Cadila Healthcare
BSE: 532321 | NSE: CADILAHC | ISIN: INE010B01019 | Pharmaceuticals
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Notes to Accounts | Year End : Mar '09 |
1 A During the year, the comoany implemented a Composite Scheme of Arrangement [ the scheme ] with Carnation Nutra-Analogue Foods Limited [ CARNATON ] [ New name changed to Zydus Wellness Limited J, a subsidiary Company and Zydus Hosoitals & Medical Research Private Limited 1 ZHMRPL ] which was approved by the order of the Honable Gupnt High Court, dated October 23,2008. B The Scheme envisaged Demerger of Consumer Products Division [ CPD ] of the Company into CARNATION, Amalgamation of ZHMRPL with the Company and Utilisation of Securities Premium Account of the Company in the prescribed manner besides the accounting treatment of the Scheme. C Both the demerger and amalgamation have been accounted under the Amalgamation in the nature of merger in terms of Accounting Standard [ AS-14 ] on Accounting for Amalgamation. 2 Demerger of Consumer Products Division [ CPD ] of the Company into CARNATION: The appointed date of the demerger [ Demerger Appointed Date ] under the Scheme was April 1,2008, while the effective date was November 30, 2008. CARNATION is engaged in the business of manufacturing & marketing of consumer products. I CPD includes all the business undertakings, properties & supplies of whatsoever nature & goods pertaining to CPD, which deals in consumer health products. AH the assets & liabilities of CPD have been transferred at the value appearing in the books of the comoany as on the Demerger Appointed Date, on a going concern basis. In consderation, CARNATION allotted 33,496,989 equity shares of Rs. 10/- each, fully paid to the shareholders of the Company [ in the ratio of four Equity Shares of Rs. 10/- each fully paid of CARNATION for every fifteen equity shares of Rs. 5/- each fully paid uo of the Company held by them ]. The excess of book value of assets over liabilities of CPD transferred to CARNATION amounting to Rs. 47 Millions has been debited to the securities premium account in the Company. Such reduction has been effected as an Integral part of the scheme and the same does not involve either diminution of the liability in respect of unpaid share capital or payment to shareholders of any paid up share capital. E Amalgamation of ZHMRPL with the Comtwuy: The appointed date of the amagamaton [ Amalgamation Appointed Date ] under the Scheme was July 1, 2008, while the effective date was February 4,2009. ZHMRPL as incorporated to establish hospitals and medical research facilities, but no activities had begun. All the assets & liabilities of ZHMRPL have been transferred to the company at value appearing in the books of ZHMRPL as on the Amalgamation Appointed Date on going concern basis, except that the 90 millions Equity Shares of the Company held by ZHMRPL stand cancelled. In consideration, the Company allotted 100,885,305 Equity Shares of Rs. 5/- each of the Company as fully paid to the shareholders of ZHMRPL The Scheme provided for the right of ZHMRPL to declare and pay dividends to its share holders for the accounting period after the Amalgamation Apoointed Date, hut nrior to the Amalgamation Effective Date. Accordingly ZHMRPL had decared an interim dividend of Rs. 363 Millions to its share holders out of the final dividend of Rs. 405 Millions for the year 2007-08 declared and paid by the Company, which ZHMRPL received in July, 2008 and therefore not considered in the basis for arriving at share exchange ratio under the Scheme. The difference amount of dividend received and interim dividend paid by ZHMRPL of Rs. 42 Millions has been transferred to Profit 8i Loss Account by the Company, as a part of accounting of the transactions of the Scheme. The excess of face value of shares issued as aforesaid over the book value of assets less liabilities of ZHMRPL transferred to the Company under the Scheme amounting to Rs. 122 Mitlions in aggregate has been debited to the capital reserve account Rs. 6 Millions, Capital Redemption Reserve Account Rs. 32 Millions and Securities Premium Account Rs. 84 Millions by the Company. - Reorganization of Reserves of the Company; From the effective date, Rs..2000. Millions stand cedited to International Business Development Reserve Account [ IDBR ] from the balance of securities premium account. IDBR would he available towards certan Exoenses incurred by the Company, to the extent of available balance in ID3R. Expenses for this purpose will include professional, legal, financial fees or any other commission payable during acquisition process carried out directly or through its subsidiary, interest expenses, loss arising on foreign exchange fluctuations relating to debt