Rs. 18.68 millions (Previous
Year gain of Rs. 10.45 millions)
1.14 Due to applicability of Revised Schedule VI with effect from
current financial year, the Company has reclassified previous year's
figures to conform to this year's classification.
Mar 31, 2011
A. BALANCE SHEET
1. SECURED LOANS
I. Term Loans from various banks (excluding vehicle loans) are secured
by way of First Pari Passu Charge on all the fixed assets of the
Company and further secured by way of Second Pari Passu Charge on all
the current assets of the Company and personal guarantee of directors
namely Sh. Sanjiv Goyal & Sh. Aryan Goyal. Amount repayable within one
year Rs. 838.11 millions (Previous Year Rs. 557.16 millions).
II. Working Capital Limits & Corporate Loans are secured by way of
First Pari Passu Charge on all the current assets of the Company and
further secured by way of Second Pari Passu Charge on all the fixed
assets of the Company and personal guarantee of directors namely Sh.
Sanjiv Goyal & Sh. Aryan Goyal.
2. UNSECURED LOANS
Amount repayable within one year on vehicle loans is Rs. 3.02 millions
(Previous Year Rs. 5.08 millions) and on FCCBs Rs. 1471.38 millions
(Previous Year Nil.)
3. FIXED ASSETS
A sum of Rs. 368.90 millions (previous year Rs.149.30 millions) has
been capitalized under the head Plant & Machinery (Research &
Development). The company has been regularly working on modernization
and development of its existing technological system and development of
new products & processes. As such, there has been loss of capacity
utilization because of the development of new product and processes. In
the opinion of management, the above process will yield benefits in the
coming years in the shape of more demand in the international market as
well as better price.
4. INVESTMENTS
Investments are classified into current and long term investments. Long
Term Investments are stated at cost and provision for diminution in
value is made if decline is other than temporary in the opinion of the
management. Current investments are valued at cost and provision is
made for decline in market value.
5. CURRENT ASSETS, LOANS & ADVANCES
In the opinion of the management of the Company, the current assets,
loans and advances are approximately of the value as stated, if
realized in the ordinary course of business.
6. CURRENT LIABILITIES
i) The principal amount remaining unpaid as at 31st March 2011 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" was Rs. 1.32 millions (previous year
Rs. 1.84 millions). The interest amount computed based on the
provisions under Section 16 of the MSMED Act amounting to Rs. 0.03
millions (previous year Rs 0.31 millions) was remaining unpaid as of
31st March 2011. The principal amount that remained unpaid as at 31st
March 2010 was paid during the year. The list of undertakings covered
under MSMDA was determined by the Company on the basis of information
available with the Company and have been relied upon by the auditors.
ii) Investor Education and Protection Fund
Other liabilities include Rs. 0.81 million (previous year Rs. 0.86
millions) which relates to unclaimed dividend and share application
money refundable. Out of it no amount has become due for deposit to
Investor Education and Protection Fund as at balance sheet date.
7. UTILISATION OF FUNDS RAISED FROM GDR ISSUE AND PRIVATE EQUITY
In February 2010, the company allotted 26.00 million equity shares
having face value of Re.1 each on preferential basis and 46.00 million
equity shares having face value of Re.1 each underlying Global
Depository Receipts (GDRs) to the institutional investors. The
aggregate funds raised by such issue (including securities premium)
were Rs. 2412.89 million (net of share issue expenses of Rs.108.24
million). The equity shares represented by the GDRs/private placement
carry equivalent rights with respect to voting and dividends as the
ordinary equity shares. The company had utilized the funds for the
purpose these were raised and the residual amount has been temporarily
parked in Mutual Funds and various bank accounts of the Company.
8. CONTINGENT LIABILITIES
(Rs. in millions)
S.No. Particulars 31.03.2011 31.03.2010
i) Letter of Credit (Foreign / Inland) 482.40 307.25
ii) Bank Guarantees 4.50 5.12
iii) Bills Discounted 39.95 149.37
iv) Differential amount of custom duty in
respect of 38.08 74.23
machinery imported under EPCG Scheme
v) Claims not acknowledged as debts:- **
-Income Tax matters 26.59 31.32
vi) Estimated amount of contracts remaining to
be executed on 292.44 7.95
capital account and not provided for
(net of advance)
** The matters are subject to legal proceedings in the ordinary course
of business. The legal proceedings, when ultimately concluded will not,
in the opinion of management, have a material effect on the results of
operation or financial position of the company.
