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Notes to Accounts of Bal Pharma Ltd.
Mar 31, 2024
b. Rights, preferences and restrictions attached to equity shares:
(i) The Company has only one class of shares referred to as equity shares having par value of Rs 10 each.
(ii) Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders'' meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders'' meeting.
(iii) The Company declares and pays dividends in Indian Rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing General Meeting.
(iv) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts.The distribution will be in proportion to the number of equity shares held by the shareholders.
(v) Each Share holder has a right to inspect the statutory registers of the company as per the provisions of the companies act, 2013.
(vi) Each and every share holder has a right to participate in the share holders''s meetings as and when called by the company subject to provisions of the Companies Act, 2013.
(d) Shares reserved for issue under options & contracts/commitments for sale of shares /disinvestment, including the terms & amounts - NIL
(e) For period of 5 years immediately preceding the balance sheet date.
- Alloted as fully paid up by way of bonus shares NIL
- Bought back NIL
- For consideration other than cash- NIL
(f) Securities convertible into equity /preference shares issued - NIL
(g) No Calls Unpaid
(h) Issue of securities made for a specific purpose at the balance sheet date - NIL
Nature and purpose of reserves Retained Earnings :
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to share holders.
Securities premium:
The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve will be utilised in accordance with provisions of Section 52 of the Companies Act, 2013.
General reserve:
The Company has transferred a portion of its net profit before declaring dividend to general reserve pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013
Other Comprehensive Income (OCI):
Re-measurement of defined employee benefit plans
Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments with in the plans, are recognised in other comprehensive income and subsequently not reclassified into standalone statement of profit and loss
i) A Term loans (including current maturities of non-current borrowings) from South Indian Bank Limited -Term Loan 1
As at 31 March 2024 : Rs. 362.81 lakhs (31 March 2023 : Rs.394.89 lakhs)
Security
i. All the property bearing municipal no 6/3 situated at Vasanthnagar, new ward number 63, Bengaluru consisting of 6825 square feet land owned by the Company
Repayment and interest
ii. The loan was repayable in 154 monthly instalments starting from March 2018.
iii. The loan carried interest rate equal to the lender''s 12 month''s MCLR rate
B Term loans (including current maturities of non-current borrowings) from South Indian Bank Limited -Term Loan 2
As at 31 March 2024 : Rs.273 lakhs (31 March 2023 : Rs. 289.53 lakhs)
Security
i. All the property bearing municipal no 6/3 situated at Vasanth Nagar, new ward number 63, Bengaluru consisting of 6825 square feet land owned by the Company
Repayment and interest
ii. The loan was repayable in 180 monthly instalments starting from April 2018.
iii. The loan carried interest rate equal to the applicable 12 month''s MCLR rate
C Term loans (including current maturities of non-current borrowings) from Canara Bank.
As at 31 March 2024 : Rsll4.ll lakhs (31 March 2023 : Rs.137.32 lakhs)
Security
i. Hypothecation of Plant and Machinery which were funded from the term loan. For all the limits sanctioned by bank including term loan, charge on current assets of the Company along with HDFC Bank limited and Canara Bank and first charge on the property located in Plot 6lB, Bommasandra, Bengaluru and personal guarantee of Mr Shailesh Siroya (managing director)
Repayment and interest
I. The disbursed loan to be repayable in 84 months with 5 months of moratorium and 1 month for project implementation
ii. The loan carried interest rate equal to the applicable RLLR(presently 6.90%) 2.80% 0.8% (Liquidity Premium)
D Term loans (including current maturities of non-current borrowings) from Canara Bank.
As at 31 March 2024 : Rs 274.00 lakhs (31 March 2023 : Rs.274.00)
Security
i. The assets created out of the credit facility so extended, that is, paripassu first charge on the entire current assets of the Company Repayment and interest
i. The disbursed loan to be repayable in 72 months with 24 months of moratorium
ii. The loan carried interest rate equal to the applicable RLLR(presently 6.90%) 0.60%= 7.5%
ii) Details of securities, repayment and interest of secured term loans from others (including current maturities of long-term debt):
A Term loans (including current maturities of non-current borrowings) from STCI Finance Limited
As at 31 March 2024 : Rs 1500 lakhs (31 March 2023 : Rs.Nil)
Security
i. Exclusive Charge by way of mortgage of Plot No.C-155, Mewar Industrial Area, Udaipur, Rajasthan - 313003, presently mortgaged in favour of TFSL towards Term loan which has taken over by STCI Finance Limited
ii. First and Exclusive charge on entire present and future Fixed Assets (both movable and Immovable of Golden Drugs Pvt Ltd.
Repayment and interest
i. The loan is repayable in 60 monthly instalments shall commence from the end of the 12th month succeding the month of first disbursement.Starting from Jan''25 with an initial moratorium of 12 months
ii. The loan carried interest rate equal to the lender''s long term lending rate @ 12.50% p.a payable monthly.
B Term loans (including current maturities of non-current borrowings) from Small Industries Development Bank of India (SIDBI)
As at 31 March 2024 : Rs 182.00 lakhs (31 March 2023 : Rs.0.00 lakhs)
Security
i. First Charge by way of hypothecation of Plant and Machinery pertaining to the project of Rs.429 Lakhs, ii.Collateral Security FDR of Rs. 129 lakh lien mark with SIDBI in favour of Borrower and unconditional joint and several personal guarantee of Mr Shailesh Siroya (Managing director) and MrVHimesh, Executive Director Repayment and interest
i. The loan is repayable in 54 monthly instalments starting from June 2024 with a initial moratorium of 6 months
ii. The loan carried interest rate equal to the lender''s long term lending rate @ 7.80% pa
iii) Details of securities, repayment and interest of Working Capital Term Loan under GECL scheme (including current maturities of long-term debt):
A Working CapitalTerm Loans (including current maturities of non-current borrowings) from Canara Bank limited - 01
As at 31 March 2024 : Rs 191.67 (31 March 2023 : Rs.291.67 lakhs)
Security
i. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Initial moratorium of 12 months and thereafter repayable in 48 months as Rs 8.35 lakhs per month for 47 months and Rs 7.55 lakh per month for 1 month
ii. The loan carried interest rate equal to the lender''s long term lending rate @ 7.50% p.a
B Working CapitalTerm Loans (including current maturities of non-current borrowings) from HDFC Bank Limited-02
As at 31 March 2024 : Rs 487.50 lakhs (31 March 2023 : Rs.650 lakhs)
Security
i. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Total tenor of 60 months with 12 months moratorium period .
ii. The loan carried interest rate equal to 7.5%.p.a
C Working CapitalTerm Loans (including current maturities of non-current borrowings) from HDFC Bank Limited-03
As at 31 March 2024 : Rs 800 lakhs (31 March 2023 : Rs.800 lakhs)
Security
i. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Total tenor of 48 months with 24 months moratorium period .
ii. The loan carried interest rate equal to 8%.p.a
D Working Capital demand Loans (including current maturities of non-current borrowings) from HDFC Bank Limited
As at 31 March 2024 : Rs 500 lakhs (31 March 2023 : Rs. Nil )
Security
I. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
Repayment and interest
I. Total tenor of 6 months and amount to be paid with in three instalment after 120 days -1.5Cr, 150 days -1.5 Cr and 180 days -2.00 Cr respectively from the date of first disbursement . ii. The loan carried interest rate equal to 8.75%.p.a
iv) Details ofVehicle loans (including current maturities of long-term debt):
A Vehicle Loans (including current maturities of non-current borrowings) from Canara Bank Limited- COROLA
As at 31 March 2024 : Rs.1.73 lakhs (31 March 2023 : Rs. 4.14 lakhs)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 9.20%.
(iii) The principal amount has to be repaid in 60 equated monthly instalments.
B Vehicle Loans (including current maturities of non-current borrowings) from HDFC Bank Limited - INNOVA HYCROSS
As at 31 March 2024 : Rs.26.71 lakhs (31 March 2023 : Rs.Nil)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 8.50%
(iii) The principal amount has to be repaid in 60 equated monthly instalments
C Vehicle Loans (including current maturities of non-current borrowings) from HDFC Bank Limited - MAHINDRA XUV700AX7 AWD
As at 31 March 2024 : Rs.28.04 lakhs (31 March 2023 : Rs.Nil)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 9 %
(iii) The principal amount has to be repaid in 60 equated monthly instalments
D Vehicle Loans (including current maturities of non-current borrowings) from HDFC Bank Limited - GLANZA 1.2 G P MT
As at 31 March 2024 : Rs.6.89 lakhs (31 March 2023 : Rs.Nil)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 9 %
(iii) The principal amount has to be repaid in 60 equated monthly instalments
E Vehicle Loans (including current maturities of non-current borrowings) from HDFC Bank Limited - EECO AMBULANCE
As at 31 March 2024 : Rs.5.3 lakh (31 March 2023 : Rs.Nil)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 10%
(iii) The principal amount has to be repaid in 39 equated monthly instalments.
F Vehicle Loans (including current maturities of non-current borrowings) from Bank of Baroda
As at 31 March 2024 : Rs.2.28 lakhs (31 March 2023: Rs 6.04 lakhs)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 7.35%
(iii) The principal amount has to be repaid in 36 equated monthly instalments.
G Vehicle Loans (including current maturities of non-current borrowings) from Mercedes- Benz Financial Services India Pvt Ltd
As at 31 March 2024 : Rs.47.64 lakhs (31 March 2023: Rs. 60.18 lakhs)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 7.27%
(iii) The principal amount has to be repaid in 60 equated monthly instalments.
H Vehicle Loans (including current maturities of non-current borrowings) from Union Bank of india - EECO
As at 31 March 2024 : Rs.3.37 lakhs (31 March 2023: Rs.4.14)
(i) Secured by hypothecation of motor vehicles.
(ii) These loans carry an interest rate of 9.45%
(iii) The principal amount has to be repaid in 60 equated monthly instalments.
v) Details of Unsecured loans (including current maturities of long-term debt) from Kotak Mahindra Bank Limited:
A Kotak Mahindra Bank Limited-Jaldi Loan-Personal Loan-01
As at 31 March 2024 : Rs.77.67 lakhs (31 March 2023: Rs.Nil)
i.The Loan is Not secured and sanctioned loan under Jaldi Loan credit facility offered by Kotak Mahindra Bank Limited Repayment and interest
i. Total tenor of 24 months without any moratorium period .
ii. The loan carried interest rate equal to 14.17 %.p.a
B Kotak Mahindra Bank Limited-Jaldi Loan-Personal Loan-02
As at 31 March 2024 : Rs.42.82 lakhs (31 March 2023: Rs.Nil)
i. The Loan is Not secured and sanctioned loan under Jaldi Loan credit facility offered by Kotak Mahindra Bank Limited Repayment and interest
i. Total tenor of 24 months without any moratorium period .
ii. The loan carried interest rate equal to I4.50%.p.a
vi) There are no defaults in repayment of principal or interest to lenders as at the balance sheet date, however, in certain cases based on information available as on date, there exists a difference between the balance as per schedule and balance as per books
a) The following are delay in repayments towards loan for the year ended March 31,2023
- In case of vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for April, May. June , July.Augsut & September months as PNB bank where auto debit was linked is closed as per RBI Guidlines , hence delay occured.
- In case of one of the term loans taken from HDFC Bank Limited, the terms of which is stipulated in (i) above, there is a delay in repayment for the month of May 22, by two days. July 22, by six days.Aug 22, by Eight days.
- In case of term loan taken from TATA capital financial Services limited, the terms of which is stipulated (i) above, ther is delay in repayment for the month ofJuly-22 by 3 days, Sep-22 by one day , Dec-22 by one day, Mar-23 by one day
In case of vehicle loans taken from Mercedes Benz Financial Services India Pvt Ltd, the terms of which is stipulated in (iv) above, there is a delay in repayment for 1 day in the month of Sep'' 22
b) The following are delay in repayments towards loan for the year ended March 31,2024
In case of vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for 13 days in the month of Aug 23 where auto debit was linked is rejected due to signature mismatch.
In case of vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for 7 days in the month of Mar 24 where auto debit was linked is rejected due to signature mismatch.
In case of vehicle loans taken from Mercedes Benz Financial Services India Pvt Ltd, the terms of which is stipulated in (iv) above, there is a delay in repayment for 7 days in the month of Apr'' 23 where auto debit was linked is rejected due to signature mismatch in ECS form.
