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Plethico Pharmaceuticals
BSE: 532739|NSE: PLETHICO|ISIN: INE491H01018|SECTOR: Pharmaceuticals
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« Dec 12
Notes to Accounts Year End : Mar '14
1.1 The said Investor as on the date of conversion that is 13th August,
 2012 did not exercise the option for the conversion hence the initial
 amount received has been forfeited.
 
 1.2 Provision for Premium Payable made from General Reserve of Rs. NIL
 during the current period and Rs. 778.44 Million of Previous Year.
 
 1.3 Income Tax Provision provided from 2004-2005 (AY 2005-06) to
 2009-10 (AY 2010-11) of Rs. NIL for current period and Rs. 320 million made
 during previous year.
 
 1.4 The Term Loans taken from EXIM Bank, Mumbai is Secured by :
 
 (a) Exclusive first charge by way of equitable mortgage of company''s
 land and building situated at Khasra No.821/2, Village Dharawara,
 Depalpur Tehsil, Indore
 
 (b) Hypothecation of Plant and Machinery installed in the aforesaid
 factory premises situated at Khasra No. 821/2, Village Dharawara,
 Depalpur Tehsil, Indore
 
 (c) Pledge of equity shares of the company by a director of the
 company.
 
 (d) Personal Guarantee of two directors of the company.
 
 1.5 The Term Loan taken from IDBI Bank is Secured by :
 
 (a) First charge by way of equitable mortgage over company''s land and
 building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia,
 Indore
 
 (b) Hypothecation of Plant and Machinery installed in the factory
 premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia,
 Indore
 
 (c) Personal Guarantee of one of the director of the company.
 
 1.6 Vehicle Loan is Secured by hypothecation against related vehicle of
 the company.
 
 1.7 Terms of Repayment of Secured Term Loans from Banks and others are
 given below:
 
 
 1.8 The working capital loans taken from Bank of Baroda are secured by
 :
 
 (a) Hypothecation of company''s entire stocks and book debts on first
 pari passu charge basis
 
 (b) On first pari passu charge basis by :
 
 (i) Equitable mortgage of company''s land and building situated at
 Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at
 Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.  (ii)
 Hypothecation of Plant and Machinery installed in the aforesaid factory
 premises situated at Khasra No. 821/1,Village Dharavara, Tehsil
 Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya,
 Manglia, Indore
 
 (c) Personal Guarantee of two directors of the company.
 
 1.9 The working capital loans taken from IDBI Bank are secured by :
 
 (a) Hypothecation of company''s entire stocks and book debts on first
 pari passu charge basis
 
 (b) Second charge by way of equitable mortgage over company''s land and
 building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia,
 Indore
 
 (c) Hypothecation of Plant and Machinery installed in the factory
 premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia,
 Indore
 
 (d) Personal Guarantee of one of the director of the company.
 
 1.10 The working capital loan taken from State Bank of India is secured
 by :
 
 (a) Hypothecation of company''s entire stocks and book debts on first
 pari passu charge basis
 
 (b) On first pari passu charge basis by :
 
 (i) Equitable mortgage of company''s land and building situated at
 Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at
 Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.  
 
 (ii) Hypothecation of Plant and Machinery installed in the aforesaid
 factory premises situated at Khasra No. 821/1, Village Dharavara,
 Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari
 Pipliya, Manglia, Indore
 
 (c) Personal Guarantee of one of the director of the company.
 
 1.11 The working capital loan taken from Punjab National Bank is secured
 by :
 
 (a) Hypothecation of company''s entire stocks and book debts on first
 pari passu charge basis
 
 (b) On first pari passu charge basis by :
 
 (i) Equitable mortgage of company''s land and building situated at
 Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at
 Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore 
 
 (ii) Hypothecation of Plant and Machinery installed in the aforesaid
 factory premises situated at Khasra No. 821/1, Village Dharavara,
 Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari
 Pipliya, Manglia, Indore
 
 (c) Personal Guarantee of two directors of the Company.
 
 1.12 The working capital loan taken from Allahabad Bank is secured by :
 
 (a) Hypothecation of company''s entire stocks and book debts on first
 pari passu charge basis
 
 (b) On first pari passu charge basis by :
 
 (i) Equitable mortgage of company''s land and building situated at
 Khasra No.821/1, 364/1,813/2/1,823/1,823/3 Village Dharavara, Tehsil
 Depalpur, Indore and at Khasra No.285/1/2,
 1/4,1/5,285/3,286/3,286/4,285/2/1 Village Gari Pipliya, Manglia, Indore
 
 (ii) Hypothecation of Plant and Machinery installed in the aforesaid
 factory premises situated at Khasra No. 821/1, Village Dharavara,
 Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari
 Pipliya, Manglia, Indore (c) Personal Guarantee of two directors of the
 Company.
 
 1.13 Amount overdue as on 31st March, 2014 on account of Principal Rs.
 537.97 million & Interest Rs. 29.68 million the outstanding is according
 to the Debt Restructuring Scheme proposed for the Company. Refer Note
 No.  41 B.2 The company does not have significant influence in any of
 the above companies as defined under AS18 Related Party Disclosure
 and AS23 Accounting for Investment in Associates in consolidated
 financial statements and as such, all above companies are neither
 related party nor associate companies within the meaning of above
 accounting standards. Consequently consolidation of accounts has not
 been done for the above companies. Refer Note No. 36F.
 
