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TRANSCRIPT
27th
ANNUAL REPORT2017-2018
LINCOLN PARENTERAL LIMITED
1Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
CORPORATE INFORMATION
BOARD OF DIRECTORS
Shri Anand A. Patel - Whole-Time Director Shri Iswarlal D. Patel - Director Smt. Hansaben A. Patel - Director Shri Bhagirath T. Patel - Director Shri Mahesh M. Patel - Director Shri Naresh P. Suthar - Director
AUDIT COMMITTEE
Shri Mahesh M. Patel - Chairman Shri Naresh P. Suthar - Member Shri Anand A. Patel - Member
NOMINATION AND REMUNERATION COMMITTEE
Shri Bhagirath T. Patel - Member Shri Mahesh M. Patel - Member Shri Naresh P. Suthar - Member
COMPANY SECRETARYMr. Bhavik P. Parikh
(w.e.f. March 27, 2018)
AUDITOR
M/S. J. T. SHAH & CO.Chartered Accountants
[Statutory Auditor]
BANKER
I.C.I.C.I Bank Ltd.
State Bank of India
CORPORATE IDENTITY NUMBER (CIN)U24231GJ1991PLC015674
REGISTERED OFFICE
“LINCOLN HOUSE”Behind Satyam Complex, Science City Road,
Sola, Ahmedabad-380060.Email ID : [email protected]
Ph. No. : +91-79-67778000, Fax : +91-79-67778062
PLANT
11, Trimul Estate, At. Khatraj, Ta-Kalol,District : Gandhinagar, Gujarat.
Ph. : +91-2764-665000Email ID : [email protected]
2 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
NOTICE
NOTICE is hereby given that the 27th Annual General Meeting of the members of LINCOLN PARENTERAL LIMITED will be held on Saturday, the 29th day of September, 2018 at 04.00 p.m. at the Registered Office of the Company at “LINCOLN HOUSE”, Behind Satyam Complex, Science City Road, Sola, Ahmedabad-380060 to transact the following businesses:
ORDINARY BUSINESSES:
1. To receive, consider and adopt the Audited Financial Statements including Balance Sheet as on March 31, 2018, Statement of Profit and Loss and Cash Flow Statement for the Year Ended on that date and the Report of the Directors’ and Auditors’ thereon.
2. To appoint a Director in place of Shri Bhagirath T. Patel [DIN: 00218155], who retires by rotation and being eligible offers himself for re-appointment.
3. To appoint a Director in place of Shri Anand A. Patel [DIN: 00103316], who retires by rotation and being eligible offers himself for re-appointment.
4. To consider and if thought fit, to pass with or without modification(s) the following resolution as an ORDINARY RESOLUTION:
RESOLVED THAT pursuant to the provisions of Section 139, 142 and any other applicable provisions, if any, of the Companies Act, 2013 and the Companies [Audit and Accounts] Rules, 2014 including any statutory modifications or re-enactment or modifications thereof, as may be application and pursuant to the recommendation of Audit Committee, M/s. J. T. Shah & Co. Chartered Accountants [FRN: 109616W] be and are hereby appointed as the Statutory Auditors of the Company to hold the office from the conclusion of this Annual General Meeting till the conclusion of 31st Annual General Meeting, on such remuneration as may be decided by Shri Anand Patel, Whole-Time Director of the Company in consultation with the Statutory Auditors in connection with the work carried out by the Auditors.
SPECIAL BUSINESSES:
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION:-
RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualifications of Directors) Rules, 2014 including any statutory modification(s) or re-enactment thereof for the time being in force read with Schedule IV of the Companies Act, 2013 Shri Mahesh Patel [DIN: 00103239], Independent Director of the Company, who has submitted a declaration that he meets the criteria of independence as provided in Section 149 (6) of the Act and being eligible for re-appointment be and is hereby re-appointed as an Independent Director of the Company, for further term of 5 (Five) consecutive years from April 01, 2019 and he shall not be liable to retire by rotation.
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION:-
RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualifications of Directors) Rules, 2014 including any statutory modification(s) or re-enactment thereof for the time being in force read with Schedule IV of the Companies Act, 2013 Shri Naresh P. Suthar [DIN: 03261937], Independent Director of the Company, who has submitted a declaration that he meets the criteria of independence as provided in Section 149 (6) of the Act and being eligible for re-appointment be and is hereby re-appointed as an Independent Director of the Company, for further term of 5 (Five) consecutive years from April 01, 2019 and he shall not be liable to retire by rotation.
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION:-
RESOLVED THAT in supersession of the resolution passed by the Company at its Extra-Ordinary General Meeting held on March 07, 2016 with respect to the Loan, Investment and Guarantee by the Board of Directors of the Company, and subject to such approvals, consents, sanctions and permissions, as may be necessary and the Articles of Association of the company and all other provisions of applicable laws, consent of the members of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the Board which term ,shall include any Committee constituted by the Board or any Person(s) authorized by the Board to exercise the powers conferred on the Board by this Resolution), to give loans to any person and/or Bodies corporate and/or give any guarantee or provide security in connection with a loan to any person and/or bodies corporate and/or acquire by way of subscription, purchase or otherwise, the securities of any Bodies Corporate up to an aggregate amount not exceeding Rs. 100 Crore (Rupees One Hundred Crore) notwithstanding that the aggregate of the loans or guarantees or security so far given or to be given and/or securities so far acquired or to be acquired by the Company may collectively exceed the limits prescribed under Section 186 of the Companies Act, 2013.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, any Director and the Company Secretary of the Company be and are hereby jointly and / or severally authorized to take from time to time all decisions and such steps as may be necessary for giving loans, guarantees or providing securities or for making such investments and for these matter(s) to execute such documents, deeds, writings, papers, and/or agreements as may be required and do all such acts, deeds, matters and things, as it may in is absolute discretion deem fit, necessary or appropriate.
8. To consider and if thought fit, to pass with or without modifications, the following resolution as a SPECIAL RESOLUTION:-
RESOLVED THAT in supersession of the earlier resolution passed at the Annual General Meeting of the Company held on September 30, 2014, pursuant to provisions of Section 188 and other applicable provisions of the Companies Act, 2013 and Rules framed there under, consent of the members be and is hereby accorded to the Board of Directors to enter into various related party transactions as per the details mentioned in the Explanatory Statement attached to this Notice.
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LINCOLN PARENTERAL LIMITED
RESOLVED FURTHER THAT the Board of Directors and / or any committee thereof be and is hereby authorised to settle any difficulty and doubts that may arise with regard to giving effect to the above resolution and to do all acts and take all such steps as may be necessary or expedient to give effect to this resolution.
9. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY RESOLUTION.
RESOLVED THAT pursuant to provisions of section 148 (3) and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, the consent of the members be and is hereby accorded to ratify the remuneration decided by the Board of Directors based on the recommendation of the Audit Committee of Rs. 55,000/- (Rupees Fifty Five Thousand Only)p.a. plus out of pocket expense to M/s. Kiran J. Mehta & Co., Cost Accountants [FRN: 000025], Ahmedabad appointed by the Board of Directors to conduct the audit of cost records relating to the products, manufactured by the Company for the Financial Year 2018-19.
NOTES:
1) A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company.
The Proxies in order to be valid must be delivered at the Registered Office of the Company not later than 48 hours before the commencement of the meeting. A person can act as the proxy on behalf of members not exceeding fifty and in aggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to be appointed by a Member holding more than ten percent of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.
2) Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 is annexed hereto.
3) A Route Map showing the Directions to reach the venue of the 27thAnnual General Meeting is attached along with the notice as per the requirement of Secretarial Standards-2 on General Meeting.
4) The details of Directors seeking Appointment/Re-appointment at the Annual General Meeting of the Company to be held on September 29, 2018 are furnished as annexure to this Notice.