In case of Unsecured loans taken from Kotak Mahindra Bank Limited-01, the terms of which is stipulated in (v) above, there is a delay in epayment for 2 days in the month of Dec'' 23 where auto debit was linked is rejected due to signature mismatch in ECS form.
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39. Contingent liabilities and commitments |
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|
Particulars |
As at 31 March 2024 |
As at 31 March 2023 |
|
Contingent liabilities |
||
|
- Income tax |
306.92 |
306.92 |
|
- Excise & Customs and Service Tax (refer note 1 below) |
247.94 |
247.94 |
|
- GST |
1,140.71 |
1,088.72 |
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Capital commitments - Estimated amount of contracts remaining to be executed on |
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capital account (net of advances) and not provided for |
- |
Note 1 : The Company has received show cause notices under the Central Excise laws and Service Tax laws in for the years 2007-08 onwards which in various stages of assessment as at 31 March 2024.The assessments are in progress and the Company has not received the assessment order in respect of the same. In certain cases, the Company has preferred an appeal which has been remanded back to the original authority for reassessment.
Other Disputes
The Company is also involved in other lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business, however, there are no such matters pending that the company expects to be material in relation to its business.
43. Confirmations
Balances ofTrade Receivables, Trade Payables, Loans and Advances, Receivables and Payables are subject to confirmation / reconciliation, if any
44. Earnings per share
Basic EPS amounts are calculated by dividing the income for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.The Company has no potentially dilutive instruments.
47. Leases
(a) Company as a lessee
The Company adopted Ind-AS 116, on all lease contracts, except for the leases with a term of twelve month or less (short term leases) and low value leases using the modified retrospective method with Right-of-use assets recognised at an amount equal to the lease liabilities in the balance sheet. The Right-of-use assets as on March 31,2023 and March 31,2024 have been presented as part of Property, plant and equipment. For these short term leases, the Company recognises the lease payments as an operating expense on a straight line basis over the period of lease.
48. Export Benefit Incentives
Export benefit Incentives includes Duty Drawback (âDBKâ), Focus Marketing incentive scheme(FMS), Focus product scheme (FPS), Market Linked Product Scheme (MLPS), Incremental Exports incentive scheme, Merchandise Export India Scheme, Service tax rebate scheme (STR) and Remission of Duties or Taxes on Export Products Scheme .The Company has accounted an amount of Rs. 279.49 lakhs (31 March 2023 : Rs. 207.13 lakhs ) under "other operating revenue", being the net amount of credit under various export incentive schemes as announced under Foreign trade Policy.The same will be either be sold or utilized for off-setting customs duty on future imports.The accumulated amount outstanding on this account as on 31 March 2024 is Rs. 248.75 lakhs (31 March 2023 is Rs. 193.70 lakhs) and the same is reflected under Export Incentives Receivable.
49. Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses and for which discrete financial information is available.The operating segmentsâ operating results are reviewed by the Chief Operating Decision Maker (Board of Directors) to make decisions about resources to be allocated to the segments and assess their performance. The Companyâs business activities fall within one component namely, "manufacturing and marketing of pharmaceutical formulations and active pharmaceutical ingredients". Accordingly, separate disclosures per the requirements of Ind AS 108, Operating Segments, are not considering necessary.
In accordance with Ind AS-108 âOperating Segmentsâ, information about geographical areas has been given in the Consolidated Financial Statements of Bal Pharma Limited and therefore, no separate disclosure on geographical areas is given in these financial statements
52. Note on Suspended Activities in Unit located at Pune
"The Management of the Company has decided to suspend the operations of its IV fluids and parenterals manufacturing facility at Pune as this unit has been consistently incurring operational losses due to various reasons such as higher costs of raw materials, escalation in production cost, employee cost, lack of adequate orders and thin margins on products manufactured.The above have led to a situation wherein any further efforts to restore the profitability of the unit will be futile.
This decision was taken as part of the restructuring exercise undertaken by the Company to streamline its operations and to exit from its noncore businesses, so that further deterioration of its noncore business revenues can be plugged. The management is considering both avenues of disinvestment of the Unit or partnering with an outside party, whichever is beneficial. "
(b) Defined Benefit Plans and other Long term plans
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the number of years of employment with the Company.
Actuarial Valuation for compensated absences is done as at the year end and the provision is made as per Company policy with corresponding (gain)/charge to the statement of profit and loss and it covers all regular employees. Obligation in respect of earned leave policy are actuarially determined as at the year end using the âProjected Unit Credit'' method.
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit and leave encashment
60. Financial Instruments - Financial risk management
The Company has exposure to following risks arising from financial instruments- Market Risk
- Credit Risk
- Liquidity Risk
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.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 regularly to reflect changes in market conditions and the Company''s activities.
The Company''s 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 relations to the risks faced by the Company.
A Market Risk
1) Currency Risk
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and services and purchases from overseas suppliers in various foreign currencies. However as the Company exports as well as imports goods and services, the Company has a natural hedging due to its operations. Market Risk is the risk that changes in market prices such as foreign exchange rates will effect company''s income or value of its holding financial assets/ instruments.The exchange rate between the Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the Rupee appreciates/ depreciates against US dollar (USD), Euro (EUR), Dhirams (AED) and Others.
2 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 investments because of fluctuations in the interest rates, in cases where the 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 investments will fluctuate because of fluctuations in the interest rates.
a) Exposure to Interest Rate Risk
The interest rate profile of the Company''s interest-bearing financial instruments as reported :
(b) Fair value sensitivity analysis for fixed-rate instruments
The Company''s fixed rate instruments are carried at amortised cost.They are therefore not subject to interest rate risk as defined as per Ind AS 107, since neither the carrying amount nor future cash flows will fluctuate because of change in market interest rates.
(c) Cash flow sensitivity analysis for variable-rate instruments
A reasonable possible change of 2% (200 basis points) in interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below.This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
B Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Maturities of financial liabilities:
The table below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
C Credit Risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Companyâs exposure to credit risk is limited to the carrying amount of financial assets recognised at the date of the balance sheet, as summarised in the table below.The Company periodically assesses the financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual customer limits are set accordingly.
Credit risk on cash and cash equivalents is limited as they are generally invested in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Advances to Related Parties are for business purposes and the Company assesses the credit risk on the these advances on a regular basis and does not forsee any event of default.
Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with respect to trade receivables is mitigated by the Companyâs large customer base.Adequate expected credit losses are recognized as per the assessments and as such has provided for a expected credit loss of Rs.165.50 lakhs.( 31 March 2023: 146.20 lakhs)
61 Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. In order to maintain or adjust its capital structure, the Company may adjust the amount of dividends paid, return the capital to shareholders, issue new shares or adjust its short term borrowings. The current capital structure of the Company is equity based backed with borrowings.
62 Recoverability from Subsidiary Companies
The Company has an outstanding recoverability of Rs.916.00 lakhs and Rs.153.02 lakhs from it subsidiaries Lifezen Healthcare Private Limited and Balance Clinic LLP respectively. The said subsidiaries have incurred losses and have a negative net worth. However the management is confident that with infusion of additional funds, introduction of new brands and renewed marketing, the companies can be revived and the amounts recovered.
63 Merger with its wholly owned subsidiary
The Company has filed application with NCLT for merger of Golden Drugs Pvt Ltd , a wholly owned subsidiary of the Company.
65. Other Accounting Policies Information
a) Intangible Asset
Recognition and Measurement
The items of intangible assets, with finite life, are measured at cost less accumulated amortisation and impairment losses, if any. Cost of an item of intangible assets comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any cost directly attributable to bringing the asset to its working condition for its intended use.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.All other expenditure on internally generated goodwill and brands, is recognised in profit or loss when incurred.
Research and Development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised as an expense when incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes. An internally-generated intangible asset arising from development is recognised if following have been demonstrated by the Company.
- development costs can be measured reliably;
- the product or process is technically and commercially feasible
- future economic benefits are probable; and
- the Company intends to and has sufficient resources to complete development and to use or sell the asset.
As such, expenditure on projects which have become unsuccessful are charged off as an expense in the year in which they are abandoned. Capital expenditure incurred on research and development is capitalized as Property, Plant and Equipment and depreciated in accordance with the depreciation policy of the company.
Disposal/Write-off
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
Amortisation
Amortisation is calculated to write-off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method, and is included in depreciation and amortisation in the statement of profit and loss.The estimated useful life of intangibles are as follows:
The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. b) Impairment
i. Impairment of financial instruments
The Company recognises loss allowances for expected credit losses on:
- financial assets measured at amortised cost; and
- financial assets measured at FVOCI- debt investments.
At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired.A financial asset is âcredit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or being past due for 180 days or more;
- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for a security because of financial difficulties.
The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort.This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 180 days past due.
The Company considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or
- the financial asset is 180 days or more past due.
A. Measurement of expected credit losses
"Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed."
B. Presentation of allowance for expected credit losses in the balance sheet
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
C.Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.
ii. Impairment of non-financial assets
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell.Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
The Company''s corporate assets do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the Statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
c) Financial Instruments
i. Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated.All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
A. Financial assets
On initial recognition, a financial asset is classified as measured at
- amortised cost
- Fair value through other comprehensive income (FVOCI) - debt investment;
- Fair value through other comprehensive income (FVOCI) - equity investment; or
- Fair value through profit & loss- (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and Interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment).This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL.This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
B. Financial assets: Business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management.The information considered includes:
- the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management''s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
- how the performance of the portfolio is evaluated and reported to the Company''s management;
- the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
- how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company''s continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.
C. Financial assets:Assessment whether contractual cash flows are solely payments of principal and interest.
For the purposes of this assessment, âprincipal'' is defined as the fair value of the financial asset on initial recognition. âInterest'' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:
- contingent events that would change the amount or timing of cash flows;
- terms that may adjust the contractual coupon rate, including variable interest rate features;
- prepayment and extension features; and
- terms that limit the Company''s claim to cash flows from specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
D. Financial assets: Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or
dividend income, are recognised in profit or loss.
Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
D.1 Financial assets: Subsequent measurement and gains and losses
Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income under the effective interest
method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or
loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
E. Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
iii. Derecognition
A. Financial assets
he Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
B. Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value.The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
iv. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
d) Foreign CurrencyTransactions:
"Initial recognition:
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction."
"Measurement of foreign currency monetary items at the Balance Sheet date:
Foreign currency monetary items (other than derivative contracts) of the Company and its net investment in non-integral foreign operations outstanding at the Balance Sheet date are restated at the year-end rates."
"Treatment of exchange differences:
Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.
e) Employee Benefits
a) ShortTerm Employee Benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are recorded as expense as the related service is provided. Benefits such as salaries, short term compensated absences etc., and the expected cost of bonus is recognized in the period in which the employee renders the related services.A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for the related service
b) Post-Employment Benefits
The Company participates in various employee benefit plans. Pensions and other post-employment benefits are classified as either defined contribution plans or defined benefit plans. Under a defined contribution plan, the Company''s only obligation is to pay a fixed amount with no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits.The related actuarial and investment risks are borne by the employee. The e
Mar 31, 2023
a. Rights, preferences and restrictions attached to equity shares:
(i) The Company has only one class of shares referred to as equity shares having par value of Rs 10 each.
(ii) Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders'' meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders'' meeting.
(iii) The Company declares and pays dividends in Indian Rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing General Meeting.
(iv) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts.The distribution will be in proportion to the number of equity shares held by the shareholders.
(v) Each Share holder has a right to inspect the statutory registers of the company as per the provisions of the companies act, 2013.
(vi) Each and every share holder has a right to participate in the share holders''s meetings as and when called by the company subject to provisions of the Companies Act, 2013.
(d) Shares reserved for issue under options & contracts/commitments for sale of shares /disinvestment, including the terms & amounts - NIL
(e) For period of 5 years immediately preceding the balance sheet date.
- Alloted as fully paid up by way of bonus shares NIL
- Bought back NIL
- For consideration other than cash- NIL
(f) Securities convertible into equity /preference shares issued - NIL
(g) No Calls Unpaid
(h) Issue of securities made for a specific purpose at the balance sheet date - NIL
Nature and purpose of reserves Retained Earnings :
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to share holders.
Securities premium:
The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve will be utilised in accordance with provisions of Section 52 of the Companies Act, 2013.
