| 1.1 Fixed assets / Capital Work- in- progress:-
The company is undertaking capital expenditure program at its Mahad and
Pune Plants. An advance payment of Rs. 1,492.13 Lacs towards capital
assets have been made in current year. The same is included in capital
WIP. The Capital WIP stands at Rs. 17,901.22 Lacs as on 31st March 2014.
1.2 Investments:-
Long Term Investments are stated at cost less provision, if any, for
diminution which is other than temporary in nature. Current investments
are valued at lower of cost and net realizable value.
1.3 Leases:
The company has operating lease agreements, primarily for leasing
office space and residential premises for it employees. Most of these
lease agreements provide for cancellation by either party with a notice
period ranging from 30 days to 120 days and contain a clause for
renewal of lease agreement at the option of the company. There are no
non-cancellable operating leases. There are no assets taken on finance
lease.
1.4 Subsidiary and Associate Company:-
The Company is no longer an associate of Finaventure Capital Limited
(formerly known as Aasda Lifecare Limited) during the year under
report. Finaventure Capital Limited holds only 2.84 % shares of the
company as at 31st March, 2014.
The Company had made investments in Eros Pharmaceuticals Pte. Ltd.
(Singapore), Fair Success (Hong Kong ) Ltd and DR. Datsons Labs (UK)
Ltd as also in Aanj Pharmalabs Ltd FZE Dubai thereby making these
companies wholly owned Subsidiary.
1.5 Leases:
The company has operating lease agreements, primarily for leasing
office space and residential premises for it employees. Most of these
lease agreements provide for cancellation by either party with a notice
period ranging from 30 days to 120 days and contain a clause for
renewal of lease agreement at the option of the company. There are no
non-cancellable operating leases. There are no assets taken on finance
lease.
1.6 Research & Development:-
The costs are expensed when incurred. Capital expenditure when incurred
for acquisition or construction of equipment and facilities for R&D and
having alternate future uses will be capitalized.
1.7 Default in repayment of Loans from Banks and payment of Statutory
Dues:-
As reported in Pt. No. ix (b) and Pt. No. xi in Annexure to the
Independent Auditors Report, it may be noted that the business of our
company is growing at rapid pace. Consequently, there is substantial
increase in requirement of funds for working capital. However, during
past few years, our bankers have not carried out fresh appraisal/
Assessment of our Working Capital requirement. Due to non-revision of
credit facilities by our bankers, there is always financial pressure on
the working capital. As a result of the same, there were defaults in
repayment of Borrowed Funds from banks as well as payment of Statutory
Dues. However, the Management has been continuously putting its efforts
in raising funds from various sources both internal as well as external
and is expecting to regularize the defaults in the next financial
years.
1.8 Contingent Liabilities:-
(Rs. In Lacs)
Particulars As at As at
31st March 2014 31st March 2013
Service Tax liability (excluding
Penalties) that may arise.
The Company has been legally
advised that the demand is likely
to be either deleted or substantially
reduced and accordingly
no provision has been made. 82.09 NIL
1.9 No commission on profits is paid at any time during the year to any
of the directors of the Company.
1.10 Derivative Instruments:-
Company has not entered into any Forex Derivative Contracts at any time
during the year.
During the year ended 31st March 2014 foreign currency exposures that
have not been hedged by a derivative instrument or otherwise are given
below:
a) Amount receivable in foreign currency on account of export of goods-
USD 302.87 Lacs (Previous Year USD 149.95 Lacs) INR 18,202.43 Lacs
(Previous Year INR 8155.72 Lacs), GBP 0.10 Lacs (Previous Year GBP 0.10
Lacs) INR 9.99 Lacs (Previous Year INR 8.23 Lacs).
b) Amount paid in foreign currency on account of import of goods-USD 74
Lacs (Previous Year USD 1.28 Lacs) INR 4,604.85 Lacs (Previous Year INR
72.31 Lacs).
c) Amount payable in foreign currency on account of import of goods-
USD 35.74 Lacs (Previous Year USD 2.02 Lacs) INR 2,147.74 Lacs
(Previous Year INR 110 Lacs.