Place : Ahmedabad By order of the BoardDate : May 30, 2018 For Lincoln Parenteral LimitedRegistered Office: “LINCOLN HOUSE” Behind Satyam Complex, Science City Road, Sola, Bhavik P. ParikhAhmedabad-380060 Company Secretary
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013Item No: 4Shri Mahesh Patel [DIN: 00103239] was appointed as an Independent Director as per Section 149 and other applicable provisions of Companies Act, 2013 at the Annual General Meeting held on September 30, 2014 for a period of 5 [Five] consecutive years till March 31, 2019. The Company had received from him requisite consent, intimation and a declaration that he meets the criteria of independence as provided under Section 149(6) of the Act, in connection with his re-appointment as an independent Director.Based on the performance evaluation, his positive attributes, expertise, independence, and on recommendation of Nomination and Remuneration Committee the re-appointment of Shri Mahesh Patel as an Independent Director is proposed by the Board to the members in terms of Section 149 read with Schedule IV of the Companies Act, 2013. All the relevant documents with regard to his re-appointment as an Independent Director shall be available for inspection to the members at the Registered Office of the Company between 10:00 am and 1:00 pm on all working days (Monday to Friday), except Saturdays, Sundays and holidays, up to the date of the Annual General Meeting.In view of the above your Directors recommends passing of the proposed special resolution.Except Shri Mahesh Patel, being an appointee, none of the other Directors, Key Managerial Personnel of the Company, and/or their relatives are in any way concerned or interested financially or otherwise in the proposed resolution. The proposed resolution does not relate to or affect any other company.Item No: 5Shri Naresh P. Suthar [DIN: 03261937] was appointed as an Independent Director as per Section 149 and other applicable provisions of Companies Act, 2013 at the Annual General Meeting held on September 30, 2014 for a period of 5 [Five] consecutive years till March 31, 2019. The Company had received from him requisite consent, intimation and a declaration that he meets the criteria of independence as provided under Section 149(6) of the Act, in connection with his re-appointment as an independent Director.Based on the performance evaluation, his positive attributes, expertise, independence, and on recommendation of Nomination and Remuneration Committee the re-appointment of Shri Naresh P. Suthar as an Independent Director is proposed by the Board to the members in terms of Section 149 read with Schedule IV of the Companies Act, 2013. All the relevant documents with regard to his re-appointment as an Independent Director shall be available for inspection to the members at the Registered Office of the Company between 10:00 am and 1:00 pm on all working days (Monday to Friday), except Saturdays, Sundays and holidays, up to the date of the Annual General Meeting.In view of the above your Directors recommends passing of the proposed special resolution.Except Shri Naresh P. Suthar, being an appointee, none of the other Directors, Key Managerial Personnel of the Company, and/or their relatives are in any way concerned or interested financially or otherwise in the proposed resolution. The proposed resolution does not relate to or affect any other company.
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LINCOLN PARENTERAL LIMITED
Item No: 6
The Company had at its Extra-Ordinary General Meeting held on March 07, 2016, approved by way of Special Resolution passed under Section 186 of the Companies Act, 2013 that the company can make any loan, investment or give guarantee or provide any security beyond the prescribed ceiling of i) Sixty per cent of aggregate of the paid up capital and free reserves and securities premium account or, ii) Hundred per cent of its free reserves and securities premium account which shall not exceed Rs. 60 Crore.
As per the provisions of Section 186 of the Companies Act, 2013 if the amount of any loans or investments made by the Company or guarantee or security provided by the Company exceeds the limits for which the Company has already taken the approval, a fresh approval of members by way of special resolution is required to be obtained. Accordingly it is proposed to give powers, to the Board of Directors or any duly constituted committee thereof, for making further investment, providing loans or give guarantee or provide security in connection with loans to any person/bodies corporate (including overseas subsidiaries) for an amount not exceeding Rs. 100 Crore (Rupee One Hundred Crore only).
The investment(s), loans(s), guarantee(s) and security (ies), as the case may be, will be made in accordance with the applicable provisions of the Companies Act, 2013 and relevant Rules made there under.
In view of the above, your Directors recommend the passing of the proposed Special Resolutions at Item No. 6 of the Notice.
None of the Directors, Key Managerial Personnel of the Company, and/or their relatives are in any way concerned or interested financially or otherwise in the proposed resolution. The proposed resolution does not relate to or affect any other company.
Item No: 7
The Company is inter-alia, engaged in the business of Manufacturing and distribution of pharmaceutical products. The Company in the ordinary course of its business is entering into transaction relating to Sale/Purchase of various Goods/Materials, Job-work and availing of services with the below mentioned related parties within the meaning of Section 2(76) of the Companies Act.
1. Lincoln Pharmaceuticals Limited - Holding Company
2. Zullinc Healthcare LLP - Subsidiary of Holding Company
The transactions with the aforesaid related parties are entered into in the ordinary course of business and on arm’s length price. However, for abundant caution and as a good corporate practice, your Directors thought it fit to get the approval of members.
Details of transactions relating to sale/purchase of goods, materials, availing of services and job work with the above mentioned related parties for period of three years with effect from October 01, 2018 will be on following terms and conditions:
The particulars of the contracts/arrangements/transactions are as under:
Name of Related Party
Name of Directors or KMPs who is / are related
Nature of relationship
Nature of contracts/arrangements/transactions
Material terms of the contracts/arrangements/transactions
Monetary Value
Lincoln Pharmaceuticals Limited
NA Holding Company
Sale/ Purchase of Goods, Materials and Job Work.
At prevailing prices on arm’s length basis and on Industry practice terms.
Upto Rs. 50 Cr. in Each Year.
Zullinc Healthcare LLP Mr Mahendra Patel and Mr. Hasmukh Patel (Designated Partners)
Subsidiary of Holding Company
Sale/ Purchase of Goods, Materials and Job Work.
At prevailing prices on arm’s length basis and on Industry practice terms.
Upto Rs. 30 Cr. in Each Year.
Pursuant to the provisions of Section 188 of the Companies Act, 2013 read with the relevant Rules framed thereunder approval of the members is required to be availed for entering into transactions with related parties as defined in Section 2 (76) of the Companies Act, 2013.
In view of the above, your Directors recommend the passing of the proposed Special Resolutions at Item No. 7 of the Notice.
Except Shri Anand Patel, Whole Time Director along with his relatives, none of the other Directors Key Managerial Personnel of the Company, and/or their relatives are in any way concerned or interested financially or otherwise in the proposed resolution. The proposed resolution does not relate to or affect any other company.
Item No: 8
The Board of Directors on the recommendation of the Audit Committee, has appointed M/s. Kiran J. Mehta & Co., Cost Accountants [FRN : 000025], Ahmedabad to conduct the Audit of the Cost Records of the Company for the Financial Year ending on March 31, 2019.
As per the provisions of section 148(3) of the Companies Act, 2013 read with The Companies (Cost Records and Audit Rules) 2014, the remuneration payable to the Cost Auditors is required to be ratified by the Members of the Company.
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LINCOLN PARENTERAL LIMITED
Accordingly, consent of the Members of the Company is sought for passing the resolution for ratification of the remuneration payable to the Cost Auditors and your Directors recommend passing of the proposed resolution.
None of the Directors or Key Managerial Personnel and/or their relatives, in any way, concerned or interested, financially or otherwise, in the proposed resolution.
Place : Ahmedabad By order of the BoardDate : May 30, 2018 For Lincoln Parenteral LimitedRegistered Office: “LINCOLN HOUSE” Behind Satyam Complex, Science City Road, Sola, Bhavik P. ParikhAhmedabad-380060 Company Secretary
ANNEXURE TO NOTICE
INFORMATION TO SHAREHOLDERS
DETAILS OF THE DIRECTORS SEEKING RE-APPOINTMENT IN THE FORTHCOMING ANNUAL GENERAL MEETING
1 Name of Director Shri Bhagirath T. Patel Shri Anand A. Patel Shri Mahesh M. Patel Shri Naresh P. Suthar
2 DIN 00218155 00103316 00103239 03261937
3 Date of Birth May 20, 1954 May 07, 1981 October 07, 1962 December 29, 1975
4 Date of Appointment on the Board
April 01, 2005 July 01, 2010 June 24, 2010 June 24, 2010
5 Qualifications B.A B.Com Graduate B.Com
6 Total Remuneration last drawn
Nil Rs. 10.92 Lakhs Nil Nil
7 Nature of Expertise in Specific functional area
Management &Administration
Purchase of Raw materials and packing materials, Formulation of Strategy and Policy decision.
