| 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. During the previous period, the company changed its accounting year
end to 31st March, 2014. Accordingly, the figures for the previous
period are for the fifteen months' period from 1st January, 2013 to
31st March, 2014 and are not comparable with those of the current year.
3. Previous period figures have been regrouped where necessary.
4. Contingent Liabilities
(a) Claims against the company not acknowledged as debts
Income-tax Matters - Matters decided against the company in respect of
which the company has
preferred an appeal 477,180,401 465,435,659
Fringe Benefits Tax Matter 128,412 128,412
Sales tax Matters 1,794,910 1,794,910
Customs Duty Matter - 536,200
Employee related Matters 7,356,925 7,745,017
Others 277,500 427,500
(b) Guarantees issued by Banks
on behalf of the company 15,955,097 11,595,694
Notes:
(i) Future cash outflows in respect of (a) above are determinable only
on receipt of judgements/decisions pending with various
authorities/forums and/or final outcome of the matters.
(ii) Future cash outflows in respect of (b) above are dependent on the
future performance of the obligations by the company and/or other
parties.
5. Commitments
(a) Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 1,225,398 (Previous period - Nil).
(b) Estimated amount of contracts remaining to be executed for
Purchases of Stock-in-Trade - Nil (Previous period Rs. 312,431,773).
(C) Other Long-term Employee Benefit
The liability for Compensated Absences as determined by independent
actuary as at the Balance Sheet date is Rs. 33,145,000 (Previous period Rs.
33,781,000).
6. The company has only one reportable business segment which is
"Pharmaceuticals" and one reportable geographical segment which is
"within India". Accordingly, no separate disclosures of segment
information are required.
7. Related Party Disclosures
(A) Enterprises where control exists
(a) Ultimate Holding Company Merck & Co., Inc., USA
(b) Holding Company Dashtag, UK
(c) Subsidiary Company Schering-Plough (India) Private Limited
(B) Other Related Parties with whom the company had transactions during
the year/period
(a) Fellow Subsidiaries Essex Chemie AG, Switzerland*
MSD International GMBH, Singapore
MSD Pharmaceuticals Private Limited, India
Organon (India) Private Limited, India
Merck Sharp & Dohme Corp., USA
Merck Sharp & Dohme (Australia) Pty Ltd., Australia*
Merck Sharp & Dohme (Asia) Limited, Hong Kong Merck Sharp & Dohme
(I.A.) Corp., Philippines*
Merck Sharp & Dohme (Malaysia) SDN. BHD., Malaysia*
Merck Sharp & Dohme B. V., Netherlands MSD Korea Limited, Korea
Merck Sharp & Dohme (New Zealand) Limited, New Zealand MSD-Sun FZ LLC,
UAE
(b) Key Management Personnel
K. G. Ananthakrishnan - Managing Director
Giridhar Sanjeevi (from 22nd July, 2013) - Chief Financial Officer
Rajesh Marwaha (up to 26th June, 2013)* - Chief Financial Officer
No transactions during the current year
8. Earnings per Share
Basic earnings per share has been calculated by dividing profit for the
year/period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year/period. The company
has not issued any potential equity shares and accordingly, the basic
earnings per share and diluted earnings per share are the same.
Earnings per share has been computed as under:
The above information and that given in Note 6 - Trade Payables
regarding Micro and Small Enterprises has been determined to the extent
such parties have been identified on the basis of information available
with the company.
9. In the year ended 31st December, 2006, the company had raised Rs.
402,500,000 by issuing 700,000 equity shares of Rs. 10 each at a premium
of Rs. 565 per share to its promoters, Dashtag, UK. Of the aforesaid
balance, the company has utilised Rs. 109,286,718 (Previous period Rs.
40,998,830) towards business expansion up to 31st March, 2015. The
remaining amount of Rs. 293,213,282 continue to be invested in fixed
deposits with banks pending utilisation of the same.
10. On 1st October, 2014, the company entered into a 'Business
Transfer Agreement' with Bayer Pharmaceuticals Private Limited
("Bayer"), consequent to which the Consumer Care Business and Rx
Product Business comprising of Alaspan, Polaramine and Tinaderm have
been transferred to Bayer with effect from 1st January, 2015 for a
consideration of Rs. 43,073,100.
11. Disclosures for Employee Share based Payments.
The Institute of Chartered Accountants of India has issued a Guidance
Note on "Accounting for Employee Share based Payments", which is
applicable to employee share based payment plans, the grant date in
respect of which falls on or after 1st April, 2005. Some of the
employees of the company are entitled to an option to purchase certain
shares of the ultimate holding company, Merck & Co., Inc., USA under an
option agreement entered into between the ultimate holding company and
the employee. The stock option scheme of the ultimate holding company
is being managed and administered by the ultimate holding company for
its own benefit and the company is not compensating its ultimate
holding company for the grants made to the employees and accordingly,
there are no costs being reflected in the financial statements. The
details of employee share based payments are not readily available with
the company and hence, the same are not disclosed.
There are two schemes under which employees are granted stock options:
(A) A stock option scheme ('ESOP') as per which the employee has
the right to purchase a fixed number of shares of the ultimate holding
company at a fixed price for a fixed period of time. The incentive to
the employee is the value employee realises from a stock option and is
dependent on the current value of the stock being higher than the
option price.
(B) Restricted Stock Award Unit ('RSU') is a grant valued in terms
of the ultimate holding company stock, but the ultimate holding company
stock is not issued at the time of the grant. After a recipient of a
unit satisfies the vesting requirement, the ultimate holding company
will distribute shares or the cash equivalent of the number of shares
used to value the unit. No payment is required under the restricted
stock award.
12. On 25th April, 2014, the promoter of the company, Dashtag
("Acquirer"), notified the company of its intention to make a
voluntary delisting offer ("Delisting Offer") to the public
shareholders of the company in accordance with the Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009
("Delisting Regulations") to acquire 976,763 equity shares,
representing 25.05% of the paid-up equity share capital of the company
held by the public shareholders of the company and consequently delist
the equity shares of the company from the BSE Limited. The Acquirer,
vide letter dated on 1st December, 2014, has informed the company that
on account of the abnormal spurt in the share price, the Acquirer has
decided not to make the public announcement of the Delisting Offer at
this time.
13. During the previous period, the company changed its accounting year
end to 31st March, 2014. Accordingly, the figures for the previous
period are for the fifteen months' period from 1st January, 2013 to
31st March, 2014 and are not comparable with those of the current year.
14. Previous period figures have been regrouped where necessary.
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