1. Contingent liabilities
(a) Claims against the company not acknowledged as debt
(Amount in Rs.)
Particulars As at As at
31 March 2012 31 March 2011
Excise and service tax matters 2,665,077 2,665,077
(b) Guarantees (Amount in Rs.)
Particulars As at As at
31 March 2012 31 March 2011
In respect of bank guarantees 18,341,417 14,152,892
The Company had received a notice from Bruhat Bangalore Mahanagara
Palike (BBMP) on 23 February 2011 demanding a payment of Rs. 113,328,767
as Land Improvement Charges towards its factory land. The Company fled
a writ petition on 28 May 2011 before the High Court of Karnataka
challenging the levy of the improvement charges and obtained an interim
stay order on 2 June 2011 against cancellation by BBMP of the Khata of
the factory land, if the improvement charges were not paid.
On 20 October 2011, the Company has received a notice from BBMP to stop
the construction of the tablet production facility pending the
construction license from BBMP. The Company''s writ petition fled in the
High Court of Karnataka challenging the notice and the High Court
allowed the construction by granting a stay. Subsequent to the year
end, on 20 April 2012, the high court has passed an order quashing the
levy of differential improvement charges on different dimension of
property. The Company is awaiting for a certified copy of the order.
2. As a measure of extra and abundant caution, the Company undertook
a voluntary recall of steril products manufactured at its plant
amounting to Rs. 26,826,401, following AstraZeneca''s Global quality audit
As a precautionary measure, the Company also voluntarily suspended
production temporarily to review manufacturing practices at the plant
resulting in a temporary interruption of supplies. Sales for the year
ended 31 March 2012 is net of the returns received on account of the
3. Research expenditure (including depreciation) amounting to Rs.
14,412,244 (previous period: Rs. 32,177,960 incurred during the year has
been charged to the respective heads of account in the statement of
proft and loss.
4. During the year, a First Information Report (FIR) was fled by the
Central Bureau of Investigation agains the Company on 23 February 2012
wherein it is alleged that the Company submitted a false affdavit wit
respect to rates quoted by the Company to the institution (Directorate
of Health Services, Delhi). It is furthe alleged that unknown offcers
of the Directorate of Health Services, Delhi (DHS) and unknown offcials
of th Company conspired to cancel the recovery proceedings by DHS. The
Company is fully cooperating with th ongoing investigations.
(i) Names of related parties and description of relationship:
Holding company AstraZeneca Pharmaceuticals AB, Sweden
Holding company of AstraZeneca Pharmaceuticals AB, Sweden
AstraZeneca AB, Sweden
Holding company of AstraZeneca AB, Sweden AstraZeneca Treasury Limited,
Ultimate holding company AstraZeneca Plc, United Kingdom
AstraZeneca SDN Bhd, Malaysia;
AstraZeneca Singapore Pte Ltd, Singapore;
AstraZeneca India Private Limited;
PT AstraZeneca Indonesia;
AstraZeneca Pty Ltd, Australia;
AstraZeneca Pharmaceuticals LP USA;
AstraZeneca Thailand; and
PR Pharmaceuticals Inc
Key management personnel
- Managing Director Anandh Balasundaram
- Directors Ian Brimicombe
Bhasker V Iyer (resigned w.e.f 23 February 2010) Mr. Luigi Felice
Lacorte (appointed w.e.f 25 March 2010) Francis McNamara III (resigned
w.e.f 30 September 2010) Ruby Lau (appointed w.e.f 10 November 2011)
6. Segment reporting
The primary segments of the Company are its business segments as
(i) Healthcare - The Company engages in the manufacture, trading and
sale of pharmaceutical products.
(ii) Clinical trial services - The Company renders clinical trial
services on pharmaceuticals products to its group companies.
(iii) Co-promotional services – The Company renders co-promotion
services for pharmaceuticals products to its customers.
The accounting policies consistently used in the preparation of the
financial statements are also applied to record revenue and expenditure
in individual segments.
Revenue and direct expenses in relation to segments are categorised
based on items that are individually identifable to that segment, while
other costs, wherever allocable, are apportioned to the segments on an
appropriate basis. Certain income and expenses are not specifcally
allocable to individual segments as the underlying assets and services
are used interchangeably. The Company therefore believes that it is not
practicable to provide segment disclosures relating to such income and
expenses and accordingly such expenses are separately disclosed as
''unallocated'' and directly charged against total income.