Production & Administration
Purchase & Operation
8 Relationship with other Directors, Manager and other Key Managerial Personnel
None Shri Anand A. Patel is son of Smt. Hansaben A. Patel
None None
9 Directorship held in other Public Companies
M/s. Karnavati Distributors Limited
None M/s. Karnavati Distributors Limited
None
10 Chairmanship /Membership of Committee in other Companies, if any
None None None None
11 Number of Shares held in the Company as on March 31, 2018
None None None None
6 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
DIRECTORS’ REPORT
To,The Members,
Your Directors presents the 27th Annual Report, on the business and operations of LINCOLN PARENTERAL LIMITED (hereafter referred to as ‘The Company’) together with Audited Financial Statements and Auditors’ Report for the Financial Year Ended on March 31, 2018.
FINANCIAL PERFORMANCE:
The Financial Statements are prepared in accordance with Indian Accounting Standards (IND-AS). In accordance with the notification issued by Ministry Corporate Affairs dated February 16, 2015, the Company has adopted IND-AS with effect from April 01, 2017 being First IND-AS Financial Statement.
(Rs. in Lakhs)
Particulars For the
Year EndedMarch 31, 2018
For the Year Ended
March 31, 2017
Revenue from Operations 7,124.36 6,348.96
Other income 80.90 139.01
Profit before Depreciation and Taxation 484.95 321.24
less: Depreciation 171.25 166.32
Profit before Taxation 313.70 154.93
Less: Tax Expenses 122.50 81.85
Profit After Tax for the year 191.21 73.07
Other Comprehensive Income 0.68 0.18
Total Comprehensive Income for the period[Comprising Profit for the period (after tax) and Other Comprehensive Income]
191.89 73.25
STATE OF COMPANY’S AFFAIRS/OPERATIONS:
During the year under review, the Company has performed well. The turnover of the Company during the year under review was Rs. 7,124.36 Lakhs as against Rs. 6,348.96 Lakhs in the previous year. The Profit after Tax has increased to Rs. 191.21 Lakhs as against profit after tax of Rs. 73.07 Lakhs in previous year.
DIVIDEND AND TRANSFER TO RESERVES:
In order to conserve the resources, your Directors do not recommend any payment of dividend for the year under review. Further the Company has not transferred any amount to reserves during the year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Rules framed there under, Shri Bhagirath T. Patel [DIN: 00218155], Director and Shri Anand A. Patel [DIN: 00103316], Whole-Time Director of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.
In accordance with the provisions of Section 149 of the Companies Act, 2013 and other applicable provisions if any, of the Companies Act, 2013, Shri Mahesh M. Patel [DIN: 00103239] and Shri Naresh Suthar [DIN: 03261937] being eligible for re-appointment as Independent Directors have offered themselves for their re-appointment for further term of five consecutive years w.e.f. April 01, 2019. The Board recommended their re-appointment as Independent Directors.
During the under review, Mr. Bhavik P. Parikh, Company Secretary [ACS: 40719] have been appointed as Whole-Time Company Secretary and key-Managerial Personnel of the Company with effect from March 27, 2018.
DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors of the Company have given the declaration to the Company that they meet the criteria of independence as provided in of Section 149 (6) of the Companies Act, 2013.
POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:
The Directors Appointment and Remuneration policy of the Company is provided as under:
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Criteria determining the qualifications, positive attributes and independence of a Director and Policy for appointment and removal:
INDEPENDENT DIRECTORS
• Qualifications of Independent Director:-
An Independent director shall possess appropriate skills, experience and knowledge in one or more fields of medical, finance, law, management, sales, marketing, administration, research, corporate governance, operations or other disciplines related to the company’s business.
• Positive attributes of Independent Directors:-
An independent director shall be a person of integrity, who possesses relevant expertise and experience and who shall uphold ethical standards of integrity and probity; act objectively and constructively; exercise his responsibilities in a bona-fide manner in the interest of the company; devote sufficient time and attention to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices.
• Independence of Independent Directors:-
An Independent director should meet the requirements of Section 149, Schedule IV of the Companies Act, 2013.
OTHER DIRECTORS AND SENIOR MANAGEMENT
i. The Nomination and Remuneration Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director or at Senior Management level and recommend to the Board his / her appointment.
ii. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The said Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.
iii. The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years. Moreover any person appointed shall not continue in the Company if the evaluation of his performance is not satisfactory to the said committee.
RATIONALE FOR REMUNERATION FRAMEWORK
i. Internal Ratios: The Compensation package for employees at levels lower than Executive Directors should be revised in the form of performance increments, structural improvements and Cost of Living Adjustments at regular intervals. This will lead to a compressing of the compensation differential between the lowest and highest levels of executive management.
ii. Compliance & Risk Parameters: In view of company law regulations, the compliance roles of Executive Directors far outweigh that of any other level, and consequently the risk parameters associated with these jobs are of a significantly higher level as compared to the junior levels and accordingly the remuneration should be paid.
a. Remuneration Pattern:
Executive Directors
Structure: A summary of the structure set is as mentioned below:
Components Item Description Policy
Base Salary • Reflects the person’s experience, criticality of the role with the Company and the risk factor involved
• Consolidated Salary fixed for each financial year
• This component is also used for paying retiral benefits
• Paid on a monthly basis
Normally positioned as the highest as compared to the other components.
Short-term incentive • Based totally on the performance of the Director
• Variable component of the remuneration package
• Paid on an annually basis
Determined by the Nomination and Remuneration Committee after year-end based on the evaluation of performance against the pre-determined financial and non- financial metrics
Long-term incentive • Drive and reward delivery of sustained long-term performance
• Variable long-term remuneration component.
Determined by the Nomination and Remuneration Committee and distributed on the basis of time, level and performance
Retiral Benefits • Provide for sustained contribution
• Accrues depending on length on service.
Paid post separation from the Company as per the Rules of the Provident Fund and Gratuity Acts
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LINCOLN PARENTERAL LIMITED
Key Management Personnel and Senior Management And Other Employees
(1) “Senior Management” shall mean the personnel of the company who are members of its core management team excluding the Board of Directors including Functional Heads.
(2) The remuneration package of the Key Management and Senior Management and Other Employees comprises of :
(a) Fixed Remuneration: This includes a Monthly Salary such as Consolidated Pay, Variable House Rent Allowance, Compensatory Allowance, Utility Allowance, Interest Subsidy on Housing Loans;
(b) Annual Allowances: This consists of Leave Travel Allowance, Medical Reimbursement and House Maintenance Allowance
(c) Retirals: This includes Provident Fund, Gratuity and Superannuation, if any.
Non-Executive Directors
The Remuneration to the non-executive Directors should be determined as per the provisions of the Companies Act, 2013 and related rules framed there under. However the Nomination and Remuneration Committee may from time to time suggest the payment and revision in the same as and when necessary.
b. Remuneration Mix:
The total remuneration package is designed to provide an appropriate balance between fixed and variable components with focus on Performance Related Pay so that strong performance is incentivized but without encouraging excessive risk taking.
The Board has approved a policy for Directors Appointment and Remuneration in its meeting held during the year under review.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to the Directors’ responsibility Statement, the Directors Confirms that:
I. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
II. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit of the Company for that period.
III. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
IV. They have prepared the annual financial statements ongoing concern basis.
V. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
BOARD MEETINGS AND COMMITTEE MEETINGS:
During the year under review, the Board of Directors duly met 6times and the details of attendance of Directors/Members are as follows:
Name of Directors Date of Board Meeting Total No. of Meetings attended17/04/2017 30/05/2017 13/09/2017 11/12/2017 31/01/2018 27/03/2018
Shri Anand A. Patel 6/6
Smt. Hansaben A. Patel × × × × 2/6
Shri Iswarlal D. Patel × × 4/6
Shri Bhagirath T. Patel × × 4/6
Shri Mahesh M. Patel 6/6
Shri Naresh P. Suthar × × × × 2/6
Name of Directors/ Members
Date of Audit Committee Meeting Total No. of Meetings attended17/04/2017 30/05/2017 13/09/2017 11/12/2017 31/01/2018 27/03/2018
Shri Mahesh M. Patel 6/6
ShriAnand A. Patel 6/6
Shri Naresh P. Suthar × × × × 2/6
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Name of Directors/ Members Date of Nomination and Remuneration Committee Meeting Total No. of Meetings attended30/05/2017 31/01/2018
Shri Bhagirath T. Patel × 1/2
Shri Mahesh M. Patel 2/2
Shri Naresh P. Suthar × 1/2
INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY:
The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations.
MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY:
No material changes or commitments, affecting the financial position of the Company have occurred between the end of the Financial Year of the company to which the financial statements relate and the date of the Board’s Report.
DEPOSITS:
The Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 during the period under review.
LOANS, GUARANTEES &INVESTMENTS U/S. 186 OF THE COMPANIES ACT, 2013:
The particulars of loan given, investment made and guarantee and security given by the Company (if any) during the Financial Year under review and governed by the provisions of Section 186 of the Companies Act, 2013 have been furnished in the Notes to the Financial Statements. The details of the Loans given during the year under review falling under Section 186 of the Companies Act, 2013 is also given below:
Sr. No. Nature of Transaction(Loan, Investment & Guarantee)
Purpose for which Loan is proposedTo be utilized by the Recipient
Amt. in Rs.
Unsecured Loan
1. Tirupati Trade and Finance Company For Business activities of the Company 96,76,560/-
2. Advent Tradelink Private Limited For Business activities of the Company 11,66,07,110/-
CORPORATE SOCIAL RESPONSIBILITY:
Your Company does not fall under the criteria mentioned in the provision of Section 135 of the Companies Act, 2013 (“the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the constitution of CSR Committee is not applicable and accordingly the Company is not required to spend any amount in CSR Activity.
INSURANCE:
The properties / assets of the Company are adequately insured.
RISK MANAGEMENT POLICY:
The Management is regularly reviewing the risk and is taking appropriate steps to mitigate the risk. The company has in place proper Risk Management policy. The Risk management Policy is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to mitigate the risk in order to minimize the impact of the risk on the Business.
In the opinion of the Board there is no identification of element of Risk that may threaten the existence of the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During the year under review, all transactions entered into with Related Parties as defined under the Companies Act, 2013, during the Financial Year were in the ordinary course of business and on an arm’s length basis.
The related party transactions entered into by the Company during the year under review are as reported in FormAOC-2 in “Annexure-I”.
AUDITORS:
i. COST AUDITOR:-
Pursuant to provisions of section 148 (3) and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, have been appointed to conduct cost audit for the year ending on March 31, 2019.
ii. STATUTORY AUDITORS:-
Pursuant to the provisions of Section 139, 142 and other applicable provisions of Companies Act, 2013 read with the relevant rules framed thereunder, it is proposed to appoint M/s. J. T. Shah & Co. Chartered Accountants (FRN: 109616W) as the Statutory Auditors
10 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
of the Company till the conclusion of the 31st Annual General Meeting of the Company. Necessary consent and the eligibility has been obtained from the Statutory Auditors. Accordingly a resolution proposing their appointment is set out in the Notice convening the Annual General Meeting. The Board recommends passing of the proposed Resolution.
There were no qualifications, reservations or adverse remarks in the Audit Report of M/s. J. T. Shah & Co. which required the comments of the management under Section 134 of the Companies Act, 2013.
AUDIT COMMITTEE:
The Audit Committee of the Company as on March 31, 2018 consists of following Directors as its members:
i. Shri Mahesh M. Patel – Chairman
ii. Shri Anand A. Patel – Member
iii. Shri Naresh P. Suthar – Member
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013read with Rule, 8 of The Companies (Accounts) Rules, 2014, is as given below:
(A) Conservation of energy-
(i) the steps taken or impact on conservation of energy; In order to conserve resources, the Company has taken measures and applied control system to monitor day to day power consumption, to endeavor to ensure the optimal use of energy with minimum extent possible wastage as far as possible. There is no specific investment plan for energy conservation. On account of measures taken, it reduces the energy consumption.
(ii) the steps taken by the company for utilizing alternate sources of energy;
In addition to various initiatives around energy efficiencies, the Company has also focused on renewable sources of energy. Various steps taken for utilizing alternate sources of energy include installation of energy saving system for lights.
(iii) the capital investment on energy conservation equipment’s. N.A.
(B) Technology absorption-
(i) the efforts made towards technology absorption; There is no technology absorption and Company has not incurred any Research and development expenditure.
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution N.A.
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year:-
(a) the details of technology imported;
(b) the year of import
(c) whether the technology been fully absorbed
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof;
(iv) the expenditure incurred on Research and Development
(C) Foreign Exchange Earning and Outgo:
(i) Foreign Exchange Earning NIL
(ii) Foreign Exchange Outgo NIL
DISCLOSURE UNDER RULE 5 (2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
No employee of the Company is covered under the above rules and hence the Company is not required to report here.
INDUSTRIAL RELATIONS:
The Company has maintained cordial relations with the employees of the Company throughout the year. The Directors wishes to place on record sincere appreciation for the services rendered by the employees of the Company during the year.
11Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return for the financial year ended under review in the prescribed form MGT - 9, pursuant to provisions of Section 92(3) of the Companies Act, 2013 is annexed to this report as “Annexure-II”.
VIGIL MECHANISM:
Pursuant to provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policy Directors, Employees or business associates may report the unethical behavior, malpractices, wrongful conduct, frauds, violations of the Company’s code etc. to the Chairman of the Audit Committee.
SIGNIFICANT OR MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS:
As on the date of this report, there were no material significant orders passed by the regulators or courts or tribunals impacting the going concern of the Company.
ACKNOWLEDGMENT:
The Board acknowledges with thanks the overall support extended by the employees, suppliers, customers and other stakeholders.
By Order Of The Board For Lincoln Parenteral Limited
Anand A. Patel Mahesh M. PatelPlace : Ahmedabad Whole-Time Director DirectorDate : May 30, 2018 [DIN: 00103316] [DIN: 00103239]
12 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
ANNEXURE ‘I’FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in subsection(1) of section 188 of the Companies Act, 2013
including certain arm’s length transactions under third proviso thereto:
1. Details of contracts or arrangements or transactions not at arm’s length basis:
All contracts/arrangements entered into by the Companywith related parties referred to in sub-section (1) of Section 188 of theCompaniesAct,2013areatarms’lengthbasis.
2. Details of material contracts or arrangement or transactions at arm’s length basis:
(Rs. in Lakhs)
SN Name of therelated party
Nature ofrelationship
Nature ofcontracts/
arrangements/ transactions
Duration ofcontracts/
arrangements /transactions
Salient featuresof contracts/
arrangements /transactions,
including value, if any
Date(s) of approval
by theBoard
Amountpaid as
advances,if any
1 2 3 4 5 6 7
1. Lincoln Pharmaceuticals Ltd
Holding Company
Purchase ofpharmaceutical
products
Sales of Rawmaterials and
pharmaceuticalproducts
April 01,2017To
March 31,2018
43.95
2,836.67
As Per Note*
NIL
2. Zullinc Healthcare LLP Subsidiary of Holding Company
Sale of Goods / Materials
April 01,2017To
March 31,2018
3,152.61 As Per Note*
NIL
3. Mansi A. Patel Relative of Director
Availing service April 01,2017To
March 31,2018
10.49 As Per Note*
NIL
* Above mentioned transactions are done at the arm’s length price and at the prevailing market rate. Appropriate approvals, where ever required, have been taken for related party transactions. No amount has been paid as advance.
By Order Of The Board For Lincoln Parenteral Limited
Anand A. Patel Mahesh M. PatelPlace : Ahmedabad Whole-Time Director DirectorDate : May 30, 2018 [DIN: 00103316] [DIN: 00103239]
13Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
ANNEXURE ‘II’
FORM NO. MGT - 9EXTRACT OF ANNUAL RETURN
AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2018[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1)
of the Companies (Management and Administration) Rules, 2014]
1. REGISTRATION AND OTHER DETAILS
CIN U24231GJ1991PLC015674
Registration Date: May 17, 1991
Name of the Company: Lincoln Parenteral Limited
Category/Sub-category of the Company: 1. Company Limited By Share2. Indian Non-government Company
Address of the Registered Office and Contact Details:
“LINCOLN HOUSE”, Behind Satyam Complex, Science City Road, Sola, Ahmedabad-380060.Ph. No.: +91-79-67778000, Fax No.: +91-79-67778062.Email ID: [email protected]
Whether Listed Company: No
Name, Address and contact details of Registrar and Share Transfer Agent (RTA), if any:
No
2. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
SN Name and Description of main products NIC Code of the Product % to total turnover of the company
1. Pharmaceutical products 2100* 100%
3. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
SN Name and address of the Company CIN / LLPIN Holding/Subsidiary/ Associate
% of shares held
ApplicableSection
1. “Lincoln Pharmaceuticals Limited “LINCOLN HOUSE”, Behind Satyam Complex, Science City Road, Sola, Ahmedabad-380060.”