1.11 Cenvat:-
No Cenvat credit is availed in respect of finished goods manufactured
and sold by the company which are exempt or free of Central Excise
Consequently duty paid on these inputs is expensed during the year.
Where finished goods manufactured and sold by the company are excisable,
Cenvat credit is availed on inputs used in the manufacture of such
excisable goods
1.12 Related Party Disclosures:-
Name of the Key Managerial Personnel Relationship
Kannan K. Vishwanath Managing Director
Relatives of the Key Managerial Personnel Relationship
Divya K. Vishwanath Wife of Kannan
K.Vishwanath
Companies / Firms in which the Key Managerial Personnel & their
relatives are interested
Eros Pharmaceuticals Pte. Ltd. Subsidiary Company
AANJ Pharmalabs Limited FZE Subsidiary Company
Finventure Capital Ltd (Aasda Life Care Limited) *
Fair Success (H.K.) Limited Subsidiary Company
DR. Datsons Labs Limited Subsidiary Company
The Company has entered into the following related party transactions.
As on March 31, 2014 such parties and transactions are identified as
per Accounting Standard 18 issued by the 'The Institute of Chartered
Accountants of India.'
1.13 Disclosures pursuant to Accounting Standard - 15 "Employee
Benefits":- Defined Contribution Plan
The company has made payments to the Government Provident Fund
amounting to 14.18 Lacs and the same is expensed during the year ended
31st March, 2014.
Defined Benefit Plan
The following disclosures are made in accordance with AS 15 (Revised)
pertaining to defined benefit plans regarding Gratuity.
1.14 FCCB-Foreign Currency Convertible Bonds:-
The company had issued Foreign Currency Convertible Bond (FCCB)
aggregating to US $ 40 Million during the last financial year for
acquisition of company overseas. During the current financial year
under report FCCB aggregating to US $ 18 Million were converted into 1,77,68,124 equity shares at conversion price of Rs. 55/- per share.
Further on 15th May 2014 the company had converted FCCB amounting to
US $ 11.20 million into equity shares at conversion price of Rs. 55/-
per share. Balance FCCB aggregating to US $ 10.80 Million is included
in unsecured loans under current liabilities.
1.15 Micro Small & Medium Enterprises Development Act 2006. {MSMED Act
2006}:-
The company is outside the purview of MSMED Act 2006 as the investment
in Plant & Machinery is greater than 10 crores as at the end of the
year.
1.16 The previous year figures have been recast / regrouped whenever
necessary in order to confirm to current year's presentation.
1.17 Prior Period expenses of Rs. 17.75 lacs pertains to Interest
payable for FY 2012-13. It also includes Rs. 0.5 Lacs as Website
Development Expenses for FY 2011-12.
1.18 Segment Information:-
The company has only one reportable segment and that is the business
segment and there are no geographical segments. Segment information
disclosure is made in accordance with Accounting standard (AS) -17
"Segment Reporting". It is identified based on products, organization
structure, risk return profile and the reporting systems of the
company. The business segment is organized into API manufacturing and
Formulation manufacturing. Formulation manufacturing business has
commenced only from 1st April 2010 and onwards.
Information about Business Segments
Note: For API's, the reactors installed are to be of larger capacity so
as to accommodate herbal based raw material inputs whose yield can vary
from crop to crop. The reactors are also multipurpose in nature. Hence
there is no direct correlation between installed capacity and actual
production. During FY 12-13 the value of manufacturing API is high
although quantity less.
Note:
(i) The Formulations business commenced only from 1st April 2010.
(ii) In terms of press Note no. 4 (1994 series) dated October 25, 1994
issued by the department of Industrial Development, Ministry of
Industry, Government of India and Notification no. S.O. 137 (E) dated
March 01, 1999 issued by the Department of Industrial Policy and
Promotion, Ministry of Industry, Government of India, Industrial
licencing has been abolished in respect of bulk drugs and formulations.
Hence there are no registered / Licensed capacities for these bulk
drugs and formulation
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