General reserve:
The Company has transferred a portion of its net profit before declaring dividend to general reserve pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013
Other Comprehensive Income (OCI):
Re-measurement of defined employee benefit plans
Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments with in the plans, are recognised in other comprehensive income and subsequently not reclassified into standalone statement of profit and loss
i) Details of securities, repayment and interest of secured term loans from banks (including current maturities of long-term debt):
A) Term loans (including current maturities of non-current borrowings) from South Indian Bank Limited -Term Loan 1
As at 31 March 2023 : Rs. 394.89 lakhs (31 March 2022 : Rs.404.08 lakhs)
Security
i. All the property bearing municipal no 6/3 situated at Vasanthnagar, new ward number 63, Bengaluru consisting of 6825 square feet land owned by the Company
Repayment and interest
ii. The loan was repayable in 154 monthly instalments starting from March 2018.
iii. The loan carried interest rate equal to the lender''s 12 month''s MCLR rate
B) Term loans (including current maturities of non-current borrowings) from South Indian Bank Limited -Term Loan 2
As at 31 March 2023 : Rs.289.53 lakhs (31 March 2022 : Rs. 292.85 lakhs)
Security
i. All the property bearing municipal no 6/3 situated at Vasanth Nagar, new ward number 63, Bengaluru consisting of 6825 square feet land owned by the Company
Repayment and interest
ii. The loan was repayable in 180 monthly instalments starting from April 2018.
iii. The loan carried interest rate equal to the applicable 12 month''s MCLR rate
C) Term loans (including current maturities of non-current borrowings) from HDFC Bank Limited
As at 31 March 2023 : Rs.112.09 lakhs (31 March 2022 : Rs. 280.23 lakhs)
Security
i. Primary security of plant & machinery of Unit 1 located at 21 &22, Bommasandra Industrial Area, Bengaluru. Secondary collateral on factory land and building of Unit 1 located at 21 &22, Bommasandra Industrial Area, Bengaluru and personal guarantee of Mr Shailesh Sirota (managing director)
Repayment and interest
i. The loan was repayable in 5 equal quarterly instalments of Rs. 30 lakh and Rs. 14 lakh equal monthly instalments till November 2023.
ii. Interest was payable on at 10.75 % per annum
D Term loans (including current maturities of non-current borrowings) from Canara Bank.
As at 31 March 2023 : Rs 137.32 lakhs (31 March 2022 : Rs.36.49)
Security
i. Hypothecation of Plant and Machinery which were funded from the term loan. For all the limits sanctioned by bank including term loan, charge on current assets of the Company along with HDFC Bank limited, Canara Bank andYes Bank and first charge on the property located in Plot 61B, Bommasandra, Bengaluru and personal guarantee of Mr Shailesh Siroya (managing director)
Repayment and interest
i. The disbursed loan to be repayable in 84 months with 5 months of moratorium and 1 month for project implementation
iii. The loan carried interest rate equal to the applicable RLLR(presently 6.90%) 2.80% 0.8% (Liquidity Premium)
E Term loans (including current maturities of non-current borrowings) from Canara Bank.
As at 31 March 2023 : Rs 274.00 lakhs (31 March 2022 : Rs.274.00)
Security
i. The assets created out of the credit facility so extended, that is, paripassu first charge on the entire current assets of the Company
Repayment and interest
i. The disbursed loan to be repayable in 72 months with 24 months of moratorium
iii. The loan carried interest rate equal to the applicable RLLR(presently 6.90%) 0.60%= 7.5%
ii) Details of securities, repayment and interest of secured term loans from others (including current maturities of long-term debt):
A Term loans (including current maturities of non-current borrowings) fromTata Capital Financial Services Limited
As at 31 March 2023 : Rs 779.89 lakhs (31 March 2022 : Rs. 992.98 lakhs)
Security
i. The loan is secured by mortgage of the property of Golden Drugs Private Limited Unit at Udaipur and personal guarantee of Mr Shailesh Siroya (Managing director).
Repayment and interest
ii. The loan was repayable in 72 monthly instalments starting from April 2019 with a initial moratorium of 12 months
iii. The loan carried interest rate equal to the lender''s long term lending rate less 7.19%
iii) Details of securities, repayment and interest ofWorking Capital Term Loan under GECL scheme (including current maturities of long-term debt):
A Working CapitalTerm Loans (including current maturities of non-current borrowings) from Canara Bank limited
As at 31 March 2023 : Rs 291.67 (31 March 2022 : Rs. 391.67 lakhs) /
Security
i. The Loan is secured by all assets created out of credit facility
ii .The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Initial moratorium of 12 months and thereafter repayable in 48 months as Rs 8.35 lakhs per month for 47 months and Rs 7.55 lakh per month for 1 month
ii. The loan carried interest rate equal to the lender''s long term lending rate less 7.50% p.a
B Working CapitalTerm Loans (including current maturities of non-current borrowings) from HDFC Bank Limited-03
As at 31 March 2023 : Rs 650 lakhs (31 March 2022 : Rs.650 lakhs)
Security
i. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Total tenor of 60 months with 12 months moratorium period .
ii. The loan carried interest rate equal to 7.5%.p.a
C Working CapitalTerm Loans (including current maturities of non-current borrowings) from HDFC Bank Limited-02
As at 31 March 2023 : Rs 800 lakhs (31 March 2022 : Rs.Nil)
Security
i. The Loan is secured by all assets created out of credit facility
ii. The Loan is further secured by extending the charges created over existing loan.
iii. The facility is to be covered under Emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Limited
Repayment and interest
i. Total tenor of 48 months with 24 months moratorium period .
ii. The loan carried interest rate equal to 8%.p.a
iv) Details ofVehicle loans (including current maturities of long-term debt):
Vehicle Loans (including current maturities of non-current borrowings) from Canara Bank Limited As at 31 March 2023 : Rs.4.14 lakhs (31 March 2022 : Rs. 6.37 lakhs)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 9.20%.
iii. The principal amount has to be repaid in 60 equated monthly instalments.
Vehicle Loans (including current maturities of non-current borrowings) from HDFC Bank Limited
As at 31 March 2023 : Rs.1.60 lakhs (31 March 2022 : Rs. 5.17 lakhs)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 9.90% to 10.50%
iii. The principal amount has to be repaid in 60 equated monthly instalments and 36 equated monthly instalments
Vehicle Loans (including current maturities of non-current borrowings) from Punjab National Bank Limited
As at 31 March 2023 : Rs. 4.78 lakhs (31 March 2022: Rs. 10.56lakhs)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 8.80%
iii. The principal amount has to be repaid in 84 equated monthly instalments.
Vehicle Loans (including current maturities of non-current borrowings) from Bank of Baroda
As at 31 March 2023 : Rs.6.04 lakhs (31 March 2022: Rs 9.50 lakhs)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 7.35%
iii. The principal amount has to be repaid in 36 equated monthly instalments.
Vehicle Loans (including current maturities of non-current borrowings) from Mercedes- Benz Financial Services India Pvt Ltd
As at 31 March 2023 : Rs. 60.18 lakhs (31 March 2022: Rs. Nil)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 7.27%
iii. The principal amount has to be repaid in 60 equated monthly instalments.
Vehicle Loans (including current maturities of non-current borrowings) from Union Bank of india
As at 31 March 2023 : Rs.4.14 lakhs (31 March 2022: Rs Nil)
i. Secured by hypothecation of motor vehicles.
ii. These loans carry an interest rate of 9.45%
iii. The principal amount has to be repaid in 60 equated monthly instalments.
v) There are no defaults in repayment of principal or interest to lenders as at the balance sheet date, however, in certain cases based on information available as on date, there exists a difference between the balance as per schedule and balance as per books
a) The following are delay in repayments towards loan for the year ended March 31, 2022:
- In case of vehicle loans taken from Canara Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for the month of July 21, by four days.
- In case of vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for the month of July 21, by twelve days.
- In case of one of the vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for the month of Jan 22, by ten days.
- In case of another vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for the month ofApril, which was repaid in month of May.
- In case of vehicle loans taken from Punjab National Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for every month during the year.As details made available, the equal monthly instalments is due first day of every month, however auto debit from bank is made at the end of respective month.Thereby, leading to a delay by 30 days.
b) The following are delay in repayments towards loan for the year ended March 31,2023:
- In case of vehicle loans taken from HDFC Bank Limited, the terms of which is stipulated in (iv) above, there is a delay in repayment for the months ofApril, May, June, July,August, September and January as PNB bank where auto debit was linked is closed as per RBI Guidlines , hence delay occured.
- In case of one of the term loans taken from HDFC Bank Limited, the terms of which is stipulated in (i) above, there is a delay in repayment for the month of May 22, by two days.July 22, by six days.Aug 22, by Eight days.
- In case of term loans taken from Tata Capital Financial Services Ltd, the terms of which is stipulated in (i) above, there is a delay in repayment for the month of July 22, by three days.Sept 22, by One day. Dec 22, by one day. Mar 22, by one day.
- In case of vehicle loans taken from Mercedes- Benz Financial Services India Pvt Ltd, the terms of which is stipulated in (iv) above, there is a delay in repayment for the month of Sept 22, by One day
Note 1 : The Company has received show cause notices under the Central Excise laws and Service Tax laws in for the years 2007-08 onwards which in various stages of assessment as at 31 March 2023.The assessments are in progress and the Company has not received the assessment order in respect of the same. In certain cases, the Company has preferred an appeal which has been remanded back to the original authority for reassessment.
Other Disputes
The Company is also involved in other lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business, however, there are no such matters pending that the company expects to be material in relation to its business.
40. Details of inter- corporate deposits/Loans and Advances/Guarantees/ Securities given to related parties:
42. Disclosure with respect to Micro, Small and Medium Enterprises
"The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the âMicro, Small and Medium Enterprises Development Act, 2006'' (âthe MSMED Act''). However as on date, the Company has not received any information with regard to vendors who have obtained registration under the said act.
Accordingly, the Company has disclosed the entire amount as payable to vendors other than Micro, small and Medium enterprise. "
43. Confirmations
Balances ofTrade Receivables, Trade Payables, Loans and Advances, Receivables and Payables are subject to confirmation / reconciliation, if any
44. Earnings per share
Basic EPS amounts are calculated by dividing the income for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.The Company has no potentially dilutive instruments.
47 Leases
(a) Company as a lessee
Effective April 1,2019, the Company adopted Ind-AS 116, on all lease contracts, except for the leases with a term of twelve month or less (short term leases) and low value leases, existing on April 1,2019 using the modified retrospective method with Right-of-use assets recognised at an amount equal to the lease liabilities in the balance sheet.The Right-of-use assets as on March 31,2022 and March 31,2023 have been presented as part of Property, plant and equipment. For these short term leases, the Company recognises the lease payments as an operating expense on a straight line basis over the period of lease.
48. Export Benefit Incentives
Export benefit Incentives includes Duty Drawback (âDBKâ), Focus Marketing incentive scheme(FMS), Focus product scheme (FPS), Market Linked Product Scheme (MLPS), Incremental Exports incentive scheme, Merchandise Export India Scheme, Service tax rebate scheme (STR) and Remission of Duties or Taxes on Export Products Scheme .The Company has accounted an amount of Rs. 207.13 lakhs (31 March 2022 : Rs. 141.54 lakhs ) under "other operating revenue", being the net amount of credit under various export incentive schemes as announced under Foreign trade PolicyThe same will be either be sold or utilized for off-setting customs duty on future imports.The accumulated amount outstanding on this account as on 31 March 2023 is Rs. 193.70 lakhs (31 March 2022 is Rs. 418.74 lakhs) and the same is reflected under Export Incentives Receivable.
49. Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses and for which discrete financial information is available.The operating segmentsâ operating results are reviewed by the Chief Operating Decision Maker (Board of Directors) to make decisions about resources to be allocated to the segments and assess their performance.The Companyâs business activities fall within one component namely, "manufacturing and marketing of pharmaceutical formulations and active pharmaceutical ingredients". Accordingly, separate disclosures per the requirements of Ind AS 108, Operating Segments, are not considering necessary.
In accordance with Ind AS-108 âOperating Segmentsâ, information about geographical areas has been given in the Consolidated Financial Statements of Bal Pharma Limited and therefore, no separate disclosure on geographical areas is given in these financial statements
52. Note on Suspended Activities in Unit located at Pune
"The Management of the Company has decided to suspend the operations of its IV fluids and parenterals manufacturing facility at Pune as this unit has been consistently incurring operational losses due to various reasons such as higher costs of raw materials, escalation in production cost, employee cost, lack of adequate orders and thin margins on products manufactured.The above have led to a situation wherein any further efforts to restore the profitability of the unit will be futile.