L24230GJ1995PLC024288 Holding 98.58% 2 (46)
14 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
4. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i. Category-wise Share Holding
Category ofShareholders
No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change during
the year
Physical Demat Total % of Total
Shares
Physical Demat Total % of Total
Shares
A. Promoters1) Indiana) Individual / HUF 56,430 - 56,430 0.56 56,430 - 56,430 0.56 - b) Central Govt. - - - - - - - - - c) State Govt.(s) - - - - - - - - - d) Bodies Corp. 9,858,450 - 9,858,450 98.58 9,858,450 - 9,858,450 98.58 - e) Banks / FI - - - - - - - - - f) Any Other - - - - - - - - - Sub-total(A) (1):- 9,914,880 - 9,914,880 99.15 9,914,880 - 9,914,880 99.15 - 2) Foreigna) NRIs – Individuals - - - - - - - - - b) Other –Individuals - - - - - - - - - c) Bodies Corp. - - - - - - - - - d) Banks / FI - - - - - - - - - e) Any Other…. - - - - - - - - - Sub-total (A) (2):- - - - - - - - - - Total shareholding of Promoter (A) =(A)(1)+(A)(2)
9,914,880 - 9,914,880 99.15 9,914,880 - 9,914,880 99.15 -
B. Public Shareholding1. Institutionsa) Mutual Funds - - - - - - - - - b) Banks / FI - - - - - - - - - c) Central Govt. - - - - - - - - - d) State Govt.(s) - - - - - - - - - e) Venture Capital
Funds - - - - - - - - -
f) Insurance Companies - - - - - - - - - g) FIIs/FPI - - - - - - - - - h) Foreign Venture
Capital funds - - - - - - - - -
i) Others (specify) - - - - - - - - - Sub-total(B)(1):- - - - - - - - - - 2. Non- Institutionsa) Bodies Corp. - - - - - - - - - b) IndividualsI. Individual
shareholders holding nominal share capital upto ` 1 lakh
- - - - - - - - -
II. Individual shareholders holding nominal share capital in excess of `1 lakh
85,120 - 85,120 0.85 85,120 - 85,120 0.85 -
c) Othersa) NRI - - - - - - - - - b) Clearing Member - - - - - - - - - c) HUF - - - - - - - - - Sub-total(B)(2):- 85,120 - 85,120 0.85 85,120 - 85,120 0.85 - Total Public Shareholding (B)=(B)(1)+ (B)(2)
85,120 - 85,120 0.85 85,120 - 85,120 0.85 -
C. Shares held by Custodian for GDRs & ADRs
- - - - - - - - -
Grand Total (A+B+C) 10,000,000 - 10,000,000 100.00 10,000,000 - 10,000,000 100.00 -
15Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
ii. Shareholding of Promoters
SN Shareholder’s Name Shareholding at the beginning of the year
Shareholding at the end of the year % change in shareholding
during the year
No. of Shares
% of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
No. of Shares
% of total Shares of the
company
%of Shares Pledged /
encumbered to total shares
1 M/s. Lincoln Pharmaceuticals Ltd
9,858,450 98.58 - 9,858,450 98.58 - -
2 Shri Pursottamdas D. Patel
28,880 0.29 - 28,880 0.29 - -
3 Shri Somabhai D. Patel 27,550 0.28 - 27,550 0.28 - -
TOTAL 9,914,880 99.15 - 9,914,880 99.15 - -
iii. Change in Promoters’ Shareholding (please specify, if there is no change): No Change
iv. Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
SN For Each of the Top 10 Shareholders Shareholding at the beginning of the year
Shareholding at the end of the year
No. of shares
% of total shares of the company
No. of shares
% of total shares of the company
1 Shri Bharatbhai S. Patel 19,000 0.19 19,000 0.19
2 Smt. Vidhyaben S. Patel 28,120 0.28 28,120 0.28
3 Shri Kiritbhai S. Patel 19,000 0.19 19,000 0.19
4 Shri Kalpeshbhai S. Patel 19,000 0.19 19,000 0.19
TOTAL 85,120 0.85 85,120 0.85
v. Shareholding of Directors and Key Managerial Personnel:
SN For Each of the Directors and KMP Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
% of total shares of the company
No. of shares
% of total shares of the company
1 Anand A. Patel
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
2 Smt. Hansaben A. Patel
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
3 Shri Bhagirath T. Patel
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
4 Shri Iswarlal D. Patel
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
16 Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
SN For Each of the Directors and KMP Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
% of total shares of the company
No. of shares
% of total shares of the company
5 Shri Mahesh M. Patel
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
6 Shri Naresh P. Suthar
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
7 *Mr. Bhavik Parikh
At the beginning of the year - - - -
Date wise changes during the year NIL
At the End of the year - - - -
* Appointed w.e.f. March 27, 2018
5) INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment(` In Lakhs)
Secured Loans excluding deposits
UnsecuredLoans
Deposits Total Indebtedness
Indebtedness at the beginning of the Financial Yeari. Principal Amountii. Interest due but not paidiii. Interest accrued but not due
1,146.20––
–––
–––
1,146.20––
Total (i+ii+iii) 1,146.20 – – 1,146.20
Change in Indebtedness during the Financial Year
• Addition - - - -
• Reduction 617.26 - - 617.26
Net Change- Addition/ (Reduction) 617.26 - - 617.26
Indebtedness at the end of the Financial Yeari. Principal Amountii. Interest due but not paidiii. Interest accrued but not due
528.94––
––
–––
528.94––
Total (i+ii+iii) 528.94 – – 528.94
17Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED
6) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL.
A. Remuneration to Managing Director, Whole-Time Directors and/or Manager: (` In Lakhs)
SN Particulars of Remuneration Name of MD/WTD/ Manager Total AmountAnand A. Patel-WTD
1. Gross salary(a) Salary as per provisions contained in section 17 (1) of the Income-tax Act, 1961
10.66 10.66
(b) Value of perquisites u/s 17 (2) Income-tax Act,1961 0.26 0.26
(c) Profits in lieu of salary under section 17 (3) Income- tax Act,1961 – –2. Stock Option – –3. Sweat Equity – –4. Commission
- as % of profit- others specify
– –
5. Others, please specify – –Total (A) 10.92 10.92Ceiling as per the Act 120.00 120.00
B. Remuneration To Other Directors: Not Applicable C. Remuneration To Key Managerial Personnel Other than MD/Manager/WTD (` In Lakhs)
SN Particulars of Remuneration Key Managerial PersonnelCEO Company
SecretaryCFO Total
1. Gross salary(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section17(3) Income-tax Act, 1961
- 0.17 - 0.17
2. Stock Option – – – –3. Sweat Equity – – – –4. Commission
- as % of profit- Others, specify…
– – – –
5. Others, please specify – – – –TOTAL - 0.17 - 0.17
7) PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:
Type Section of the Companies Act
Brief Description
Details of penalty/ punishment/ compounding fees imposed
Authority [RD/NCLT/ COURT]
Appeal made if any (give details)
A.COMPANYPenalty
NONEPunishmentCompoundingB.DIRECTORSPenalty
NONEPunishmentCompoundingC.OTHER OFFICERS IN DEFAULTPenalty
NONEPunishmentCompounding
By Order Of The Board For Lincoln Parenteral Limited
Anand A. Patel Mahesh M. PatelPlace : Ahmedabad Whole-Time Director DirectorDate : May 30, 2018 [DIN: 00103316] [DIN: 00103239]
18 Annual Report 2017-2018
INDEPENDENT AUDITORS’ REPORT
ToThe MembersLincoln Parenteral LimitedAhmedabad
1. Report on the Standalone Ind AS Financial Statements
WehaveauditedtheaccompanyingstandaloneIndASfinancialstatementsofLincoln Parenteral Limited (hereinafterreferredas“theCompany”), which comprise the Balance Sheet as at 31st March, 2018,theStatementofProfitandLoss(includingOtherComprehensiveIncome), theCashFlowStatement, theStatementofChanges inEquity fortheyearthenendedandasummaryof thesignificantaccountingpoliciesandotherexplanatoryinformation.
