1. Nature of Operations
Fern Care Pharma Limited (Fern or the Company) is engaged in the
business of Cosmetics along with Pharmaceutical and Specialty
2 Segment Information
I. Business Segments
The Company has considered Business Segments as the primary segment for
disclosure. The Company operates in four Business Segments.
a) Consumer Products: Consumer Products include fairness bleaches, hair
removing creams, liquid soaps and other cosmetic products.
b) Pharma Division: Pharma includes innovative and aesthetically
designed dermatological range of products, cosmeceuticals and health
c) Speciality Chemical Division: Speciality chemicals comprise of
import-substitute drugs and drug intermediates. (Discontinuing
Operation - Refer Note 8 in Schedule 21)
d) Others comprise of the third party processing and export oriented
unit. The above segments have been identified considering:
a) the nature of products and services;
b) the differing risks and returns;
c) the organization structure; and
d) the internal financial reporting systems.
II. Geographical Segments
Secondary segmental reporting is based on the geographical location of
customers. The geographical segments have been disclosed based on
revenues within India (sales to customers in India ) and revenues
outside India ( sales to customer located outside India.)
3 Related Parties
Related party disclosures:
a) Name of related parties where control exists irrespective of whether
transactions have occurred or not
Subsidiary Company Jaquline Inc
b) Name of other related parties with whom transactions have taken
place during the year.
Key Management Personnel
Managing Director (CMD)
Joint Managing Director (JMD)
CEO - Works
CEO - Chemical
CEO - Pharmaceuticals
CEO - IT
CEO - Marketing
Mr. S. H. Pophale
Mrs. S. A. Ramnathkar
Mr. Madan Vaishnawa (From 01/09/2007)
Mr. S H Bhat (Up to 31/08/2007)
Mr. H. V. Kolte
Mr. A. L. Chaudhari
Mr. D. Janardhanan
Mr. P. M. Sarma
Mr. Cageton Almeida
Enterprises owned or significantly influenced by key management
personnel or their relatives
Pentagon Manufacturing & Marketing Ltd. (Pentagon)
Ivory Soap Works Ltd. (Ivory Soap)
Mayfair Soaps Ltd. (Mayfair)
4 Impairment of assets
The impairment losses represent the write-down of certain fixed assets
to recoverable amount due to the closure of EOU operations at Nashik
Factory. The recoverable amount is the best estimate by the management.
The carrying amount of fixed assets which will be disposed off as part
of the closure has been transferred to Fixed Assets held for sale.
5 The existing promoters of the Company have entered into a Share
Purchase Agreement dated November 21,2008 with Dabur India Limited to
sell their 72.15% holding in the Company. As per the said Share
Purchase agreement, the existing promoters have agreed to undertake the
following other transactions as a condition precedent to or
simultaneous on completion of the above transactions, as approved by
a Disposal of the Speciality Chemical Division for a consideration of
Rs. 108,450,084 to Mr. Sunil H Pophale and / or his nominees.
b Sale or disposal of Flat No. 12 in the building known as Maison
Belvedere for a consideration of Rs. 30,000,000 to Mr. Sunil H
Pophale and / or his nominees. c Sale of 25% of the ordinary voting
shares held by wholly owned Subsidiary, Jaquline Inc in Fern Mitchell
Group, USA, LLC for
USD 1,000,000 to Mrs. Sunita A. Ramnathkar and / or her nominees.
No accountingi effect has been made for the above transactions, since
the aforesaid transactions are yet to be completed as on the date of
the Balance Sheet.
Further as per the Share Purchase Agreement, interest accrued on the
Escrow amounts kept with an Escrow Agent will belong to the Company.
The said interest will be recognized on completion of the aforesaid
6 Capital Commitments
Estimated amount Of contracts remaining to be executed on capital
account and not provided for
7. Derivative Instruments and Un-hedged Foreign Currency Expsoure a
Particulars of Derivatives
Outstanding as at Balance Sheet date
JPY Basis Swap with Embedded Options
The Company has entered into a structured derivative contract to hedge
its foreign currency risk associated with the repayment of External
Commercial Borrowing (ECB). In terms of the ICAI notification dated
29 March 2008, the Company has marked to market its outstanding
derivative contract as at 31 March 2009 and has accordingly recognised
a loss of Rs Nil (Previous year Rs.1,560,000) by debiting exchange
loss. Further, the Company has recognised a loss of Rs 34,626,917
(Previous year: Rs. 27,238,109) in respect of the exchange rate
translation of its ECB as at 31 March 2009.
8 Excise duty on sales amounting to Rs. 10,527,275 (Previous Year: Rs.
8,153,191) has been reduced from sales in Profit & Loss account and
excise duty on increase / decrease in stock amounting to Rs. 36,158
(Previous Year: (Rs. 289,260)) has been considered as (income) /
expense in Schedule 19 of financial statements.
9 Previous year comparatives
Previous years figures have been regrouped, where necessary to conform
to the current years classification.
The figures of previous year were audited by a firm of Chartered
accountants other than S. V. GHAT ALIA & ASSOCIATES.