This decision was taken as part of the restructuring exercise undertaken by the Company to streamline its operations and to exit from its noncore businesses, so that further deterioration of its noncore business revenues can be plugged. The management is considering both avenues of disinvestment of the Unit or partnering with an outside party, whichever is beneficial. "
(b) Defined Benefit Plans and other Long term plans
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the number of years of employment with the Company.
Actuarial Valuation for compensated absences is done as at the year end and the provision is made as per Company policy with corresponding (gain)/charge to the statement of profit and loss and it covers all regular employees. Obligation in respect of earned leave policy are actuarially determined as at the year end using the âProjected Unit Credit'' method.
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit and leave encashment
60. Financial Instruments - Financial risk management
The Company has exposure to following risks arising from financial instruments- Market Risk
- Credit Risk
- Liquidity Risk
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. 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 regularly to reflect changes in market conditions and the Company''s activities.
The Company''s 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 relations to the risks faced by the Company.
A Market Risk
1) Currency Risk
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and services and purchases from overseas suppliers in various foreign currencies. However as the Company exports as well as imports goods and services, the Company has a natural hedging due to its operations. Market Risk is the risk that changes in market prices such as foreign exchange rates will effect company''s income or value of its holding financial assets/ instruments.The exchange rate between the Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the Rupee appreciates/ depreciates against US dollar (USD), Euro (EUR), Dhirams (AED) and Others.
(c) Sensitivity Analysis
A reasonably possible change in foreign exchange rates by 5% would have increased/ (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables in particular interest rates remain constant
2 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 investments because of fluctuations in the interest rates, in cases where the 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 investments will fluctuate because of fluctuations in the interest rates.
a) Exposure to Interest Rate Risk
The interest rate profile of the Company''s interest-bearing financial instruments as reported :
(b) Fair value sensitivity analysis for fixed-rate instruments
The Company''s fixed rate instruments are carried at amortised cost.They are therefore not subject to interest rate risk as defined as per Ind AS 107, since neither the carrying amount nor future cash flows will fluctuate because of change in market interest rates.
(c) Cash flow sensitivity analysis for variable-rate instruments
A reasonable possible change of 2% (200 basis points) in interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below.This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
B Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Maturities of financial liabilities:
The table below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
C Credit Risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Companyâs exposure to credit risk is limited to the carrying amount of financial assets recognised at the date of the balance sheet, as summarised in the table below.The Company periodically assesses the financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual customer limits are set accordingly.
Credit risk on cash and cash equivalents is limited as they are generally invested in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Advances to Related Parties are for business purposes and the Company assesses the credit risk on the these advances on a regular basis and does not forsee any event of default.
Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with respect to trade receivables is mitigated by the Companyâs large customer base.Adequate expected credit losses are recognized as per the assessments and as such has provided for a expected credit loss of Rs.18.20 lakhs.( 31 March 2022: 15.88 lakhs)
61. Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity shareholders of the Company.The primary objective of the Companyâs capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. In order to maintain or adjust its capital structure, the Company may adjust the amount of dividends paid, return the capital to shareholders, issue new shares or adjust its short term borrowings. The current capital structure of the Company is equity based backed with borrowings.
62. Recoverability from Subsidiary Companies ^
The Company has a outstanding recoverability of Rs.869.89 lakhs and Rs.152.23 lakhs from it subsidiaries Lifezen Healthcare Private Limited and Balance Clinic LLP respectively. The said subsidiaries have incurred losses and have a negative net worth. However the management is confident that with infusion of additional funds, introduction of new brands and renewed marketing, the companies can be revived and the amounts recovered.
63. Merger with its wholly owned subsidiary
The Company has filed application with NCLT for merger of Golden Drugs Pvt Ltd , a wholly owned subsidiary of the Company.
65. Additional Regulatory Information
i. The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed under Property, Plant and Equipment in the financial statements are held in the name of the Company.
ii. There are no proceedings that have been initiated or pending against the Company for holding any any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the Rules made thereunder.
iii. The Company has borrowings from banks or financial institutions on the basis of security of current assetsfor the year ended March 2023. The Company has filed quaterly returns and statements with the Banks or Financial Institutions. Since there will normally be a backlog in the updation of books of accounts ,The returns submitted to bank are not in agreement with the books of accounts.
iv. The Company has not been declared as a wilful defaulter by any bank or financial institution or any other lender
v. The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
vi. The details of charges and satisfaction of charges have been registered with Registrar of Companies within the statutory period
vii. Utilisation of Borrowed Funds and Share premium
(A) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
(B) The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
The Company declares that the Relevant Provisions of the FEMA Act , 1999 and Companies Act have been Complied with and are not in violation of the Prevention of Money-LaunderingAct ,2002.
viii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
ix. The Company has not traded or invested in Crypto currency orVirtual Currency during the financial year.
Mar 31, 2018
1. Company Overview
Bal Pharma Limited (the company) is a Public Limited Company domiciled in India and incorporated under provisions of the Companies Act, 1956. Its shares are listed on two recognized stock exchanges in India. The company is engaged in the manufacturing and selling of pharmaceutical products. The company caters to both domestic and international markets.
1.1 Basis of Preparation of Financial Statements
a) Compliance with Ind AS
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
These financial statements for the year ended 31 March 2018 are the first the Company has prepared in accordance with Ind AS. Refer to note 51 for information on how the Company adopted Ind AS.
b'' Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:
- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments),
- Defined Benefits and other long term employment benefits
c) Functional and Presentational Currency
The financial statements are presented in INR which is the functional currency for the Company. All amounts disclosed in the financial statements and notes have been rounded to the nearest lakhs.
d) Use of Estimates and Judgments
The preparation of financial statements in conformity with Ind AS requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognized prospectively.
The estimates and underlying assumptions are reviewed by management at each reporting date. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of revision or future periods if the revision affects both current and future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
Judgments
1) Recognition of Deferred Income Taxes
2) Recognition Research and Developments Costs (Note no 37)
Estimates
1) Useful lives of various of Property, Plant and Equipment (Note 3 & 4)
2) Fair Value of Financial Instruments (Note No 48)
3) Accounting for Defined Benefit Plan (Note No 43)
4) Expected Credit Losses
e) Current vs Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The group has identified twelve months as its operating cycle.
c) Rights, preferences and restrictions attached to equity shares:
The Company has only one class of equity shares having par value of '' 10 each. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders'' meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders'' meeting.
The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
d) There have been no buy back of shares, issue of shares by way of bonus share or issue of share pursuant to contract without payment being received in cash for the period of five years immediately preceding the balance sheet date.
A) Details of securities, repayment and interest of term loans (including current maturities of long-term debt):
(a) Loan from Exim Bank outstanding as at 31 March 2018: Rs. 2.40 Cr (31 March 2017 : Rs. 3.60 Cr : 01 April 2016: Rs. 4.80 Cr)
Security
i. The Loan is secured by first charge on the entire moveable property, Plant and equipment of the Company by way of hypothecation and pari passu first charge by way of equitable mortagage on all immovable property, Plant and equipment of Unit 1, 2, 3 and 4 of the Company.
Repayment and interest
ii. The loan was repayable in 20 equal quarterly installments of Rs. 0.30 crore each, starting from April 2015.
iii. Interest was payable on EXIM bank LTLMR plus 250 basis points which is currently at 12.70% per annum.
(b) Loan from Corporation Bank outstanding as at 31 March 2018: Rs. 9.52 Cr (31 March 2017: Rs. 10.84 Cr : 01 April 2016: Rs. 6.85 Cr)
Security
i. The loan is secured by entire moveable property, plant and equipment of the Company, both present and future, belonging to unit I, unit 2, unit 4 of the Company.
Repayment and interest
ii. The loan was repayable in 80 monthly installments starting from April 2017.
iii. Interest was payable on LTLMR plus 5.60% which is currently at 13.75% per annum
(c) Loan from Yes Bank outstanding as at 31 March 2018: Rs. 3.56 cr (31 March 2017 : Rs. 0.75 Cr : 01 April 2016: Rs. Nil)
Security
i. The loan is secured by mortagage of the property of unit 5, sangli and personal guarantee of managing director.
Repayment and interest
ii. The loan was repayable in 48 monthly installments starting from June 2017.
iii. Interest was payable on at 10.75% per annum
(d) Loan from Tata Capital outstanding as at 31 March 2018: Rs. 14.00 Cr (31 March 2017 : Rs. Nil : 01 April 2016: Rs. Nil)
Security
i. The loan is secured by mortagage of the property of unit 6, Udaipur and personal guarantee of managing director.
Repayment and interest
ii. The loan was repayable in 48 monthly installments starting from June 2017.
iii. Interest was payable on at 10.75% per annum
(e) Loan from The South India Bank Limited outstanding as at 31 March 2018: '' 4.86 Cr (31 March 2017 : Rs. 5.16 Crores :01 April 2016: Rs. Nil) "
Security
i. The loan is secured by mortagage of the Land at Vasanth Nagar
Repayment and interest
ii. The loan was repayable in 154 monthly installments starting from March 2018.
iii. Interest was payable on at 10.65% per annum
(f) Loan from The South India Bank Limited outstanding as at 31 March 2018: Rs. 3.39 Cr (31 March 2017: Rs. Nil : 01 April 2016: Rs. Nil) "
Security
i. The loan is secured by mortagage of the Land at Vasanth Nagar
Repayment and interest
ii. The loan was repayable in 180 monthly installments starting from April 2018.
iii. Interest was payable on at 10.65% per annum
(g) Loan from Kotak Mahindra Bank Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.17 Cr (31 March 2017: Rs. 0.63 " Cr : 01 April 2016: Rs. 1.01 Cr) "
Repayment and interest
i. The loan was repayable in 36 monthly installments starting from July 2015.
ii. Interest was payable on at 11.75% per annum
(h) Loan from Kotak Mahindra Bank Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.59 Crores (31 March 2017: Rs. Nil 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 36 monthly installments starting from Aug 2017.
ii. Interest was payable on at 16.50 % per annum
B) Details of securities, repayment and interest of Other loans (including current maturities of long-term debt):
(a) Loan from Magma Fincorp Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.53 Cr (31 March 2017: Rs. Nil : 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 24 monthly installments starting from Aug 2017.
ii. Interest was payable on at 16.00% per annum
(b) Loan from Tata Capital Financial Services Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.53 Cr (31 March 2017: Rs. Nil : 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 24 monthly installments starting from July 2017.
ii. Interest was payable on at 15.94% per annum
(c) Loan from Capital First Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.62 Cr (31 March 2017: Rs. Nil : 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 24 monthly installments starting from Aug 2017.
ii. Interest was payable on at 15.00% per annum
(d) Loan from Equitas Small Finance Bank Limited (Unsecured)outstanding as at 31 March 2018: Rs. 0.44 Cr (31 March 2017: Rs. Nil : 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 36 monthly instalments starting from November 2017.
ii. Interest was payable on at 16.50% per annum
(e) Loan from Neo Growth Private Limited (Unsecured) outstanding as at 31 March 2018: Rs. 0.44 Cr (31 March 2017 : Rs. Nil : 01 April 2016: Rs. Nil)
Repayment and interest
i. The loan was repayable in 36 monthly instalments starting from May 2018.
ii. Interest was payable on at 18.00% per annum
C) The Vehicle Loans have been taken on the hypothecation of vehicles
D) There are no defaults in repayment of principal or interest to lenders as at the balance sheet date.
All secured loans payable on demand and secured short term loans from banks are secured by first charge by way of hypothecation of all the stocks, book debts and other current assets (both present and future) and carries interest rate @ 9.75% to 13.65%
Note: The Company is also involved in other lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business, however, there are no such matters pending that the company expects to be material in relation to its business.
2 Disclosure with respect to Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the âMicro, Small and Medium Enterprises Development Act, 2006'' (âthe MSMED Act''). Accordingly, based on the information available with the Company, no amount is payable in respect of such entities as at 31 March 2018. (31 March 2017: Nil, 1 April, 2016: Nil)
3 Confirmations
Balances of Trade Receivables, Trade Payables, Loans and Advances, Receivables and Payables are subject to confirmation / reconciliation, if any
4 Subsequent Events
Declaration of Dividend - The Board of Directors of the Company has proposed a 10% dividend on face value of the shares, subject to the approval by Shareholders at AGM
5 Note on Suspended Activities in Unit located in Pune
The Management of the Company has decided to suspend the operations of its IV fluids and parenterals manufacturing facility at Pune as this unit has been consistently incurring operational losses due to various reasons such as higher costs of raw materials, escalation in production cost, employee cost, lack of adequate orders and thin margins on products manufactured. The above have led to a situation wherein any further efforts to restore the profitability of the unit will be furtile. This decision was taken as part of the restructuring exercise undertaken by the Company to streamline its operations and to exit from its noncore businesses, so that further deterioration of its noncore business revenues can be plugged.