2. Management’s Responsibility for the Standalone Financial Statements
TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedinSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationof thesestandalone IndASfinancialstatementsthatgiveatrueandfairviewof thefinancialposition,financialperformanceincludingothercomprehensiveincome,cashflowsandchangesinequityoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheIndianAccountingStandards(IndAS)prescribedundersection133oftheAct.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act forsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudentanddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthestandaloneIndASfinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.
3. Auditors’ Responsibility
OurresponsibilityistoexpressanopiniononthesestandaloneIndASfinancialstatementsbasedonouraudit.WehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.
WeconductedourauditofthestandaloneIndASfinancialstatementsinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthestandaloneIndASfinancialstatementsarefreefrommaterialmisstatement.
AnauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresinthestandaloneIndASfinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthestandaloneIndASfinancialstatements,whetherduetofraudorerror. Inmakingthoseriskassessments;theauditorconsidersinternalfinancialcontrolrelevanttotheCompany’spreparationofthestandaloneIndASfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessof theaccountingpoliciesusedand the reasonablenessof theaccountingestimatesmadeby theCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthestandaloneIndASfinancialstatements.
WebelievethattheauditevidencewehaveobtainedaresufficientandappropriatetoprovideabasisforourauditopiniononthestandaloneIndASfinancialstatements.
4. Opinion
Inouropinionand to thebestofour informationandaccording to theexplanationsgiven tous, theaforesaidstandalone IndASfinancialstatementsgivetheinformationrequiredbytheActinthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndiaincludingtheIndAS,ofthefinancialpositionoftheCompanyasat31st March, 2018anditsfinancialperformanceincludingothercomprehensiveincome,itscashflowsandthechangesinequityfortheyearendedonthatdate.
5. OtherMatters
ThecomparativefinancialinformationoftheCompanyfortheyearended31stMarch2017andthetransitiondateopeningbalancesheet as at 1stApril 2016 included in these standalone IndASfinancial statements are basedon thepreviously issued statutoryfinancialstatementspreparedinaccordancewiththeCompanies(AccountingStandards)Rules,2006auditedbyotherauditor,whosereportfortheyearended31stMarch2017and31stMarch2016dated30thMay,2017and30thMay,2016respectivelyexpressedanunmodifiedopiniononthosestandalonefinancialstatements,asadjustedforthedifferencesintheaccountingprinciplesadoptedbytheCompanyontransitiontotheIndAS,whichhavebeenauditedbyotherauditor.
6. Report on Other Legal and Regulatory Requirements
1. AsrequiredbytheCompanies(Auditor’sReport)Order,2016(“theOrder”)issuedbytheCentralGovernmentintermsofSection143(11)oftheAct,wegivein“AnnexureA”astatementonthemattersspecifiedinparagraphs3and4oftheOrder.
2. AsrequiredbySection143(3)oftheAct,wereportthat:
a) Wehavesoughtandobtainedall the informationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit.
19Annual Report 2017-2018
b) Inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks.
c) TheBalanceSheet,theStatementofProfitandLoss,theCashFlowStatementandStatementofChangesinEquitydealtwithbythisReportareinagreementwiththebooksofaccount.
d) Inouropinion,theaforesaidstandaloneIndASfinancialstatementscomplywiththeIndianAccountingStandardsprescribedundersection133oftheAct.
e) Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31stMarch,2018takenonrecordbytheBoardofDirectors,noneofthedirectors isdisqualifiedason31stMarch,2018frombeingappointedasadirector intermsofSection164(2)oftheAct.
f) WithrespecttotheadequacyoftheinternalfinancialcontrolsoverfinancialreportingoftheCompanyandtheoperatingeffectivenessofsuchcontrols,refertoourseparateReportin“AnnexureB”.
g) WithrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:
i. TheCompanydoesnothaveanypendinglitigationswhichwouldhaveimpactitsfinancialpositioninitsstandaloneIndASfinancialstatements;
ii. TheCompanyhasmadeprovision,asrequiredundertheapplicablelaworaccountingstandards,formaterialforeseeablelosses,ifany,onlong-termcontractsincludingderivativecontracts;
iii. Duringtheyeartherehasbeennodelayintransferringamounts,requiredtobetransferred,totheInvestorEducationandProtectionFundbytheCompany.
For, J. T. Shah & Co.Chartered Accountants,
[Firm Regd. No- 109616W]
(J. T. Shah)Place : Ahmedabad PartnerDate : 30/05/2018 [M.No.3983]
Annexure “A”To the Independent Auditors’ Report of even date on the Standalone Financial Statements of Lincoln Parenteral Limited
Referredtoinparagraph6(1)ofourReportofevendatetotheMembersofLincoln Parenteral Limited fortheyearended31st March, 2018.
1. In respect of Fixed Assets:
(a) TheCompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationofFixedAssetsonthebasisofavailableinformation.
(b) Asper the informationandexplanationsgiven tous, themanagementat reasonable intervalsduring theyear inaccordancewithaprogrammeofphysicalverificationphysicallyverifiedthefixedassetsandnomaterialdiscrepancieswerenoticedonsuchverificationascomparedtotheavailablerecords.
(c) Asexplainedtous,thetitledeedsofalltheimmovablepropertiesareheldinthenameoftheCompany’sname.
2. In respect of Inventories :
As per the information and explanations given to us, inventorieswere physically verified during the year by themanagement atreasonableintervals.Nomaterialdiscrepancywasnoticedonsuchphysicalverification.
3. In respect of Loans granted during the year:
As regards the loans , the company has not granted any loans , secured or unsecured during the year under audit, to the companies, firms,LimitedLiabilityPartnershiporotherpartiescoveredintheregistermaintainedundersection189ofthecompaniesAct,2013andtherefore,theclauses(iii)(a)to(c)ofthecompanies(Auditor’sReport)Order,2016arenotapplicable.
4. Loans, Investments and guarantees:
Accordingtotheinformationandexplanationgiventous,thecompanyhadneithergivenanyloan,guaranteeorsecurity,normadeanyinvestmentsduringtheyear.Hencetheprovisionsofsection185and186arenotapplicable.Thereforeclauses(iv)ofcompanies(Auditor’sReport)Order,2016isnotapplicable.
5. Acceptance of Deposits:
Duringtheyear,theCompanyhasnotacceptedanydepositsandhencethedirectivesissuedbytheReserveBankofIndiaandtheprovisionsofsections73to76oranyotherrelevantprovisionsoftheCompaniesAct,2013andtherulesframedthereunderarenotapplicabletotheCompany.Thereforeclauses(v)ofCompanies(Auditor’sReport)Order,2016isnotapplicable.
20 Annual Report 2017-2018
6. Cost Records:
WehavebroadlyreviewedthebooksofaccountmaintainedbytheCompanypursuanttotheCompanies(CostAccountingRecords)Rule,2011prescribedbytheCentralGovernmentundersubsection(1)ofsection148oftheCompaniesAct,2013.However,wehavenotmadeadetailedexaminationofthecostrecordswithaviewtodeterminewhethertheyareaccurateorcomplete.
7. In respect of Statutory Dues :
(a) According to the records of the Company, the Company is by and large regular in depositing with appropriate authoritiesundisputedstatutoryduesincludingprovidentfund,employees’stateinsurance,incometax,Valueaddedtax,CentralSalesTax,GoodsandServiceTax, service tax,dutyof customs,dutyof excise, cess andanyother statutorydueswith theappropriateauthoritiesapplicabletoit.Accordingtotheinformationandexplanationsgiventous,noundisputedamountspayableinrespectofstatutorydueswereoutstandingasat31stMarch,2018 foraperiodofmorethansixmonths fromthedatetheybecamepayable.