3. Sales Tax Assessments for earlier years are in progress. No sales
tax liability exists as on Balance Sheet date.
4. Income Tax
Current Tax
Provision for Income tax has been made as per Income-tax Act, 1961.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
on Taxes on Income" issued under Companies (Accounting standards) Rule
2006, as amended upto date , the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 6.20 million
(Previous Year Rs 100.02 million) and it has been recognized in the
Profit & Loss Account. In accordance with clause 29 of Accounting
Standard (AS 22) Deferred tax Assets and Deferred tax liabilities have
been set off.
6. Leases:
Operating leases are mainly in the nature of lease of office premises
with no restrictions and are renewable/ cancelable at mutual consent.
There are no restrictions imposed by lease arrangements. There are no
sub leases.
Lease payments recognized in the profit and loss account are Rs. 7.14
millions ( Previous Year Rs. 6.77 millions).
7. Employee Benefits:
1. Benefits valued: Gratuity & Earned leave (both availment &
encashment)
2. Nature of the plans: Defined benefit; both gratuity & compensated
absence liabilities are unfunded
3. Valuation method: Projected Unit Credit Method
9. Miscellaneous Income of Rs 125 Millions represents the income
earned by the company out of real estate activities. The income was
offered for taxation u/s 132 to the Income Tax Authorities as
additional income.
C. SEGMENT REPORTING
i) Primary Segment (Business Segment)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged are governed by the same set of risks
and reward. As such the activities are identified as single segment in
accordance with the Accounting Standard (AS-17) issued under Companies
(Accounting standards) Rule 2006, as amended upto date.
D. RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under Companies (Accounting
standards) Rule 2006, as amended upto date , are given below: -
1. Relationship
i) Subsidiary Companies
Chempharma Private Limited à Sri Lanka à Wound up during the year
Nectar Capital Limited à Mauritius à Incorporated on 27th May, 2010
Nectar Lifesciences UK Limited à United Kingdom à Incorporated on 1st
March, 2011
ii) Joint Ventures and Associates
None
iii) Key Management Personnel (Managing Director/Whole-time directors)
Sh. Sanjiv Goyal
Sh. Aryan Goyal
Sh. Dinesh Dua
Sh. Saurabh Goyal*
* appointed w.e.f. 11th August, 2010
iv) Relatives of the Key Management Personnel
Smt. Raman Goyal
Sh. Saurabh Goyal*
* appointed w.e.f. 11th August, 2010
v) Entities over which key management personnel/their relatives are
able to exercise significant influence*
Surya Narrow Fabrics à New Delhi
Nectar Lifestyle Limited- New Delhi
Nectar Organics Ltd. Ã New Delhi
* With whom the company had transactions during the year.
E. Foreign Currency Convertible Bonds (FCCBs)
During the year 2006-2007, the company raised Zero Coupon FCCB
aggregating to USD 35 million (Rs. 1563.50 Million as on the date of
the issue) for financing its capital expenditure and other permitted
expenditure. The bond holders, had the option to convert the FCCBs into
equity shares of the company at an initial conversion price of Rs.
25.996 per share at a fixed rate of exchange on conversion Rs. 44.6725
per USD, at any time on and after 4th June, 2006 and prior to 16th
April 2011. Further the company has an option of early redemption of
these FCCBs in whole at any time on or after 25th April, 2009 but prior
to 26th April, 2011, subject to certain conditions. During the year
2007-2008, FCCBs amounting to Rs. 86.34 millions (USD 20 millions) were
converted into Equity Capital. The Balance FCCBs were redeemed in USD
on 26th April, 2011 at 150.71 per cent of their principal amount.
The FCCBs premium payable on redemption for the current year has been
charged to Profit & Loss account. In earlier years, the same was
charged to Securities Premium Account, due to uncertainty, as the bond
holders had the option to convert the FCCBs into equity shares of the
company.
F. DERIVATIVES
CURRENCY DERIVATIVES
The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. The use of foreign currency forward contracts and
currency options is governed by Company's strategy. The company does
not use forward contracts and currency options for speculative
purposes.