6 Employee benefits
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the number of years of employment with the Company.
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for gratuity benefit.
7 Segment reporting
The Company is primarily engaged in a single business segment of manufacturing and marketing of pharmaceutical formulations and active pharmaceutical ingredients and is managed as ONE entity, for its various activities and is governed by a similar set of risks and returns.
In accordance with Ind AS-108 âOperating Segmentsâ, information about geographical areas has been given in the Consolidated Financial Statements of Bal Pharma Ltd., and therefore, no separate disclosure on geographical areas is given in these financial statements.
8 Export Benefits
The Company has accounted an amount of Rs. 339.51 Lakhs (31 March 2017 : Rs. 402.30 Lakhs ) being the net amount of credit under various export incentive schemes as announced under Foreign trade Policy. The management has represented that the same will be either received in cash or utilized for off-setting customs duty on future imports. The accumulated amount outstanding on this account as on 31 March 2018 is Rs. 494.31 Lakhs (31 March 2017: Rs. 603.81 Lakhs) and the same is reflected under Balance with Government Authorities
9 Leasing Arrangements
The company''s significant leasing arrangements are in respect of operating leases for premises (office, stores, godowns, residential, guest houses, etc.) Theses are cancelable operating leases and these lease agreements are normally renewed on expiry. The aggregate lease rental payable are charged as rent under note No. 34
10. Financial risk management
The Company has exposure to following risks arising from financial instruments- Market Risk
- Credit Risk
- Liquidity Risk
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. 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 regularly to reflect changes in market conditions and the Company''s activities.
The Company''s 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 relations to the risks faced by the Company.
A Market Risk
1) Currency Risk
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and services and purchases from overseas suppliers in various foreign currencies. Market Risk is the risk that changes in market prices such as foreign exchange rates will effect company''s income or value of its holding financial assets/ instruments. The exchange rate between the Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the Rupee appreciates/ depreciates against US dollar (USD), Euro (EUR), Dhirams (AED) and Others.
2) Cash Flows and 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 investments because of fluctuations in the interest rates, in cases where the 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 investments will fluctuate because of fluctuations in the interest rates.
(a) Exposure to Interest Rate Risk
The interest rate profile of the Company''s interest-bearing financial instruments as reported
(b) Fair value sensitivity analysis for fixed-rate instruments
The Company''s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk as defined Ind AS 107, since neither the carrying amount nor future cash flows will fluctuate because of change in market interest rates.
(c) Cash flow sensitivity analysis for variable-rate instruments
A reasonable possible change of 2% (200 basis points) in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
B Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Maturities of financial liabilities:
The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
C Credit Risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company''s exposure to credit risk is limited to the carrying amount of financial assets recognised at the date of the balance sheet, as summarised in the table below. The Company periodically assesses the financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual customer limits are set accordingly.
Credit risk on cash and cash equivalents is limited as generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Advances to Related Parties are for business purposes and The Company assesses the credit risk on the these advances on a regular basis and does not for see any event of default.
Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company is exposed to credit risk in the event of non-payment by customers. Credit risk concentration with respect to trade receivables is mitigated by the Company''s large customer base. Adequate expected credit losses are recognized as per the assessments and as such has provided for a expected credit loss of Rs. 15.50 Lakhs ( 31 March 2017 : Nil, 1 April 2016: Nil )
11 Capital Management
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plans. In order to maintain or adjust its capital structure, the Company may adjust the amount of dividends paid, return the capital to shareholders, issue new shares or adjust its short term borrowings. The current capital structure of the Company is equity based backed with short term borrowings.
12. First-time adoption of Ind AS
The Company''s financial statements for the year ended March 31, 2018 are the first financial statements prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the first Ind AS financial statements for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented.
All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Indian GAAP as at the transition date have been recognized directly in equity at the transition date.
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
1. Ind AS optional exemptions
a. Deemed Cost
As per Ind AS 101, a Company may elect to:
(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date.
(ii) use a previous GAAP revaluation of an property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:
a. Fair Value
b. or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.
(iii) se carrying value of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.
As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items property, plant and equipment. The same election has been made in respect of intangible assets also.
2. Ind AS mandatory exemptions
a. Estimates
An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (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 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP 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 previous GAAP
b. 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.
Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition.
c. Derecognition of financial assets and liabilities
As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or the after the date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.
d. Excise Duty
Under the previous GAAP excise duty was netted off against sale of products. However, under Ind AS, excise duty is included in sale of products and is separately presented as expense in the statement of profit and loss.
1 Property, Plant and Equipment
Under Ind AS, Property Plant and Equipment and Capital Work in Progress is reduced by the processing fees value amortised as per Effective Interest Rate (EIR) method.
2 Investment
Under the previous GAAP investments in equity instruments of subsidiaries were classified as longterm investments and were carried at cost less provision for other than temporary decline in the value of such investments. Ind AS, allow first-time adopters to use a âdeemed cost'' of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries in the separate financial statements. The Company has elected to measure investment in Lifezen Healthcare Pvt Ltd at fair value as of the transition date. The resulting fair value changes of these investments amounting to Rs. 116.00 have been recognised in retained earnings as at the date of transition. This decreased the retained earnings by Rs. 116.00 as at 1st April, 2016.
3 Proposed Dividend
Under the previous GAAP dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. As a result, liability for dividend is a non-adjusting event. Accordingly, the liability for proposed dividend as at 1st April, 2016 included under provisions in the previous GAAP has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased by an equivalent amount.
4 Retained Earnings
Retained earnings as at 1st April, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
5 Re-measurements of Post Employment Benefit Obligation
Under Ind AS, re-measurements 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 and loss. Under the previous GAAP these remeasurements were forming part of the Statement of Profit and Loss for the year.
6 Revenue from operations and Excise
Under previous GAAP revenue from sale of goods was presented net of excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as a separate line item. This has resulted in an increase in the revenue from operations and expenses for the year ended 31st March, 2017. The total comprehensive income for the year ended and equity as at 31st March, 2017 has remained unchanged.
7 Deferred Tax
Deferred tax under Ind AS has been recognized for temporary differences between tax base and the book base of the relevant assets and liabilities. Under IGAAP the deferred tax was accounted based on timing differences impacting the profit or loss for the period.
Mar 31, 2016
1. Unclaimed dividends on equity shares
Year Amount in ''
2008-09 1,72,169
2012-13 1,66,082
2013-14 2,26,473
2014-15 2,35,886 Total 8,00,611
Unpaid dividend amounting to Rs,1,87,786 pertaining to FY 2007-08 was transferred to Investor Education and Protection Fund during the current reporting period.
2. Balances of sundry debtors, sundry creditors, loans and advances, receivables and payables are subject to confirmation/reconciliation, if any
3. In the opinion of the board of director''s adequate provision has been made in the accounts for all known liabilities and the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the value stated in the balance sheet.
4. The company''s significant leasing arrangements are in respect of operating leases for premises (office, stores, god owns, residential, guest houses, etc.) Theses are cancelable operating leases and these lease agreements are normally renewed on expiry. The aggregate lease rentals payable is charged as rent under note 26.
5. The company has reclassified previous year figures to conform to current year''s classification.
Mar 31, 2015
1. Corporate Information
Bal Pharma Limited (the company) is a Public Limited Company domiciled
in India and incorporated under provisions of the Companies Act, 1956.
Its shares are listed on two recognized stock exchanges in India. The
company is engaged in the manufacturing and selling of pharmaceutical
products. The company caters to both domestic and international
markets.
2. Basis of preparation
The financial statements of the company have been prepared in
accordance with Indian Generally Accepted Accounting Principles
('GAAP') under the historical cost convention on the accrual basis.
The Company has prepared these financial statements to comply in all
material respects with the accounting standards notified under the
Companies (Accounting Standards) Rules, 2006, (as amended) which
continue to apply as per Section 133 of the Companies Act, 2013 (the
Act) read with rule 7 of the Companies (Accounts) rules, 2014, and
other recognized accounting practices and policies generally accepted
in India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates and adopts all recently
issued or revised accounting standards on an ongoing basis.
b. Terms/Rights attached to Equity shares
The company has only one class of equity shares having par value of '
10 per share. Each holder of equity shares is entitled to one vote per
share. The company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
c. Aggregate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting period : Nil (31
March 2014 : Nil)
d. The company had issued total 90,400 shares (31 March 2014: 90,400 )
during the period of five years immediately preceding the reporting
date on exercise of options granted under the employee stock option
plan (ESOP) wherein part consideration was received in form of employee
services.
As per records of the company, including its register of
shareholders/members and other declaration received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownership of shares.
f. Shares reserved for issue under options
i. During the FY 2012-13, 2,298,748 preferential share warrants
convertible into equivalent number of equity shares of Rs. 10/- each at a
premium of Rs. 11 per share, had been issued to the promoters/strategic
investors by the company on 19 October 2012. During the year, the
preferential share warrants outstanding as at 1 April 2014 got
converted in to equivalent number of equity shares.
ii. During the year 1,300,000 preferential share warrants convertible
into equivalent number of equity shares of Rs. 10/- each at a premium of
Rs. 52 per share, had been issued to the under mentioned strategic
investors by the company on 18 August 2014, from whom 25% of the issue
price amounting to Rs. 20,150,000 has been received in advance entitling
the warrant holder to apply for an equivalant number of equity shares
on payment of balance 75% of the issue price within 18 months from the
date of allotment of warrants. As on 31 March 2015 all the warrants are
outstanding and equivalent number of equity share are reserved for
issue against the same. Balance amount outstanding against these
warrants amounts to Rs. 60,450,000.
a. Term loan obtained from EXIM Bank of Rs. 6.00 Crores towards expansion
of research & development centre at Bangalore and expenditure
pertaining to R&D activities, is secured by pari passu first charge on
the entire moveable fixed assets of the company by way of hypothecation
and pari passu first charge by way of equitable mortgage on all
immovable fixed assets of the company, both present and future, more
particularly unit1, unit 2, unit 3 & Unit 4 of the company and personal
guarantee of managing director. The loan is repayable in 20 equal
quarterly installment of Rs. 0.30 Crore each, starting from April 2015
and carries interest @ EXIM bank LTMLR plus 250 basis points, which is
currently @ 12.70%.
b. During the year the company was sanctioned a term loan of Rs. 23.45
Crores by Corporation Bank towards up gradation and expansion of the
manufacturing facilities at unit 1,2 & 4. The loan is secured by
Mortgage on paripassufirst charge with EXIM bank of the industrial
property at unit 1, 2 & 4 and Hypothecation on pari passu first charge
basis with EXIM bank of the entire movable fixed assets of the company,
both present and future, belonging to unit 1, unit 2 & 4 of the
company. The loan is repayable in 80 installments after a moratorium
period of 24 months and carries interest @ 14%. An amount of Rs. 0.75
crores was availed as at 31 March 2015 against the said sanction.
c. The vehicle loans are secured by hypothecation of vehicles taken on
loan.
3. Export benefits:
The Company has accounted an amount of Rs. 43,125,370 (31 March 2014: Rs.
35,919,992) being the net amount of credit under various export
incentive schemes as announced under Foreign trade Policy. The same
will be either received in cash or utilized for off-setting customs
duty on future imports. The accumulated amount outstanding on this
account as on 31 March 2015 is Rs. 45,585,361 (31 March 2014: Rs.
51,522,074) and the same is reflected under short-term loans and
advances.
4. Based on the information available with the company, principal
amount due to micro and small enterprises is 1,119 (31 March 2014: Rs.
1,635). Further interest paid during the year and interest due at the
end of the year to micro and small enterprises is Rs. Nil (31 March 2014:
Rs. Nil).
5. Expenditure on research and development:
An amount of Rs. 16,632,682 (31 March 2014: Rs. 13,050,019) has been
incurred during the year on research and development of new products
and processes in the R & D centre. Amount written off during the year
on account of the above was Rs. 16,560,061 (31 March 2014: Rs. 15,025,617).