 1.14 The company is duly applying, wherever applicable, to the
 competent authority for getting extension with respect to the overdue
 export proceeds in accordance with the provisions of the Foreign
 Exchange Management Act, 1999 and Foreign Exchange Management (Export
 of goods and services) Regulations, 2000.
 
 1.15 Trade Receivables are net of Bill discounting facilities availed
 by the Company. Bill discounting facility is availed from SICOM for
 which following is offered as securities:
 
 1) Land Bearing Survey No.285/2/2 admeasuring 51109 sq.ft. bearing
 Patwari Halka No.26,New No.24 at Village Gram Pipalya, Tehsil Sanwer,
 Indore along with R & D block i.e. Ground plus two storied building
 thereon approximately 18000 sq.ft situated in the Registration District
 and sub-District of Indore.
 
 2) Land bearing Survey Nos 823/2,823/4 & 823/6 at village Dharawara,
 Tehsil Depalpur, Indore.
 
 3) Plant & Machinery comprising of R&D equipment,etc at the R&D block
 situate on land bearing Survey No.285/2/2 admeasuring 51109 sq.ft
 bearing Patwari Halka No.26,New No.24 at Village Gram Pipalya, Tehsil
 Sanwer, District Indore.
 
 2.  Balances with non-scheduled bank
 
 There is no balance in current period (previous year Nil) with
 non-scheduled bank.
 
 3.  Balance Confirmation of Parties
 
 Debtors, Loans & Advances, Creditors and Bills Payable are subject to
 confirmation by the parties. The company has issued confirmation
 letters to such parties and differences if any shall be reconciled in
 the current Period.
 
 4.  Current Assets and Liabilities
 
 In opinion of the Board, the provisions for known liabilities are
 adequate and current assets in the ordinary course of business have a
 value at least equal to the amount at which they are stated.
 
 31.  Regrouping of Figures
 
 The figures of previous year have been regrouped / reclassified
 wherever necessary to confirm to the current period''s presentation.
 
 5.  Related Party Disclosure : As per Accounting Standard -18
 
 A.  Name of Related Parties and Description of Relationship
 
 Name Country Relationship
 
 Plazma Laboratories Pvt. Ltd.  India Significant influence of Director
 
 Plethico Laboratories Pvt. Ltd.  India Significant influence of
 Directors / Relatives
 
 Plethico Products India Significant influence of Directors / Relatives
 
 Wiscon Pharmaceuticals Pvt. Ltd India Significant influence of
 Directors / Relatives
 
 Rezcom Realty Pvt Ltd India Significant influence of Directors
 
 Passion Indulge Pvt. Ltd.  India Significant influence of Directors
 
 Plethico Global Holdings BV Netherland Wholly owned subsidiary
 
 Plethico International Ltd.  UAE Wholly owned subsidiary
 
 Plethico US Holdings KFT Hungary Wholly owned subsidiary (step-down)
 
 Natrol INC USA Wholly owned subsidiary (step-down)
 
 Natrol Global FZ-LLC UAE Wholly owned subsidiary (step-down)
 
 B.  Key Managerial Personnel
 
 Name Designation
 
 Mr. Shashikant A. Patel Chaiman Cum Managing Director
 
 Mr. Chirag S. Patel Whole Time Director and CEO
 
 Mrs. Gauravi Parikh Exceutive Director
 
 Mr. Aditya Moona VP - International Marketing & Business
 
 Mr. Anil K Mohta Chief Techincal Officer
 
 Mr. A. K. Rungta Associates VP- Operations
 
 Mr. Kamal Anand VP- CPD
 
 Mr. John Philip Roy VP - International Sales
 
 Mr. Mangesh Joshi VP - Human Resource
 
 The above parties are not treated as Related Parties due to following
 reasons:
 
 1) The Company or any of its Key Management Personnel (KMP) do not
 have any representation on the Board of Directors / Governing Board of
 any of the aforesaid enterprises
 
 2) The Company or any of its KMP do not even remotely control the
 appointment and / or constitution of the Board of Directors / Governing
 Board of any of the aforesaid enterprises
 
 3) The Company do not have any dependence information from any of the
 aforesaid enterprises
 
 4) The Company has not employed any of its representative or KMP as
 employee or KMP in any of the aforesaid enterprises
 
 5) The Company or any of its KMP or employees are not involved in the
 day to day operations or in making policy decisions of any of the
 aforesaid enterprises
 
 6) The Company has never undertaken any material transactions with any
 of the aforesaid enterprises
 
 6.  Disclosure on Lease as per Accounting Standard 19 on Accounting
 for Lease:
 
 The company has entered into operating lease agreement for office
 premises, Guest house, warehouse and vehicle renewable on periodic
 basis and is cancelable. The rental expenses for operating lease are
 amounting to Rs.28.07 million (Previous year Rs.21.77 million) have been
 recognized in the P&L account.
 
