Glenmark Pharma

1 The Ministry of Corporate Affairs, through its notification dated
 March 31, 2009, has relaxed the provisions of Accounting Standard (AS)
 11 The Effects of Changes in Foreign Exchange Rates for treating the
 exchange gain/loss arising on restatement of long-term foreign currency
 monetary items. The Company has opted to follow the changes as per the
 above notification for its foreign currency long term loans.
 Accordingly previous year exchange gain of Rs. 3,915 (000) has been
 reduced from General Reserve and current year exchange loss of Rs.
 24,541 (000) on restatement of the foreign currency loan is added to
 the cost of assets and will be depreciated over the useful life of the
 assets.  Losses arising from the effect of change in foreign exchange
 rates on foreign currency loan/bond not relating to acquisition of
 depreciable capital assets amounting to Rs. 483,643 (000) for FY
 2008-09 and gain of Rs. 91,649 (000) for the FY 2007-08, are
 transferred to Foreign Currency Monetary Item Translation Difference
 Account. Rs. 148,566 (000) has been amortised during the year. Had the
 Company not adopted these changes, the current years depreciation
 would have been lower by Rs 1,061 (000) and the profit would have been
 lower by Rs. 221,185 (000) (net of tax).
 
 2 CONTINGENT LIABILITIES NOT PROVIDED FOR
 
                                                         Rs. in (000s)
                                     31st March, 2009  31st March, 2008
 
 Bank Guarantees                               21,671            26,374
 Disputed Income Tax/Excise Duty/Sales Tax     27,285            30,182
 Claims against the Company not acknowledged 
 as debts (Refer Note a)                          380               275
 Open letters of credit                             -             8,657
 Sundry debtors factored with 
 recourse option (Refer Note b)             2,800,000         1,000,000
 Indemnity Bond                               331,876           222,427
 Corporate Guarantee (Refer Note c)         7,974,112         4,683,789
 Corporate Guarantee (Refer Note d)         1,376,460         1,078,110
 
 3 The Board of Directors and Shareholders of the Company had in terms
 of Section 192A and 293(1 )(a) of the Companies Act, 1956 approved the
 transfer of the Generic business for a total consideration of Rs.
 7,500,000 (000). The Company has entered into a Business Transfer
 Agreement with Glenmark Generics Limited (GGL) (Subsidiary) for
 transfer of the said business for a consideration of Rs. 7,500,000
 (000), effective 1st April, 2008. On account of this, loss of Rs.
 2,980 (000) is recognised in the Profit and Loss Account of the
 Company during the current year.
 
 4 EARNINGS PER SHARE
 
 Basic earnings per share is calculated by dividing the net profit for
 the year attributable to equity shareholders by the weighted average
 number of equity shares outstanding during the year.
 
 For the purpose of calculating diluted earnings per share, the weighted
 average number of shares outstanding are adjusted for the effects of
 all dilutive potential equity shares from the exercise of options on
 unissued share capital and on conversion of FCC Bonds.
 
 5 RELATED PARTY DISCLOSURES
 
 In accordance with the requirements of Accounting Standard - 18
 Related Party Disclosures, the names of the related parties where
 control exists and/or with whom transactions have taken place during
 the year and description of relationships, as identified and certified
 by the management are as follows:
 