The balance on this account as on 31 March 2015: Rs. 48,245,654 (31 March
2014: Rs. 48,655,922).
6. The company has provided for Rs. 2,42,414/- (31 March 2014: Rs.
262,215) being excise duty on finished goods lying at various
manufacturing units at the end of reporting period.
7. Contingent liabilities not provided for:
- Letter of credit Rs. 103,179,442 (31 March 2014: Rs. 1,44,441,190)
- Estimated value of contracts remaining to be executed on capital
account and not provided for Rs. 28,332,935 (31 March 2014: Rs. 2,878,000)
- Claims against company not acknowledged as debts comprises:
Amount in Rs.
Nature 31 March 2015 31 March 2014
Excise & Customs 24,514,120 6,050,923
Service Tax 10,836,228 10,836,228
Sales Tax 1,788,034 1,788,034
Income Tax 8,950,439 -
Total (*) 46,088,821 18,675,185
(*) Pre - deposit under protest Rs. 643,729 (Previous year Rs. 777,006)
- The company is also involved in other lawsuits, claims,
investigations and proceedings including patent and commercial matters,
which arise in the ordinary course of business, however, there are no
such matters pending that the company expects to be material in
relation to its business.
8. The company has given counter guarantees to bank against guarantees
issued by them on behalf of the company Rs. 31,441,990 (31 March 2014: Rs.
18,997,040).
9. Effective from 1 April 2014, the Company has changed the
depreciation charge based on revised remaining useful lives of the
assets as per requirement of schedule II of the Companies Act, 2013.
Due to this, the depreciation charge for the year ended 31 March 2015
is higher by Rs.17,327,086. Further, based on transitional provisions as
provided in Schedule II, an amount of Rs. 7,010,983 (net of deferred tax)
has been charged to accumulated retained earnings (Surplus) in respect
of asset whose remaining useful life is nil as on 1 April 2014.
10. Segment information
The company is primarily engaged in a single business segment of
manufacturing and marketing of pharmaceutical formulations and active
pharmaceutical ingredients and is managed as ONE entity, for its
various activities and is governed by a similar set of risks and
returns.
Geographical segments
In the view of the management, the Indian and export markets represent
geographical segments.
11. Balances of sundry debtors, sundry creditors, loans and advances,
receivables and payables are subject to confirmation/reconciliation, if
any.
12. In the opinion of the board of directors adequate provision has
been made in the accounts for all known liabilities and the current
assets, loans and advances have a value on realization in the ordinary
course of business at least equal to the value stated in the balance
sheet.
13. The company's significant leasing arrangements are in respect of
operating leases for premises (office, stores, godowns, residential,
guest houses, etc.) Theses are cancelable operating leases and these
lease agreements are normally renewed on expiry. The aggregate lease
rentals payable are charged as rent under note 26.
14. The company has reclassified previous year figures to conform to
current year's classification.
Mar 31, 2014
1. Corporate Information
Bal Pharma Limited (the company) is a Public Limited Company domiciled
in India and incorporated under provisions of the Companies Act, 1956.
Its shares are listed on two recognized stock exchanges in India. The
company is engaged in the manufacturing and selling of pharmaceutical
products. The company caters to both domestic and international
markets.
2. Basis of preparation
The financial statements of the company have been prepared and
presented in accordance with Indian Generally Accepted Accounting
Principles (''GAAP'') under the historical cost convention on the accrual
basis. GAAP comprises accounting standards notified by the Central
Government of India under the Companies (Accounting Standards) Rules,
2006, (as amended), other pronouncements of Institute of Chartered
Accountants of India and the relevant provisions of Companies Act,
1956.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates and adopts all recently
issued or revised accounting standards on an ongoing basis.
a. Terms/Rights attached to Equity shares
The company has only one class of equity shares having par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share. The company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
b. Aggregate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting period : Nil (31
March 2013 : Nil)
c. The company had issued total 90,400 shares (31 March 2013: 1,27,400
) during the period of five years immediately preceding the reporting
date on exercise of options granted under the employee stock option
plan (ESOP) wherein part consideration was received in form of employee
services.
As per records of the company, including its register of
shareholders/members and other declaration received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownership of shares.
d. Shares reserved for issue under options
i. During the FY 2012-13, 2,298,748 preferential share warrants
convertible into equivalent number of equity shares of Rs. 10/- each at
a premium of Rs. 11 per share, had been issued to the under mentioned
promoters/strategic investors by the company on 19 October 2012, from
whom 25% of the issue price amounting to Rs. 12,068,441 had been
received in advance entitling the warrant holder to apply for an
equivalent number of equity shares on payment of balance 75% of the
issue price within 18 months from the date of allotment of warrants. As
on 31 March 2014 warrants issued to Anita Siroya got converted into
equity share capital on receipt of the balance amount of the issue
price. All other warrants are outstanding as at 31 March 2014 and
equivalent number of equity shares are reserved for issue against the
same. Balance amount outstanding against these warrants amounts to Rs.
19,616,734.
e. Term loan obtained from EXIM Bank of Rs. 6.00 Crores towards the
expansion of research & development centre at bangalore and expenditure
pertaining to R&D activities, is secured by pari pasi first charge on
the entire moveable fixed assets of the company by way of hypothecation
and pari pasu first charge by way of equitable mortagage on all
immovable fixed assets of the company, both present and future, more
particularly unitI, unit 2, unit 3 & Unit 4 of the company and personal
guarantee of managing director. The loan is repayable in 20 equal
quarterly installment of Rs. 0.30 Crore each, starting from April 2015
onwards and carries interest @ Exim bank LTMLR plus 250 basis points,
which is currently @ 12.70%.
f. Term loan of Rs. 0.90 Crores obtained from Kotak Mahindra Prime Ltd
is secured by hypothecation of vehicles and is repayable in 28 equal
monthly installments of Rs. 3,78,637/- each and carries interest @
14.73%. There are 9 monthly installments outstanding as on 3! March
2014.
g. The vehicle loans are secured by hypothication of vehicles taken on
loan.
Short term borrowings from banks obtained under consortium arrangement
with pari passu charge is secured by hypothecation of stock and book
debts and second charge on all movable fixed assets. Cash credit is
repayable on demand and carries interest rate @ 13.45% p.a to 15.50%
p.a.
3. Export benefits:
The Company has accounted an amount of Rs. 35,919,992 (31 March 2013:
Rs. 28,065,977) being the net amount of credit under the DEPB and other
schemes as announced by the Import Export Policy. The same will be
utilized for off-setting the customs duty on future imports. The
accumulated amount outstanding on this account as on 31 March 2014 is
Rs. 51,522,074 (31 March 2013: Rs. 40,181,523) and the same is
reflected under short-term loans and advances.
4. Based on the information available with the company, principal
amount due to micro and small enterprises is Rs. Nil (31 March 2013:
Rs. Nil). Further interest paid during the year and interest due at the
end of the year to micro and small enterprises is Rs. Nil (31 March
2013: Rs. Nil).
5. Expenditure on research and development:
An amount of Rs. 13,050,019 (31 March 2013: Rs. 11,637,462) has been
incurred during the year on research and development of new products
and processes in the R & D Centre. Amount written off during the year
on account of the above was Rs. 15, 025,617 (31 March 2013: Rs. 16,
972,153). The balance on this account as on 31 March 2014: Rs.
48,655,922 (31 March 2013: Rs. 50,631,520).
6. The Company has provided for Rs. 262,215 (31 March 2013: Rs.
496,053) being excise duty on finished goods lying at various
manufacturing units at the end of reporting period.
7. Contingent liabilities not provided for:
* Letter of credit Rs. 144,441,190 (31 March 2013: Rs. 102,553,564)
* Estimated value of contracts remaining to be executed on capital
account and not provided for Rs. 2,878,000 (31 March 2013: Rs.
3,585,644)
* Claims against company not acknowledged as debts comprises:
Amount in Rs.
Nature 31 March 2014 31 March 2013
Excise & Customs 6,050,923 4,094,194
Service Tax 10,836,228 10,836,228
Sales Tax 1,788,034 749,720
Total (*) 18,675,185 (*) 15,680,142
(*) Pre - deposit under protest Rs. 777,006 (Previous year Rs. 517,006)
* The Company is also involved in other lawsuits, claims,
investigations and proceedings including patent and commercial matters,
which arise in the ordinary course of business, however, there are no
such matters pending that the company expects to be material in
relation to its business.
8. The company has given counter guarantees to bank against
guarantees issued by them on behalf of the company Rs. 18,997,040 (31
March 2013: Rs. 11,222,098).
9. Segment information
The company is primarily engaged in a single business segment of
manufacturing and marketing of pharmaceutical formulations and active
pharmaceutical ingredients and is managed as ONE entity, for its
various activities and is governed by a similar set of risks and
returns.
Geographical segments
In the view of the management, the Indian and export markets represent
geographical segments.
10. Balances of sundry debtors, sundry creditors, loans and advances,
receivables and payables are subject to confirmation/reconciliation, if
any.
11. In the opinion of the board of directors adequate provision has
been made in the accounts for all known liabilities and the current
assets, loans and advances have a value on realization in the ordinary
course of business at least equal to the value stated in the balance
sheet.
12. The company''s significant leasing arrangements are in respect of
operating leases for premises (office, stores, godowns, residential,
guest houses, etc.) Theses are cancelable operating leases and these
lease agreements are normally renewed on expiry. The aggregate lease
rentals payable are charged as rent under note 26.
13. The company has reclassified previous year figures to conform to
current year''s classification.
Mar 31, 2013
1. Corporate Information
Bal Pharma Limited (the company) is a Public Limited Company domiciled
in India and incorporated under provisions of the Companies Act, 1956.
Its shares are listed on two recognized stock exchanges in India. The
company is engaged in the manufacturing and selling of pharmaceutical
products. The company caters to both domestic and international
markets.
2. Basis of preparation
The financial statements of the company have been prepared and
presented in accordance with Indian General Accepted Accounting
Principles (''GAAP'') under the historical cost convention on the accrual
basis. GAAP comprises accounting standards notified by the Central
Government of India under the Companies (Accounting Standards) Rules,
2006, (as amended), other pronouncements of Institute of Chartered
Accountants of India and the relevant provisions of Companies Act,
1956.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates and adopts all recently
issued or revised accounting standards on an ongoing basis.
3. During the year, company reclassified authorized share capital of
4,00,000 redeemable preferential shares of Rs. 100 each in to 40,00,000
equity shares of Rs. 10 each, in order to accommodate the proposed
preferential issue of share warrants and with a perception of non
utilization of redeemable preferential shares in foreseeable future
after necessary special resolution passed at the Annual General Meeting
held on 21 September 2012. Consequently, the current authorized share
capital of the company, post reclassification of redeemable
preferential shares isRs. 15,00,00,000/-divided into 1,50,00,000 equity
shares of Rs. 10 each.
4. Export benefits:
The Company has accounted an amount of Rs.28,065,977 (3 I March 2012:
Rs.23,594,720) being the net amount of credit under the DEPB and other
schemes as announced by the Import Export Policy. The same will be
utilized for off-setting the customs duty on future imports. The
accumulated amount outstanding on this account as on 3 I March 2013 is
f40,181,523 (31 March 2012: Rs.27,186,366) and the same is reflected
under short-term loans and advances.
5. Based on the information available with the company, principal
amount due to micro and small enterprises is f Nil (3 I March 2012:
Rs.Nil). Further interest paid during the year and interest due at the
end of the year to micro and small enterprises is f Nil (3 I March
2012: Rs.Nil).
6. Expenditure on research and development:
An amount of f I 1,637,462 (31 March 2012: Rs. I 1,398,007) has been
incurred during the year on research and development of new products
and processes in the R & D Centre. The same is proposed to be amortized
over a period of 10 years commencing from the year of commercial
production. Amount written off during the year on account of the above
was Rs. 16,972,153 (3 I March 2012: Rs. 14,183,620). The balance on this
account as on 3 I March 2013: Rs.50,63 1,520 (3 I March 2012: Rs.55,966,2I
I).