(b) Accordingtotherecordsofthecompany,therearenoduesofincometax,valueaddedtax,wealthtaxorservicetaxordutyofcustomsordutyofexciseorvalueaddedtaxwhichhavenotbeendepositedonaccountofdispute.
8. Basedonourauditprocedureandaccordingtotheinformationandexplanationgiventous,weareoftheopinionthattheCompanyhasnotdefaultedinrepaymentofduestoBanksorGovernment.TheCompanyhasnodebentureholderborrowingduringtheyear.
9. Accordingtotheinformationandexplanationsgiventous,theCompanyhadnotraisedanymoneybywayofpublicissueduringtheyear.AccordingtotheinformationandexplanationsgiventousandonanoverallexaminationofthebalancesheetoftheCompany,inouropinion,thetermloanstakenduringtheyearwereappliedforthepurposeforwhichtheywereobtained.
10. Basedupontheauditproceduresperformedandinformationandexplanationsgivenbythemanagement,wereportthatnofraudbytheCompanyoranyfraudontheCompanybyit’sofficeroremployeeshasbeennoticedorreportedduringthecourseofouraudit.
11. Inouropinionandaccordingtotheinformationandexplanationsgiventous,theCompanyhadpaidmanagerialremunerationwhichisinaccordancewiththerequisiteapprovalsmandatedbytheprovisionsofsection197readwithscheduleVofTheCompaniesAct,2013.
12. Inouropinionandaccordingtotheinformationandexplanationsgiventous,theprovisionsofspecialstatuteapplicabletochitfundsandnidhi/mutualbenefitfunds/societiesarenotapplicabletotheCompany.Hence,paragraph3(xii)oftheCompany’s(Auditor’sReport)Order,2016isnotapplicable.
13. Inouropinionandaccordingtotheinformationandexplanationsgiventous,thetransactionsenteredbytheCompanywithrelatedpartiesare incompliancewiththeprovisionsofsection177and188oftheCompaniesAct,2013anddetailsthereofareproperlydisclosedinthefinancialstatementsasrequiredbytheapplicableaccountingstandard.
14. Thecompanyhasnotmadeanypreferentialallotmentorprivateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyearunderreview.Hence,clause(xiv)oftheCompany’s(Auditor’sReport)Order,2016isnotapplicable.
15. TheCompanyhadnotentered in toanynon-cashtransactionswiththedirectorsorpersonsconnectedwithhimduringtheyear,hencesection192oftheCompaniesAct,2013isnotApplicable,henceclause(xv)ofCompany’s(Auditor’sReport)Order,2016isnotapplicable.
16. AstheCompanyisnotrequiredtoregisterundersection45-IAofReserveBankofIndiaAct,1934,hence,clause(xvi)ofCompany’s(Auditor’sReport)Order,2016isnotapplicable.
For, J. T. Shah & Co.Chartered Accountants,
[Firm Regd. No- 109616W]
(J. T. Shah)Place : Ahmedabad PartnerDate : 30/05/2018 [M.No.3983]
21Annual Report 2017-2018
Annexure “B”To the Independent Auditors’ Report of even date on the Standalone Financial Statements of Lincoln Parenteral Limited
ReportontheInternalFinancialControlsunderClause(i)ofSub-section3ofSection143oftheCompaniesAct,2013(“theAct”)
WehaveauditedtheinternalfinancialcontrolsoverfinancialreportingofLincoln Parenteral Limitedasof31st March, 2018,inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.
Management’s Responsibility for Internal Financial Controls
TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrolsbasedontheinternalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditof Internal FinancialControlsOver FinancialReporting issuedby the InstituteofCharteredAccountantsof India. Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecordsandthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.
Auditors’ Responsibility
Ourresponsibility istoexpressanopinionontheCompany’s internalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsandbothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls systemoverfinancial reportingandtheiroperatingeffectiveness.Ourauditof internalfinancial controlsoverfinancial reporting includedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweaknessexistsandtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.
WebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.
MeaningofInternalFinancialControlsoverFinancialReporting
Acompany’sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’s internalfinancialcontroloverfinancial reporting includesthosepoliciesandproceduresthat (1)Pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)Providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciplesandthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompanyand(3)Providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,useordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.
InherentLimitationsofInternalFinancialControlsoverFinancialReporting
Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditionsorthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.
Opinion
Inouropinion,theCompanyhas,inallmaterialrespects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancial reportingwereoperatingeffectivelyasat31stMarch2018,basedonthe internalcontroloverfinancialreportingcriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.
For, J. T. Shah & Co.Chartered Accountants,
[Firm Regd. No- 109616W]
(J. T. Shah)Place : Ahmedabad PartnerDate : 30/05/2018 [M.No.3983]
22 Annual Report 2017-2018
BALANCE SHEET AS AT MARCH 31, 2018Particulars Note
No.As at
March 31, 2018 `
As at March 31, 2017
`
As at April 1, 2016
` A ASSETS
1 Non-current assets (a) Property,PlantandEquipment 5 244,022,785 254,134,356 260,840,214(b) Financial Assets
(i) Investments 6 22,400 22,400 22,400(ii) Loans 7 9,676,560 8,023,725 181,593,819
(c) Othernon-currentassets 8 6,779,949 1,366,944 4,338,359 Total Non - Current Assets 260,501,694 263,547,425 446,794,792 2 Current assets
(a) Inventories 9 89,636,470 54,343,328 28,140,169(b) Financial Assets
(i) Investments Nil Nil Nil(ii) Trade receivables 10 125,108,993 105,943,181 14,416,156(iii) Cashandcashequivalents 11 182,520 916,957 1,821,301(iv) Otherbankbalances 12 40,949,703 61,072,849 70,682,076(v) Loans 13 188,544 2,693,556 243,500(vi) Otherfinancialassets 14 20,596 Nil 2,121,901
(c) CurrentTaxAssets(Net) 15 Nil 3,162,384 Nil(d) Othercurrentassets 16 131,074,678 136,595,475 14,586,602
Total Current Assets 387,161,504 364,727,730 132,011,705Total Assets (1+2) 647,663,198 628,275,155 578,806,497 B EQUITY AND LIABILITIES
1 Equity (a) EquitySharecapital 17 100,000,000 100,000,000 100,000,000(b) OtherEquity 18 114,006,512 94,817,867 87,492,734
Total equity 214,006,512 194,817,867 187,492,734LIABILITIES
2 Non-currentliabilities(a) FinancialLiabilities
(i) Borrowings 19 7,942,433 52,727,268 107,884,890(ii) Otherfinancialliabilities 20 144,892,903 134,784,095 125,380,554
(b) Deferredtaxliabilities(Net) 21 13,364,612 8,767,248 5,783,838TotalNon-CurrentLiabilities 166,199,948 196,278,611 239,049,282 3 Currentliabilities
(a) FinancialLiabilities(i) Borrowings 22 Nil 9,165,711 25,621,509(ii) Trade payables 23 79,299,330 70,685,372 67,754,649(iii) Otherfinancialliabilities 24 50,391,333 59,745,781 52,458,792
(b) Othercurrentliabilities 25 131,966,075 96,858,959 2,111,950(c) CurrentTaxLiabilities(Net) 26 5,800,000 722,854 4,317,581
TotalCurrentLiabilities 267,456,738 237,178,677 152,264,481TotalEquityandLiabilities(1+2+3) 647,663,198 628,275,155 578,806,497 SummaryofSignificantAcountingPolicies 4AsperourreportofevendateattachedherewithFor J.T. Shah & Co.Chartered Accountants(Firm Regd. No. 109616W)
(J.T.SHAH)Partner (M.No.3983)
Place :AhmedabadDate :30/05/2018