 7.  Employee Benefit
 
 The company has an Employees'' Gratuity Fund managed by Life Insurance
 Corporation of India. As required by AS-15, the status of the present
 value of the obligations under the gratuity plan at the end of the
 period was Rs. 32.19 Million (Previous year Rs. 31.12 Million)whereas fair
 value of plan assets at the end of the period was of Rs. 38.92 Million
 (Previous year Rs. 35.00 Million). The total benefit of Rs. 4.31 Million
 (Previous year Rs. 2.67 Million) has been paid during the period. The
 return on plan assets during the period was Rs. 3.11 Million (Previous
 year Rs. 3.02 Million), however there was no excess / short amount over
 estimated return on plan assets.
 
 8.  For Winding up
 
 The Company had issued Foreign Currency Convertible Bonds (FCCB) on
 22nd October, 2007 which was due for repayment on 23rd October, 2012 or
 alternatively, the same was required to be converted into equity shares
 of the Company. Since the Company had proposed the restructuring of the
 FCCB to the Bond holders, it had applied to the Reserve Bank of India
 through Authorized Dealer for seeking approval for elongation of the
 maturity period of the FCCBs on 22nd October, 2012 and accordingly the
 Reserve Bank of India granted the approval for elongation of maturity
 period of the FCCB up to 23rd April, 2013. The Company had applied to
 Reserve Bank of India vide its letter dated 18th April, 2013, seeking
 approval for elongation of the maturity period of the FCCB by a period
 of twelve months . Reserve Bank of India vide its letter dated 15th
 January, 2014, extended the maturity till 23rd April, 2014. Since the
 company was unable to obtain the approval of all the bondholders with
 the restructuring proposal, the Company had again applied for seeking
 approval for elongation of the maturity period of the FCCB by a period
 of twelve months through letter dated 22nd April, 2014 which is pending
 for disposal by the Reserve Bank of India.
 
 The Company had on various occasions requested the Trustees viz.
 Citibank, in writing, to perform various duties under offering
 circular. However, the Trustee was negligent in performance of its
 duties under the said offering circular and did not comply with the
 requisition made by the company which included circulating the proposal
 for restructuring to all the bondholders and calling for the meeting of
 all the bondholders to discuss the same and also furnishing of details
 of all the bondholders and the details of the beneficial holders of the
 bonds. In the meantime, disputes had arisen between the Company,
 Trustee and Bond holders and pursuant to which the Company had filed a
 suit for damages against Trustees for USD 150 Million and a suit for
 damages against one of the purported Bond holder for USD 250 Million at
 District Court, Indore Madhya Pradesh. In consequence thereof, the
 Trustees had filed a winding up Petition against the Company which is
 pending for admission. The company has disputed the amount claimed by
 the Trustee on various grounds and responded to the demands made by the
 Trustee in this behalf.
 
 The liability of the Company for payments towards principal and
 maturity premium of the FCCBs would depend upon the outcome of the
 aforesaid suit filed by the Company and also on the outcome of the
 winding up petition that has been filed against the company. The
 winding up petition filed against the Company and the suits filed by
 the Company against the Trustee and the Bondholder are pending
 disposal. In spite of the above the financial statements are prepared
 on going concern basis.
 
 9.  Corporate Debt Restructuring
 
 The Lead Bank of the Company has proposed admission of the Company to
 Corporate Debt Restructuring (CDR) forum on 29th March, 2014 for
 providing debt restructuring scheme. The proposed debt restructuring
 scheme is pending approval of CDR Empowered Group for admission to the
 CDR forum.
 
 10.  Income Tax: (in Contingent Liabilities)
 
 (*) Relates to the demand raised by the Income Tax Department, Indore,
 for the assessment year 2005-06 to 2011-12, including penal interest
 and penalties. The Company has preferred appeals before the
 Commissioner of Income Tax (Appeals), against the said demand. Appeals
 preferred by the Company are pending for disposal.
 
                                                          in Million
                                               AS AT           AS AT
 Particulars                               31.03.2014       31.12.2012
 
 11.  CONTINGENT LIABILITIES NOT 
      PROVIDED FOR
 
 i Pending Bank Guarantee                      -                 0.16
 
 ii Corporate Guarantee against third 
 party Loan                                 448.40           2,150.00
 
 iii Pending Letter of Credit               440.11             111.70
 
 iv Estimated amount of contract remaining 
 unexecuted on capital account                2.66                -
 
 v Interest on FCCB not provided for the 
 overdue period                             629.24              81.81
 
 12.  Deferred Tax Liabilities
 
 The deferred tax liability of Rs. 4,38 million for the period ended 31st
 March, 2014 has been debited to the profit & loss account.
 
                                                            in Million
 
 Year end Deferred tax Liability comprises
 
 Excess of Book W.D.V Over Tax W.D.V.        4.38               8.40
 
 
 13.  The current accounting period is for a period of 15 Months. The
 same is in conformity with the amendment of the Companies Act 2013.
 Hence the financial year of the Company has changed from
 January-December to April-March.
Source : Dion Global Solutions Limited
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