7. Related party disclosures:
Name of related parties and related party relationship
Related parties where control/significant influence exist or with whom
transactions have taken place during the year:
i. Enterprises where principal/ promoter shareholders have control or
significant influence (Significant interest entities): Micro Labs Ltd -
Enterprise owned by some of the promoter shareholders
ii. Others:
Desa Marketing International - Enterprise owned by the managing
director of the company
Siroya Developers (P) Ltd. - Enterprise owned by relatives of managing
director of the company
Siroya Constructions - Enterprise over which the managing director of
the company exercises joint control with other partners
Siroya Wellness - Enterprise over which the managing director of the
company exercises joint control with other partners
Key managerial personnel represented on the board
Shailesh D Siroya - Managing director (MD)
Dr.SPrasanna - Whole time director (WTD)
ShrenikD Siroya - Director
8. The Company has provided for Rs. 496,053 (3 I March 2012:Rs. 634,716)
being Excise Duty on Finished Goods lying at various manufacturing
units at the end of reporting period.
9. Contingent liabilities not provided for:
Letter of credit Rs. 102,553,564 (3 I March 2012: Rs. 137,439,654)
Estimated value of contracts remaining to be executed on capital
account and not provided for Rs. 3,585,644 (3 I March 2012:Rs. 4,490,588)
Claims against company not acknowledged as debts comprises:
10. The company has given counter guarantees to bank against
guarantees issued by them on behalf of the company Rs. I 1,222,098 (3 I
March 2012:Rs. 13,672,151).
11. Employee stock option scheme
Bal Pharma Limited''s Employee stock option scheme - 2006 (ESOP 2006) :
The Company instituted the 2006 Plan for all eligible employees in
pursuance of the special resolution approved by the shareholders in the
Annual General Meeting held on 23-09-2004. The Scheme covers all non
promoter directors and employees and its subsidiaries. Under the
scheme, the compensation Committee of the Board (''the Committee'') shall
administer the Scheme and grant stock options to eligible directors and
employees of the Company and its subsidiaries. The Committee shall
determine the employees eligible for receiving the options, the number
of options, the number of options to be granted, the exercise price,
the vesting period and the exercise period. The vesting period is
determined for the options issued on the date of the grant.
The market value of a share on each grant date is defined as the
average of the two weeks high and low price of the share preceding the
date of grant of option on the stock exchange where there is highest
trade volume during that period.
In case of termination of employment, all non-vested options would
stand cancelled. Options that have vested but have not been exercised
can be exercised within the time prescribed under each option agreement
by the Committee, failing which they would stand cancelled.
The company under ESOP-2006 had granted 2,19,500 options to eligible
employees. The vesting period for the options granted varies from 12 to
60 months.
12. Segment information
The Company is primarily engaged in a single business segment of
manufacturing and marketing of Pharmaceutical Formulations and Active
Pharmaceutical Ingredients and is managed as ONE entity, for its
various activities and is governed by a similar set of risks and
returns.
Geographical segments
In the view of the management, the Indian and Export Markets represent
geographical segments.
13. Balances of Sundry debtors, sundry creditors, loans and advances,
receivables and payables are subject to confirmation/reconciliation, if
any
14. In the opinion of the Board of directors adequate provision has
been made in the accounts for all known liabilities and the current
assets, loans and advances have a value on realization in the ordinary
course of business at least equal to the value stated in the balance
sheet.
15. The Company''s significant leasing arrangements are in respect of
operating leases for premises (office, stores, godowns, residential,
guest houses, etc.) Theses are cancelable operating leases and these
lease agreements are normally renewed on expiry. The aggregate lease
rentals payable are charged as rent under note 26.
16. The company has reclassified previous year figures to conform to
this year''s classification.
Mar 31, 2012
1. Corporate Information
Bal Pharma Limited (the company) is a Public Limited Company domiciled
in India and incorporated under provisions of the Companies Act, 1956.
Its shares are listed on two recognized stock exchanges in India. The
company is engaged in the manufacturing and selling of pharmaceutical
products. The company caters to both domestic and international
markets.
2. Basis of preparation
The financial statements of the company have been prepared and
presented in accordance with Indian Generally Accepted Accounting
Principles ('GAAP') under the historical cost convention on the accrual
basis. GAAP comprises accounting standards notified by the Central
Government of India under the Companies (Accounting Standards) Rules,
2006, (as amended), other pronouncements of Institute of Chartered
Accountants of India and the relevant provisions of Companies Act,
1956.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates and adopts all recently
issued or revised accounting standards on an ongoing basis.
a. Terms/Rights attached to equity shares
The company has only one class of equity shares having par value of
Rs..10 per share. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
In addition, the company has issued total 127,400 shares (31 March
2011: 37,000 ) during the period of five years immediately preceding
the reporting date on exercise of options granted under the employee
stock option plan (ESOP) wherein part consideration was received in
form of employee services.
As per records of the company, including its register of
shareholders/members and other declaration received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownership of shares.
b. Shares reserved for issue under options
For details of shares reserved for issue under the employee stock
option plan (ESOP) of the company, please refer note no. 40.
a. Term Loan from State Bank of India of Rs.. 2.30 Crores obtained
during the financial year 2009-10 and repayable in 10 monthly
installments of Rs.. 23 Lakh each. The term is secured by hypothecation
of assets of Unit II and Unit III, and Unit IV funded by them. Term
loan is further secured by collateral securities & personal guarantees
of Directors and carries interest rate @ 16.5%.
b. Term loans obtained from EXIM Bank of Rs..21.55 Crores towards
establishment of Formulation Plant at Uttaranchal and repayable in
quarterly installments. The term loan is secured by first pari passu
charge on the entire immovables and Hypothecation of whole of moveable
fixed as- sets, both present and future of the Company including:
i. Moveable plant and machinery, Equipment, Appliances, furniture,
vehicles, machinery spares and stores, tools and accessories, whether
or not installed.
ii. Related movables in the course of transit or delivery whether now
belonging or which may hereafter belong to the Company or which may be
held by any person at any place within or outside India to the order or
disposition of the company and all document or title including bills of
lading, shipping documents, policies of insurance and other instruments
and documents relating to such movables together with benefits of all
rights thereto. Term loan is further secured by collateral securities &
personal guarantees of Directors and carries interest rate @ 12%.
c. The vehicle loans are secured by hypothecation of vehicles taken on
loan.
Short term borrowings from banks is secured under a Consortium
arrangement with pari passu charge is secured by hypothecation of stock
and book debts and second charge on all the movable fixed assets. Cash
credit is repayable on demand and carries interest rate @ 14.50% p.a to
15.25% p.a.
3. export benefits:
The Company has accounted an amount of Rs.. 23,594,720 (31 March 2011: Rs.
16,875,462) being the net amount of credit under the DEPB and other
schemes as announced by the Import Export Policy. The same will be
utilized for off-setting the customs duty on future imports. The
accumulated amount outstanding on this account as on 31 March 2012 is
Rs.27,186,366 (31 March 2011: Rs. 21,118,281) and the same is reflected
under short-term loans and advances.
4. Based on the information available with the company, principal
amount due to micro and small enterprises is Rs. Nil (31 March 2011: Rs.
Nil). Further interest paid during the year and interest due at the
end of the year to micro and small enterprises is Rs. Nil (31 March
2011: Rs. Nil).
5. expenditure on research and development:
An amount of Rs. 11,398,007 (31 March 2011: Rs. 12,805,725) has been
incurred during the year on research and development of new products
and processes in the R & D Centre. The same is proposed to be amortized
over a period of 10 years commencing from the year of commercial
production. Amount written off during the year on account of the above
was Rs.14,183,620 (31 March 2011: Rs.5,458,572). The balance on this
account as on 31 March 2012: Rs. 55,966,211 (31 March 2011: Rs.
58,751,824).
6. Related party disclosures:
- Name of related parties and related party relationship
Related parties where control/significant influence exist or with whom
transactions have taken place during the year:
i. Erstwhile subsidiary - Basav Chem Limited
ii. Enterprises where principal/ promoter shareholders have control or
significant influence (Significant interest entities):
Micro Labs Ltd - Enterprise owned by some of the promoter shareholders
iii. Others:
Desa Marketing International - Enterprise owned by the Managing
director of the Company Siroya Developers (P) Ltd. - Enterprise owned
by relatives of Managing director of the company
Siroya Constructions - Enterprise over which the Managing director of
the company exercises joint control with other partners
Siroya Wellness - Enterprise over which the Managing director of the
company exercises joint control with other partners
Key managerial personnel represented on the board
Shailesh D Siroya - Managing director (MD)
Dr. S P Prasanna - Whole time director (WTD)
Shrenik D Siroya - Director
7. The Company has provided for Rs. 1,231,948 (31 March 2011: Rs.
1,227,343) being Excise Duty on Finished Goods lying at various
manufacturing units at the end of reporting period.
8. Contingent liabilities not provided for:
- Guarantees issued by Company's bankers Rs.13,672,151 (31 March 2011:
Rs.11,452,970)
- Letter of credit Rs. 137,439,654 (31 March 2011: Rs. 111,713,626)
- Estimated value of contracts remaining to be executed on capital
account and not provided for Rs. 4,490,588 (31 March 2011: Rs. NIL)
- The claim of duty and penalty of Rs 868,598 for the period May 2000 to
November 200! by Central Excise in respect of Unit III is being
contested and under the directions of CESTAT , Mumbai a pre-deposit of
Rs. 30,000 has been made. The same is still pending decision.
- A Sales Tax claim of Rs. 749,720 on treating stock transfer as sales in
Ernakulam by the Commercial Taxes, Special Circle !, KGST is being
contested and a deposit of Rs. 253,729 has been made. The application is
being heard by the Deputy Commissioner, Ernakulam and is still pending
decision.
- The Company is also involved in other lawsuits, claims,
investigations and proceedings including patent and commercial matters,
which arise in the ordinary course of business, however, there are no
such matters pending that the company expects to be material in
relation to its business.
9. Employee stock option scheme
Bal Pharma Limited's Employee stock option scheme - 2006 (ESOP 2006) :
The Company instituted the 2006 Plan for all eligible employees in
pursuance of the special resolution approved by the shareholders in the
Annual General Meeting held on 23-09-2004. The Scheme covers all non
promoter directors and employees and its subsidiaries. Under the
scheme, the compensation Committee of the Board ('the Committee') shall
administer the Scheme and grant stock options to eligible directors and
employees of the Company and its subsidiaries. The Committee shall
determine the employees eligible for receiving the options, the number
of options, the number of options to be granted, the exercise price,
the vesting period and the exercise period. The vesting period is
determined for the options issued on the date of the grant.
The market value of a share on each grant date is defined as the
average of the two weeks high and low price of the share preceding the
date of grant of option on the stock exchange where there is highest
trade volume during that period.
In case of termination of employment, all non-vested options would
stand cancelled. Options that have vested but have not been exercised
can be exercised within the time prescribed under each option agreement
by the Committee, failing which they would stand cancelled.
The company under ESOP-2006 had granted 2, 19,500 options to eligible
employees. The vesting period for the options granted varies from 12 to
60 months.
10. Segment information
The Company is primarily engaged in a single business segment of
manufacturing and marketing of Pharmaceutical Formulations and Active
Pharmaceutical Ingredients and is managed as ONE entity, for its
various activities and is governed by a similar set of risks and
returns.
Geographical segments
In the view of the management, the Indian and Export Markets represent
geographical segments.
11. Balances of Sundry debtors, sundry creditors, loans and advances,
receivables and payables are subject to confirmation/reconciliation, if
any
12. In the opinion of the Board of directors adequate provision has
been made in the accounts for all known liabilities and the current
assets, loans and advances have a value on realization in the ordinary
course of business at least equal to the value stated in the balance
sheet.
13. The Company's significant leasing arrangements are in respect of
operating leases for premises (office, stores, godowns, residential,
guest houses, etc.) Theses are cancelable operating leases and these
lease agreements are normally renewed on expiry. The aggregate lease
rentals payable are charged as rent under note 26.
14. Accounting for amalgamation
The Honorable High Court of Karnataka, on 26 August 2011, sanctioned a
scheme of amalgamation (the scheme) under sections 391 to 394 of the
Companies Act, 1956. In accordance with the scheme, Basav Chem Limited
(transferor company) merges with the company with retrospective effect
from 1 April 2009. However, since the sanction to the scheme was given
during the year, the assets and liabilities of the transferor company
stands transferred to and vested in the company with effect from 1
April 2011. The transferor company was engaged in the business of
manufacture of pharmaceutical products. The amalgamation is expected to
channelize synergies and lead to better utilization of available
resources and result in greater economies of scale.
The accounting treatment has been given as per the scheme as sanctioned
by the Honorable High court of judicature of Karnataka and accordingly
the assets, liabilities and reserves of Basav Chem Limited., as at 1
April 2011 have been accounted under the pooling of interest method.