borrowed and interest paid on acquisition, research & development expenses incurred for and in connection with getting product registration abroad, goodwill arising on merger - restructuring. The Expenses would typically include expenses which cannot be capitalised. An identical accounting treatment should be followed even for the purpose of consolidated accounts. Trasfering this amount to IDBR and its subsequent utilisation at an approximate time amount to reduction of Securities Premium Account. Such reduction has been affected as and integral part of the Scheme and same does not involve either diminution of liability in respect of unpaid share capital or Payment to shareholders of any paid up share capital. in viow of the aforesaid Scheme, the figures of the current year are not fully comparable with those of the previous years. 3 The Company has opted for accounting the exchange rate oifferences arising on the Long Term Foreign Currency Monetary Items [ LTFCMI ] in accordance with the notification dated March 31, 2009 under the Companies [ Accounting Standards ] Amendment Rules, 2009 on Accounting Standard 11 relating to the effects of changes in foreign exchange rates . A Accordingly, retrospectively from the accounting year 2007-08, the effects of exchange rate differences arising from long term foreign currency loans availed for funding acquisition of fixed assets has been adjusted to the cost of respective items of fixed assets. While, in other cases such exchange rate difference on the LTFCMI is transferred to * foreign currency monetary items translation difference account. [FCMITDA ] which is amortised during the tenure of the respective LTFCMI but not beyond March 31,2011. B In view of above change in policy, net profit, of the company for the year is lower by Rs. 79 Millions [ net of tax]. 4 The Company has taken various residential / office premises / godowns under operating lease or leave and licence agreement. The lease terms in respect of such premises is on the basis of individual agreement entered into with the respective landlords. The Company has given refundable interest free security deposit in accordance with the agreed terms. The lease payments are recognised in the profit and loss account under Rent in schedule 16. 5 The Company has invested Rs. 50 Millions and given loans & advances of Rs. 122 [ As at 31-03-08 : Rs. 93 ] Millions to Dialforhealth India Ltd. [DIL], a wholly owned subsidiary of the Company. The accumulated losses as at 31st March, 2009 amounting to Rs. 102 [ As at 31-03-08: Rs. 92 ] Millions has exceeded the net worth of DIL However having regard to the long term strategic investment, the diminution in the value of investments in DIL is considered to be temporary and loans and advances are considered good and accordingly no provision has been made. 6 In the year 2007-08, the company had purchased 90,750 equity shares of Rs. 100 each of Liva Healthcare Ltd. at a negotiated consideration as per the Share Purchase Agreement [ SPA ] entered with the sellers. During the year, the company has reached settlement with the seller in respect of various claims raised by the Company under SPA and accordingly the final consideration has been reduced by Rs. 35 Millions. The said amount has been reduced from the investment value of the shares of LIVA. 7 The basis of ascertaining the cost of closing stock has been changed from FIFO method to Moving Average method from the current year due to implementation of SAP software. It is not possible to ascertain the effect in the value of the closing stock and on profit due to this change. 8 The Scheme of amalgamation between Zydus BSV Pharma Pvt. Ltd. and Zydus BSV Research and Development Pvt. Ltd., both being joint venture companies of Cadila Healthcare Limited, was sanctioned by Honable Gujarat High Court, on March 31, 2008. Pursuant to the Scheme, the entire business and all assets and liabilities of Zydus BSV Research and Development Pvt. Ltd. get transferred and vested in Zydus BSV Pharma Pvt. Ltd. and the Company had received 24,75,000 equity shares of Rs. 10 each fully paid up of Zydus BSV Pharma Pvt. Ltd. against 9,90,000 equity shares of Rs. 10 each fully paid up of Zydus BSV Research and Development Pvt. Ltd. as per the share exchange ratio approved by the members. 8 A Provision for product warranty claims in respect of the products sold during the year is made on the basis of managements estimation of probable customer claims in respect thereof considering the estimated stock lying with retailers. The Company does not expect any reimbursement of such claims in future. |
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| Source : Religare Technova | |
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