 a)      Parties where direct/indirect control exists
 
 i) Subsidiary companies
 
 Glenmark Pharmaceuticals Europe Ltd., U.K.
 Glenmark Generics (Europe) Ltd., U.K. (formerly known as Glenmark
 Pharmaceuticals (Europe) Ltd.)
 Medicamenta A.S., Czech Republic
 Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic (formerly known as
 Medicamenta SK SRO)
 Glenmark Pharmaceuticals S.A., Switzerland
 Glenmark Holding S.A., Switzerland
 Glenmark Generics Holding S.A., Switzerland
 Glenmark Generics Finance S.A., Switzerland
 Glenmark Pharmaceuticals S.R.L, Romania
 Glenmark Pharmaceuticals Eood., Bulgaria
 Glenmark Distributor SP z.o.o., Poland
 Glenmark Pharmaceuticals SP z.o.o., Poland
 Glenmark Generics Inc., USA (formerly known as Glenmark Pharmaceuticals
 Inc.)
 Glenmark Therapeutics Inc., USA
 Glenmark Farmaceutica Ltda., Brazil
 Glenmark Generics SA., Argentina (formerly known as Servycal SA)
 Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico
 Glenmark Pharmaceuticals Peru SAC, Peru
 Glenmark Pharmaceuticals Colombia Ltda., Colombia
 Badatur SA., Uruguay
 Glenmark Pharmaceuticals Venezuela, C.A., Venezuela
 Glenmark Dominicana SA., Dominican Republic
 Glenmark Pharmaceuticals Egypt S.A.E., Egypt
 Glenmark Pharmaceuticals FZE., United Arab Emirates
 Glenmark Impex L.L.C., Russia
 Glenmark Philippines Inc., Philippines
 Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria
 Glenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia
 Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia
 Glenmark South Africa (Pty) Ltd., South Africa (formerly known as
 Glenmark Pharmaceuticals Pty. Ltd.)
 Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa
 (formerly known as Bouwer Bartlett Pty. Ltd.)
 Glenmark Exports Ltd., India
 Glenmark Generics Ltd., India
 
 ii) Investment in Joint Venture
 
 Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand
 
 b) Related party relationships where transactions have taken place
 during the year Subsidiary Companies
 
 Glenmark Exports Ltd., India
 Glenmark Farmaceutica Ltda., Brazil
 Glenmark Philippines Inc., Philippines
 Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria
 Glenmark Pharmaceuticals S.A., Switzerland
 Glenmark Pharmaceuticals Malaysia Sdn.Bhd..Malaysia
 Glenmark Pharmaceuticals (Australia) Pty. Ltd., Australia
 Glenmark Impex L.L.C., Russia
 Glenmark Holding S.A., Switzerland
 Glenmark Generics Ltd., India
 
 c)       Key management personnel
 
 Mr. Gracias Saldanha
 Mrs. B.E. Saldanha
 Mr. Glenn Saldanha
 Mrs. Cheryl Pinto
 Mr. R.V. Desai
 Mr. A.S. Mohanty
 
 6 LEASES
 
 The Company has taken on lease/leave and licence godowns/residential &
 office premises at various locations in the country.
 
 i) The Companys significant leasing arrangements are in respect of the
 above godowns & premises (including furniture and fittings therein, as
 applicable). The aggregate lease rentals payable are charged to Profit
 and Loss Account as Rent in Schedule 18.
 
 ii) The Leasing arrangements which are cancellable range between 11
 months and 5 years. They are usually renewable by mutual consent on
 mutually agreeable terms. Under these arrangements, generally
 refundable interest free deposits have been given. An amount of Rs.
 78,559 (000) towards deposit and unadjusted advance rent is
 recoverable from the lessor.
 
 7 Taxation
 
 Provision for current taxation for the Company of Rs. 272,000 (000)
 represents Minimum Alternate Tax pursuant to the provisions of Section
 115JB of the Income Tax Act, 1961 of India.
 
 The Finance Act, 2005 inserted sub-section (1 A) to section 115JAA to
 grant tax credit in respect of MAT paid under Section 115JB of the Act
 with effect from Assessment Year 2006-07 and carry forward the credit
 for a period of 7 years. In accordance with the Guidance Note issued on
 Accounting For Credit Available in Respect of Minimum Alternative Tax
 (MAT) under the Income Tax Act 1961 by the Institute of the Chartered
 Accountants of India, the Company has recognised MAT Credit which is
 expected to be set-off against the tax liability, other than MAT in
 future years. Accordingly, an amount of Rs. 2,509(000) for the current
 year is included as MAT Credit Entitlement in Schedule 12 - Loans and
 Advances.
 