The company's investment in the equity share capital of Basav Chem
Limited, aggregating to Rs.500,000/- stands cancelled on
amalgamation and the excess of net assets of transferor company over
the cost of investment amounting to Rs. 500,000 has been adjusted to
reserves as per the order of Karnataka High Court.
As a result of above, figures in respect of current financial year are
not comparable with those of previous financial year.
15. Disclosure as required under Accounting Standard 14 - Accounting
for Amalgamation:
- Name of the Amalgamating company: Basav Chem Limited
- Nature of its business: Manufacture of pharmaceutical products
- Effective date of amalgamation for accounting purposes: 01 April 2011
- Method of accounting used to reflect amalgamation: The pooling of
interest method
- Particulars of scheme sanctioned: Scheme sanctioned by the Honorable
High Court of Karnataka, Bangalore through order dated 26 August 2011.
- Description and number of shares issued, together with the percentage
of company's equity shares exchanged to effect the amalgamation : Not
applicable
- The amount of any difference between the consideration and the value
of net identifiable assets acquired and treatment thereof: Not
applicable
16. Till the year ended 31 March 2011, the company was using
pre-revised schedule VI to the companies Act 1956, for preparation and
presentation of its financial statements. During the year ended 31
March 2012, the revised schedule VI notified under the companies
Act,1956, has become applicable to the company. The company has
reclassified previous year figures to conform to this year's
classification.
Mar 31, 2010
1) National Savings Certificates have been deposited with Commercial
Tax Department.
2) EXPORT BENEFITS:
The Company has accounted an amount of Rs 13,832,643/- (P.Y.Rs
6,563,942/-) being the net amount of credit under the DEPB and other
schemes as announced by the Import Export Policy. The same will be
utilized for off-setting the customs duty on future imports. The
accumulated amount outstanding on this account as on 31.03.2010 is Rs
11,415,647/- (P.Y. Rs 9,131,052/-) and the same is reflected under loans
and advances.
3) MARKET DEVELOPMENT EXPENSES:
Expenditure incurred on Market development amounting to Rs 228,984/-
(P.Y.Rs 228,984/-) has been written off during the year. Balance on this
account as on 31.03.2009 is Rs 9, 15,967/- (P.Y.Rs 1,144,951/-).
4) RESEARCH & DEVELOPMENT REVENUE EXPENSES:
An amount of Rs 8,530,889/- (P.Y. Rs 8,733,504/-) has been incurred
during the year on research and development of new products and
processes in the R & D Centre. The same is proposed to be amortized
over a period of 10 years commencing from the year of commercial
production. Amount written off during the year on account of the above
was Rs 5,045,057/- (P.Y. Rs 5,428,106/-). The balance on this account as
on 31.03.2010 is Rs 51,404,671/- (P.Y. Rs 47,918,839/-).
5) During the year an amount of Rs NIL (P.Y. Rs 25,133,403/-) being
interest on term loans for acquisition of qualifying capital assets was
capitalised.
6) The Company has provided for Rs 7, 15,595 /- (P.Y. Rs. 5, 99, 217/-)
being Excise Duty on Finished Goods lying at various manufacturing
units as at 31.03.2010.
7) CONTINGENT LIABILITIES NOT PROVIDED FOR ( in Rupees)
a) Guarantees issued by Companys bankers Rs. 6,810,977/- (P.Y. Rs.
20,936,720/-)
b) Letter of credit Rs. 54,582,725/- (P.Y. Rs 71,135,406/- ).
c) Estimated value of contracts remaining to be executed on capital
account and not provided for Rs. NIL /- (P.Y. Rs. 1,434,335/-).
8) Gratuity Plan:
The following table set out the status of the plan as required under AS
15(revised):
9) SECURITY FOR LOANS IN SCHEDULE (3) TO BALANCE SHEET:
9.1 Hire purchase finance provided by various financial institutions
is secured by a charge on the assets financed by the respective
institutions.
9.2 The Working Capital Loan financed by Canara Bank, ICICI Bank,
Punjab National Bank, and EXIM Bank under a Consortium arrangement with
pari passu charge is secured against hypothecation of stock and book
debts and first charge on fixed assets other than those financed by the
term lending institutions.
9.3 Loan obtained from State Bank of Indore is secured by
hypothecation of assets of Unit II and Unit III, and Unit IV funded by
them.
9.4 Secured loans obtained from EXIM Bank of Rs .21.55 Crores towards
establishment of Formulation Plant at Uttaranchal first pari pause
charge on the entire immovable and Hypothecation of whole of moveable
fixed assets, both present and future of the Company including.
(a) Movable plant and machinery, Equipment, Appliances, furniture,
vehicles, machinery spares and stores, tools and accessories, whether
or not installed and
(b) Related movables in the course of transit or delivery whether now
belonging or which may hereafter belong to the Company or which may be
held by any person at any place within or outside India to the order or
disposition of the company and all document or title including bills of
lading, shipping documents, policies of insurance and other instruments
and documents relating to such movables together with benefits of all
rights thereto.
9.5 All the Secured Loans have been guaranteed by two Directors
including Managing Director in their personal Capacity.
10) Balances of Sundry debtors, sundry creditors, loans and advances,
receivables and payables are subject to confirmation/reconciliation, if
any.
11) In the opinion of the Board of directors adequate provision has
been made in the accounts for all known liabilities and the current
assets, loans and advances have a value on realization in the ordinary
course of business at least equal to the value stated in the balance
sheet.
12) The Companys significant leasing arrangements are in respect of
operating leases for premises (office, stores, godowns, residential,
guest houses, etc.) Theses are cancelable operating leases and these
lease agreements are normally renewed on expiry. The aggregate lease
rentals payable are charged as rent under Schedule 17.
13) EMPLOYEE STOCK OPTION SCHEME
Bal Pharma Limiteds Employee Stock Option Scheme à 2006 (ESOP 2006) :
The Company instituted the 2006 Plan for all eligible employees in
pursuance of the special resolution approved by the shareholders in the
Annual General Meeting held on 23-09-2004. The Scheme covers all non
promoter directors and employees and its subsidiaries. Under the
scheme, the compensation Committee of the Board (the Committee) shall
administer the Scheme and grant stock options to eligible directors and
employees of the Company and its subsidiaries. The Committee shall
determine the employees eligible for receiving the options, the number
of options, the number of options to be granted, the exercise price,
the vesting period and the exercise period. The vesting period is
determined for the options issued on the date of the grant.
The market value of a share on each grant date is defined as the
average of the two weeks high and low price of the share preceding the
date of grant of option on the stock exchange where there is highest
trade volume during that period.
In case of termination of employment, all non-vested options would
stand cancelled. Options that have vested but have not been exercised
can be exercised within the time prescribed under each option agreement
by the Committee, failing which they would stand cancelled.
The company under ESOP-2006 had granted 2, 19,500 options to eligible
employees. The vesting period for the options granted varies from 12 to
60 months.
14) During the year, Novosynth Research labs Private Limited, a 100%
subsidiary of Bal Pharma Limited applied for striking off its name from
the register as defunct company under section 560 of the Companies Act,
1956. Pursuant to the above, the company has provided for diminution in
the value of its investment in the said subsidiary
15) RELATED PARTY DISCLOSURES:
A. The related parties where control exists are the subsidiaries.
There are no other parties over which the Company has control.
B. Related parties where control / significant influence exist or with
whom transactions have taken place during the year:
i) Subsidiaries: Basav Chem Limited
Novosynth Research Labs Private Ltd
ii) Enterprises where principal / promoter shareholders have control or
significant influence (Significant interest entities) : Micro Labs Ltd
à Enterprise owned by some of the promoter shareholders
iii) Others:- (a) Desa Marketing International - Enterprise owned by
the Managing Director
of the Company.
(b) Siroya Developers (P) Ltd. - Enterprise owned by r
elatives of
Managing Director of
the Company.
(c) Siroya Constructions - Enterprise over which
the Managing Director
of the Company exercis
es joint control with
other Partners.
C. Key managerial Personnel represented on the board:
Shailesh D.Siroya - Managing Director
Dr.S.Prasanna - Whole time Director
16) Particulars of Managerial Remuneration:
17) Computation of net profit in accordance with Section 349 of the
Companies Act, 1956 :
The remuneration paid to Mr. Shailesh D Siroya, Managing Director and
Dr. S. Prasanna, Wholetime Director, is in accordance with the
stipulations under Schedule XIII, Part II, Section II(B) of the
Companies Act, 1956, and in terms of the shareholders approval by way
of special resolution in the 17th Annual General Meeting held on 23rd
September 2004, and 19th Annual General Meeting held on 20th September,
2006, and 21st Annual General meeting held on 23rd September 2008 and
22nd Annual General Meeting held on 25th September 2009.
18) QUANTITATIVE INFORMATION
19) (a) The claim for differential excise duty of Rs. 1,034,757 on
Physi-cian Samples demanded by the Central Excise Dept in the year
1999- 2000 was decided in Companys favor by CESTAT in the year 2006-2007.
However, the Commissioner of Central Excise, Bangalore filed a civil
appeal in the Supreme Court of India against the said order of CESTAT,
which is still pending.
(b) The claim for differential excise duty of Rs.8.98 lakhs on
physicians sales for the period September 1997 to February 1998
demanded by Central Excise Dept in respect of Unit I was contested and
CESTAT, Bangalore upheld our appeal. However, Commissioner of Central
Excise, Bangalore filed a civil appeal in the Supreme court of India
against the said order of CESTAT, which is still pending.
(c) The claim of duty and penalty of Rs.868,598 for the period May 2000
to November 2001 by Central Excise in respect of Unit III is being
contested and under the directions of CESTAT , Mumbai a pre-deposit of
Rs.30,000/- has been made. The same is still pending decision.
(d) A Sales Tax claim of Rs.749,720/- on treating stock transfer as
sales in Ernakulam by the Commercial Taxes, Special Circle 1, KGST is
being contested and a deposit of Rs.253,729 has been made. The
application is being heard by the Deputy Commissioner, Ernakulam and is
still pending decision.
(e) During the year, the Income Tax Officer (TDS) raised a demand of
Rs.89, 50, 429 towards non deduction of TDS under the provisions of
Income Tax Act, 1961 for the assessment years 2004-05 to 2008-09 on all
principal to principal purchase transactions entered into by it during
the said assessment years. The company filed an appeal before the
commissioner of income Tax Appeals-V- HMT Bhavan Bangalore against the
said order and as per the directions of the commissioner, the company
deposited 25% of the demand amounting to Rs.22, 37,610/-. The said
appeal is still pending. The management is however, confident of
favorable appeal order.
(f) The Company is also involved in other lawsuits, claims,
investigations and proceedings including patent and commercial matters,
which arise in the ordinary course of business, however, there are no
such matters pending that the company expects to be material in
relation to its business
20) The company, though has initiated the process, but is yet to obtain
confirmation from suppliers who have registered themselves under the
Micro Small Medium Enterprise Development Act, 2006 (MSMED Act, 2006).
Based on the information available with the company, the balance due to
Micro & Small Enterprises as defined under the MSMED Act, 2006 is
Rs.NIL. Further, no interest during the year has been paid or payable
under the terms of the MSMED Act, 2006.
21) Unclaimed Dividends on Equity Shares:
22) Calculation of EPS (Basic and Diluted)
23) During the financial year 2007-2008, the company entered into a
share purchase agreement with the promoters and shareholders of Basav
Chem Limited to acquire 100% control through purchase of existing
Equity shares held by them. In accordance with the agreement, the
company purchased 100,000 equity shares of Rs 10/- each @ Rs. 5/-per
share and paid the amount directly to the erstwhile shareholders. Also,
the Company cleared Basav Chem Ltds secured and unsecured loans.
Further, during the year, the Company has already filed for
amalgamation of Basav Chem limited with itself. An amount of Rs.
6,460,000/- (P.Y. 6,461,537) paid by the company towards discharge of
Basav Chem Limiteds liabilities is disclosed as advance to subsidiary.
24) The Company is primarily engaged in a single business segment of
manufacturing and marketing of Pharmaceutical Formulations and Active
Pharmaceutical Ingredients and is managed as ONE entity, for its
various activities and is governed by a similar set of risks and
returns.
Geographical segments
In the view of the management, the Indian and Export Markets represent
geographical segments Sales by market:
25) Figures in brackets pertain to previous year.
26) Previous year figures have been regrouped /rearranged wherever
necessary.
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