I. IMPAIRMENT OF ASSETS
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the carrying value of future cash flows
expected to arise from the continuing use of the assets and its
eventual disposal. The impairment loss to be expensed is determined as
the excess of the carrying amount over the higher of the asset's net
sales price or present value as determined above.
Mar 31, 2010
A. BALANCE SHEET
1. SECURED LOANS
I. Term Loans from various banks (excluding vehicle loans) are secured
by way of First Pari Passu Charge on all the fixed assets of the
Company and further secured by way of Second Pari Passu Charge on all
the current assets of the Company and personal guarantee of directors
namely Sh. Sanjiv Goyal & Sh. Aryan Goyal.
II. Working Capital Limits & Corporate Loans are secured by way of
First Pari Passu Charge on all the current assets of the Company and
further secured by way of Second Pari Passu Charge on all the fixed
assets of the Company and personal guarantee of directors namely Sh.
Sanjiv Goyal & Sh. Aryan Goyal.
III. Term Loan includes Vehicle Loan amounting to Rs. 11.30 million
from various banks.
2. FIXED ASSETS
A sum of Rs.149.30 Millions has been capitalized under the head Plant &
Machinery (Research & Development). The company has been regularly
working on modernization and development of its existing technological
system and development of new products & processes. As such, there has
been loss of capacity utilization because of the development of new
product and processes. In the opinion of management, the above process
will yield benefits in the coming years in the shape of more demand in
the international market as well as better price.
3. INVESTMENTS
Investments are classified into current and long term investments. Long
Term Investments condered long term are stated at cost and current
investments are valued stated at cost or market value whichever is
less.
4. CURRENT ASSETS, LOANS & ADVANCES
In the opinion of the management of the Company, the current assets,
loans and advances are approximately of the value as stated, if
realized in the ordinary course of business.
5. CURRENT LIABILITIES
i) The principal amount remaining unpaid as at 31st March 2010 in
respect of enterprises covered under the "Micro, Small and Medium
Enterprises Development Act, 2006" are Rs. 1.84 millions (previous
year Rs. 2.93 millions). The interest amount computed based on the
provisions under Section 16 of the MSMEDAct Rs. 0.31 millions (previous
year Rs 0.33 millions) is remaining unpaid as of 31st March 2010. The
principal amount that remained unpaid as at 31st March 2009 was paid
during the year. The list of undertakings covered under MSMDA was
determined by the Company on the basis of information available with
the Company and have been relied upon by the auditors.
ii) Investor Education and Protection Fund
Other liabilities include Rs 0.86 million which relates to unclaimed
dividend and share application money refundable. Out of it no amount
has become due for deposit to Investor Education and Protection Fund as
on balance sheet date.
6. UTILISATION OF FUNDS RAISED ON GDR ISSUE AND PRIVATE EQUITY
In February 2010, the company allotted 26.00 million equity shares
having face value of Re.1 each on preferential basis and 46.00 million
equity shares having face value of Re.1 each underlying Global
Depository Receipts (GDRs) to the institutional investors. The
aggregate funds raised by such issue (including securities premium)
were Rs.2412.89 million (net of share issue expenses of Rs.108.24
million). The equity shares represented by the GDRs/private placement
carry equivalent rights with respect to voting and dividends as the
ordinary equity shares. Out of these funds, the company had invested
Rs.200.00 million in the Mutual Funds and the balance amount has been
parked in the various bank accounts of the company.
7. CONTINGENT LIABILITIES
(Rupees in Million)
S.No. Particulars March 31, March 31,
2010 2009
i) Letter of Credit (Foreign /
Inland) 307.25 571.58
ii) Bank Guarantees 5.12 6.78
iii) Bills Discounted 149.37 189.60
iv) Differential amount of custom
duty in respect of 78.31 86.61
machinery imported under
EPCG SCheme
v) Claims not acknowledged as
debts:**
- Income Tax matters 31.32 27.03
vi) Estimated amount of contracts
remaining to be executed on 7.95 19.15
capital account and not
provided for (net of advance)
** The matters are subject to legal proceedings in the ordinary course
of business. The legal proceedings, when ultimately concluded will not,
in the opinion of management, have a material effect on the results of
operation or financial position of the company.
iii) Sales Tax Assessments for earlier years are in progress. No sales
tax liability exists as on Balance Sheet date.
iv) Income Tax Current Tax Provision for Income tax and fringe benefit
tax, wherever applicable, has been made as per Income-tax Act, 1961.