Assets and liabilities in relation to segments are categorised based on
items that are individually identifable to that segment. Certain assets
and liabilities are not specifcally allocable to individual segments as
these are used interchangeably. The Company therefore believes that it
is not practicable to provide segment disclosures relating to such
assets and liabilities and accordingly these are separately disclosed
as ''unallocated''. Assets are primarily located in India.
Clinical trial services and co-promotion services do not qualify as
separate segments as defned in AS – 17 – ''Segment Reporting'' and hence
have been disclosed as others.
The Company is obligated under non-cancellable operating leases for
residential and offce premises. Total rental expense under
non-cancellable operating leases amounted to Rs. 6,010,958 (previous
period: Rs. 1,809,856 ) for the year ended 31 March 2012.
The Company is also obligated under cancellable lease for residential
and offce premises, which are renewable at the option of lessor and
lessee. Total rental expense under cancellable operating lease entered
amounted to Rs. 38,276,322 (previous period: Rs. 38,715,700 ) for the year
ended 31 March 2012.
Further the Company is obligated under operating lease agreements for
vehicles. Total lease rental expense under the said agreement amounted
to Rs. 1,857,704 (previous period: Rs. 2,096,998) for the year ended 31
8. Dues to micro and small enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an offce
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 fling
of the Memorandum in accordance with the ''Micro, Small and Medium
Enterprises Development Act, 2006 (''the Act''). Accordingly, the
disclosure in respect of the amounts payable to such enterprises as at
31 March 2012 has been made in the financial statements based on
information received and available with the Company. Further in view of
the Management, the impact of interest, if any, that may be payable in
accordance with the provisions of the Act is not expected to be
material. The Company has not received any claim for interest from any
supplier as at the balance sheet date.
9. Gratuity plan
The Company has the following defned Gratuity plan.
Leaving service benefit:
Eligibility for benefit: Every employee who has completed 3 years or
more of service would be eligible for gratuity benefit as per the terms
of the Trust Deed.
For Non-Management staff:
15 days salary for each year of service, subject to maximum limit
specifed as per the Gratuity Act, 1972 .
Normal retirement benefit, death and disability benefit: For Management
One month''s salary last drawn by member for each year of service,
10. Provident fund
The Company contributed Rs. 29,086,637 towards provident fund during the
year ended 31 March 2012
The guidance on implementing AS 15, Employee benefits (revised 2005)
issued by Accounting Standard Boards that benefits involving employer
established provident funds, which require interest shortfalls to be
recompensed are to be considered as defned benefits plans. The Actuarial
Society of India has issued the fnal guidance for measurement of
provident fund liabilities for the year ended 31 March 2012. The
actuary has accordingly provided a valuation and based on the below
provided assumptions there is no shortfall as at 31 March 2012.
11. Management believes that the Company has established a
comprehensive system of maintenance of information and documents as
required by the transfer pricing legislation under sections 92-92F of
the Income Tax Act, 1961. Management is of the opinion that its
international transactions are at arm''s length so that the aforesaid
legislation will not have any impact on the financial statements,
particularly on the amount of tax expenses and that of provision for
12. The Board of Directors of the Company at its meeting held on 11
May 2012, approved the financial statements for the year ended 31 March
2012. The Board of Directors, at the said meeting, also recommended a
fnal dividend of Rs. 3.50 on equity share of Rs. 2 each for the year ended
31 March 2012. The payment of the said dividend is subject to the
approval of the shareholders at the Annual General Meeting.
13 A foreign national was appointed as Whole time Director of the
Company during the year. The Company has fled an application with the
Central Government under the Companies Act, 1956 seeking approval for
the appointment of, and remuneration payable to, the said Director. The
application is pending before the Central Government.
14 The comparatives in the financial statements for the period ended
31 March 2011 are for the period from 1 January 2010 to 31 March 2011
i.e. 15 months period. Since the current year numbers are for a year
i.e. twelve months period, the previous period fgures may not be
strictly comparable to the current year fgures.
15 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 notifed under the Companies Act 1956, has
become applicable to the Company. The Company has reclassifed previous
period fgures to conform to this year''s classifcation. The adoption of
revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However, it
significantly impacts presentation and disclosures made in the financial
statements, particularly presentation of balance sheet.