 8 Foreign Currency Convertible Bond issued
 
 A) The Company had issued 30,000 Zero Coupon Foreign Currency
 Convertible Bonds of USD 1,000 each (Rs. 1,331,700 at issue)
 
 (i) Convertible at the option of the bondholder at any time on or after
 11th November, 2007 but prior to the close of business on 29th
 November, 2010 at a fixed exchange rate of Rs. 44.94 per 1 USD and the
 conversion price of Rs. 582.60 per share of Re. 1 each.
 
 (ii) Redeemable in whole but not in part at the option of the Company
 on or after 10th January, 2010 if closing price of the share for each
 of the 25 consecutive trading days immediately prior to the date upon
 which notice of such redemption is given was atleast 130% of the
 applicable Early Redemption Amount divided by the Conversion Ratio.
 
 (iii) Redeemable on maturity date on 11th January, 2011 at 139.729% of
 its principal amount if not redeemed or converted earlier. The
 redemption premium of 39.729% payable on maturity of the bond if there
 is no conversion of the bond to be debited to Securities Premium
 Account evenly over the period of 5 years from the date of issue of
 bonds. As of 31st March, 2009, 30,000 FCC bonds (2008-30,000) of USD
 1,000 each aggregating to USD 30 million are outstanding.
 
 B) The Company had issued 20,000 Zero Coupon Foreign Currency
 Convertible Bonds of USD 1,000 each (Rs. 873,200 at issue)
 
 (i) Convertible at the option of the bondholder at any time on or after
 28th March, 2005 but prior to the close of business on 2nd January,
 2010 at a fixed exchange rate of Rs. 43.66 per 1 USD and price of
 Rs.215.60 (Post adjustment for bonus and split) per share of Re. 1
 each.
 
 (ii) Redeemable in whole but not in part at the option of the Company
 on or after 15th February, 2008 if closing price of the share for each
 of the 25 consecutive trading days immediately prior to the date upon
 which notice of such redemption is given was atleast 130% of the
 applicable Early Redemption Amount divided by the Conversion Ratio.
 
 (iii) Redeemable on maturity date on 16th February, 2010 at 133.74% of
 its principal amount if not redeemed or converted earlier. The
 redemption premium of 33.74% payable on maturity of the Bond if there
 is no conversion of the Bond to be debited to Securities Premium
 Account evenly over the period of 5 years from the date of issue of
 Bonds. As of 31st March, 2009, 1,000 FCC Bonds (2008-1,000) of USD 1000
 each aggregating to USD 1 million are outstanding.
 
 C) The Company had issued 50,000 Zero Coupon Foreign Currency
 Convertible Bonds of USD 1,000 each (Rs. 2,183,000 at issue)
 
 (i) Convertible at the option of the bondholder at any time on or after
 15th November, 2006 but prior to the close of business on 2nd January,
 2010 at a fixed exchange rate of Rs. 43.66 per 1 USD and the price of
 Rs. 253.11 (post adjustment for split) per share of Re. 1 each.
 
 (ii) Redeemable in whole but not in part at the option of the Company
 on or after 15th February, 2009 if closing price of the share for each
 of the 25 consecutive trading days immediately prior to the date upon
 which notice of such redemption is given was atleast 130% of the
 applicable Early Redemption Amount divided by the Conversion Ratio.
 
 (iii) Redeemable on maturity date on 16th February, 2010 at 134.07% of
 its principal amount if not redeemed or converted earlier. The
 Redemption Premium of 34.07% payable on maturity of the Bond if there
 is no conversion of the Bond to be debited to Securities Premium
 Account evenly over the period of 5 years from the date of issue of
 Bonds. During the year, 7,500 FCC Bonds of USD 1,000 each aggregating
 to USD 7.5 million were converted into 1,293,706 equity shares of Re. 1
 each. As of 31st March, 2009, 5,000 FCC Bonds (2008-12,500) of USD
 1,000 each aggregating to USD 5 million are outstanding.
 
 9 PRIOR YEAR COMPARATIVES
 
 Prior years figures have been regrouped or reclassified wherever
 necessary to confirm to current years classification.