Deferred Tax
In compliance with Accounting Standard (AS-22) relating to "Accounting
on Taxes on Income" issued under Companies (Accounting standards) Rule
2006, as amended upto date , the Company has provided Deferred Tax
Liability accruing during the year aggregating to Rs. 100.02 million
(Previous Year Rs 98.05 million) and it has been recognized in the
Profit & Loss Account. In accordance with clause 29 of Accounting
Standard (AS 22) Deferred tax Assets and Deferred tax liabilities have
been set off.
vi) Purchases include goods worth Rs. 725.10 millions (previous year
Rs. 396.74 million) purchased for trading.
vii) Leases Operating leases are mainly in the nature of lease
of office premises with no restrictions and are renewable/
cancelable at mutual consent.
There are no restrictions imposed by lease arrangements.
There are no sub leases.
Lease payments recognized in the profit and loss account are Rs. 6.77
millions( Previous Year Rs. 5.94 millions)
The company has not executed any finance lease.
C. SEGMENT REPORTING
Primary Segment (Business Segments)
The Company operates only in the business segment of "Pharmaceuticals
Products", and in the opinion of the management the inherent nature of
activities in which it is engaged a re governed by the same set of
risks and reward. As such the activities are identified as single
segment in accordance with the Accounting Standard (AS-17) issued under
Companies (Accounting
D. RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard (AS-18)
on "Related Party Disclosures" issued under Comp (Accounting standards)
Rule 2006, as amended up to date , are given below:
a) Relationship
i) Subsidiary Companies
M/s Chempharma Private Limited Sri Lanka
ii) Joint Ventures and Associates : NIL
iii) Key Management Personnel (Managing Director/Whole-time directors)
Sh. Sanjiv Goyal Sh. Aryan Goyal Sh. Dinesh Dua
iv) Relatives of the Key Management Personnel
Smt. Raman Goyal Sh. Saurabh Goyal
v) Entities over which key management personnel/their relatives are
able to exercise significant influence*
M/s Surya Narrow Fabrics New Delhi
M/s Nectar Lifestyle Limited- New Delhi
M/s Nectar Organics Ltd. New Delhi
* With whom the company had transactions.
E. Foreign Currency Convertible Bonds (FCCBs) During the year
2006-2007, the company raised Zero Coupon FCCB aggregating to USD 35
million (Rs. 1563.50 Million as on the date of the issue) for financing
its capital expenditure and other permitted expenditure. The bond
holders, have the option to convert the FCCBs into equity shares of the
company at an initial conversion price of Rs. 25.996 per share at a
fixed rate of th th exchange on conversion Rs. 44.6725 per US$, at any
time on and after 4 June, 2006 and prior to 16 April 2011. Further the
th th company has an option of early redemption of these FCCBs in whole
at any time on or after 25 April, 2009 and prior to 26 April, 2011,
subject to certain conditions. Unless previously converted, redeemed or
repurchased and cancelled, the FCCBs will th be redeemed in US$ on 26
April, 2011 at 150.71 per cent of their principal amount. The FCCBs
premium payable on redemption of Rs 109.56 million (previous year Rs.
227.28 million) being the pro-rata charge for the year have been made
on the gross value without adjusting any tax impact, have been adjusted
against Securities Premium account (SPA). In the event that the
conversion option is exercised by the holder of FCCBs in the future,
the amount of premium charged to Securities Premium account (SPA) will
be suitably adjusted in the respective year.
F. DERIVATIVES
CURRENCY DERIVATIVES
The company uses foreign currency forward contracts and
currency options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. The use of foreign currency forward contracts and
currency options is governed by Companys strategy. The company does
not use forward contracts and currency options for speculative
purposes.
L. IMPAIRMENT OF ASSETS
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the carrying value of future cash flows
expected to arise from the continuing use of the assets and its
eventual disposal. The impairment loss to be expensed is determined as
the excess of the carrying amount over the higher of the assets net
sales price or present value as determined above.
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