For, Lincoln Parenteral Limited
Anand Patel (WholeTimeDirector) (DIN:00103316)
Mahesh Patel (Director) (DIN:00103239)
Bhavik P. Parikh (Company Secretary)
Place :AhmedabadDate :30/05/2018
23Annual Report 2017-2018
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018
Particulars Note No. Year endedMarch 31, 2018
`
Year endedMarch 31, 2017
`
I Revenuefromoperations 27 712,435,703 634,896,074
II OtherIncome 28 8,089,525 13,900,885
III Total Income (I + II ) 720,525,228 648,796,959
IV EXPENSES
(a) Costofmaterialsconsumed 29 301,673,554 206,420,628
(b) Purchasesofstock-in-trade 299,580,143 309,411,946
(c) Changesininventoriesoffinishedgoods,stock-in-tradeandwork-in-progress 30 (37,260,117) (4,758,472)
(d) Exciseduty 4,651,397 13,050,922
(e) Employeebenefitexpense 31 36,397,450 25,397,647
(f) Finance costs 32 22,637,500 22,918,964
(g) Depreciationandamortisationexpense 33 17,125,075 16,631,772
(h) Otherexpenses 34 44,349,868 44,230,929
Total Expenses 689,154,870 633,304,336
V Profit/(loss)beforetax(III-IV) 31,370,358 15,492,623
VI Tax Expense
(a) Currenttax 35 7,686,103 5,210,616
(b) Deferredtax 35 4,563,721 2,974,636
Total tax expense 12,249,824 8,185,252
VII Profit/(loss)fortheyear(V-VI) 19,120,534 7,307,370
VIII Other Comprehensive Income
A (i) Itemsthatwillnotbereclassifiedtoprofitorloss
Remeasurementsofthedefinedbenefitplans 36 101,755 26,535
(ii) Incometaxrelatingtoitemsthatwillnotbereclassifiedtoprofitorloss 36 (33,643) (8,773)
Total Other Comprehensive Income 68,112 17,762
IX Total comprehensive income for the year (VII+VIII) 19,188,646 7,325,132
X Basic & diluted earnings per share of face value of `10 each Fully Paid up
(1) Basic 1.91 0.73
(2) Diluted 1.91 0.73
AsperourreportofevendateattachedherewithFor J.T. Shah & Co.Chartered Accountants(Firm Regd. No. 109616W)
(J.T.SHAH)Partner (M.No.3983)
Place :AhmedabadDate :30/05/2018
For, Lincoln Parenteral Limited
Anand Patel (WholeTimeDirector) (DIN:00103316)
Mahesh Patel (Director) (DIN:00103239)
Bhavik P. Parikh (Company Secretary)
Place :AhmedabadDate :30/05/2018
24 Annual Report 2017-2018
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Cashflowfromoperatingactivities
Profitbeforetax 31,370,358 15,492,623
Adjustments for :
Depreciationandamortisationexpense 17,125,075 16,631,772
Provisionforexpectedcreditloss 1,591,921 765,987
Finance costs 22,637,500 22,918,964
MTMgain/lossonfairvaluationofderivativefinancialinstruments (887,356) 1,397,414
Interest income (3,881,646) (13,899,193)
Operatingprofitbeforeworkingcapitalchanges 67,955,852 43,307,567
Changesinoperatingassetsandliabilities:
(Increase)/Decreaseininventories (35,293,142) (26,203,159)
(Increase)/Decreaseintradereceivables (20,757,733) (92,293,012)
(Increase)/Decreaseinotherbankbalance 20,123,146 9,609,227
(Increase)/Decreaseinloans(currentfinancialasset) 2,505,012 (2,450,056)
(Increase)/Decreaseinothercurrentassets 4,541,336 (123,063,557)
Increase/(Decrease)intradepayable 8,613,955 2,930,725
Increase/(Decrease)inothercurrentfinancialliabitlies (1,173,427) 907,939
Increase/(Decrease)inothercurrentliabitlies 35,107,116 94,747,009
Cashflowgeneratedfromoperations 81,622,114 (92,507,317)
DirecttaxesPaid(net) (5,579,838) (8,373,368)
NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (A) 76,042,276 (100,880,685)
Cashflowsfrominvestingactivities
Purchaseofproperty,plantandequipments (6,546,496) (10,064,296)
Interest received 3,881,646 13,899,193
Proceedsfromnon-currentloans(financialassets) (1,652,835) 173,570,094
NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES (B) (4,317,685) 177,404,991
25Annual Report 2017-2018
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Cashflowsfromfinancingactivities
Finance costs paid (10,446,339) (16,924,100)
Repaymentofshort-termborrowings (9,165,711) (16,455,798)
Repaymentoflong-termborrowings (52,846,978) (44,048,752)
NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES (C) (72,459,028) (77,428,650)
NET INCREASED / (DECREASED) IN CASH AND CASH EQUIVALENTS (A + B + C) (734,437) (904,344)
Cashandcashequivalentsatthebeginningoftheyear 916,957 1,821,301
Cash and cash equivalents at the end of the year 182,520 916,957
Notes:
(i) Theabovecashflowstatementhasbeenpreparedunderthe“IndirectMethod”assetoutintheIndianAccountingStandard-7CashFlowStatementsspecifiedunderSection133oftheCompaniesAct,2013,readwithRule7oftheCompanies(Accounts)Rules,2014.
(ii) PreviousPeriod’s/Year’sfigureshavebeenre-grouped/Re-Classifiedwherenecessarytomakeitcomparablewiththecurrentperiod.
(iii) Componentsofcashandcashequivalentsateachbalancesheetdate:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Cash on hand 178,049 916,883 998,065
BalanceswithBank-InCurrentAccount 4,471 74 823,236
Total Cash and cash equivalents (Refer Note 11) 182,520 916,957 1,821,301
See accompanying notes forming part of the Financial Statements
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018
AsperourreportofevendateattachedherewithFor J.T. Shah & Co.Chartered Accountants(Firm Regd. No. 109616W)
(J.T.SHAH)Partner (M.No.3983)
Place :AhmedabadDate :30/05/2018
For, Lincoln Parenteral Limited
Anand Patel (WholeTimeDirector) (DIN:00103316)
Mahesh Patel (Director) (DIN:00103239)
Bhavik P. Parikh (Company Secretary)
Place :AhmedabadDate :30/05/2018
26 Annual Report 2017-2018
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON MARCH 31, 2018
Equity Share Capital
Particulars Note No.
Amount `
Balanceason1stApril,2016 17 100,000,000
Changes during the year Nil
Balance as on 31st March, 2017 17 100,000,000
Changes during the year Nil
Balance as on 31st March, 2018 17 100,000,000
Other Equity Amount in `
Particulars Note No.
Reserves and Surplus Capital Reserve
Total
Retained Earnings General ReserveProfitand
Loss Other
Comprehensive Income
EquityPortionof Financial
Instruments
Balance as at 1st April, 2016 18 21,471,664 27,255 57,592,792 8,250,000 151,023 87,492,734
Profitfortheyear 7,307,370 Nil Nil Nil Nil 7,307,370
Othercomprehensiveincomefortheyear(netofTax)
Nil 17,762 Nil Nil Nil 17,762
Balance as at 31st March, 2017 18 28,779,034 45,018 57,592,792 8,250,000 151,023 94,817,867
Profitfortheyear 19,120,534 Nil Nil Nil Nil 19,120,534
Othercomprehensiveincomefortheyear(netofTax)
Nil 68,112 Nil Nil Nil 68,112
Balance as at 31st March, 2018 18 47,899,567 113,130 57,592,792 8,250,000 151,023 114,006,512
AsperourreportofevendateattachedherewithFor J.T. Shah & Co.Chartered Accountants(Firm Regd. No. 109616W)
(J.T.SHAH)Partner (M.No.3983)
Place :AhmedabadDate :30/05/2018
For, Lincoln Parenteral Limited
Anand Patel (WholeTimeDirector) (DIN:00103316)
Mahesh Patel (Director) (DIN:00103239)
Bhavik P. Parikh (Company Secretary)
Place :AhmedabadDate :30/05/2018
27Annual Report 2017-2018
NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 2018
1. Corporateinformation:
LincolnParenteralLimited(“theCompany”)wasincorporatedonMay17,1991undertheprovisionsoftheCompaniesAct,1956;havingregisteredofficeatAhmedabad,Gujarat,India.ItisasubsidiaryofLincolnPharmaceuticalLimitedandismainlyinthebusinessofmanufacturingandtradingofpharmaceuticalproducts.TheCompanyhasmanufacturingplantlocatedinstateofGujarat.
ThefinancialstatementsareapprovedforissuebytheCompany’sBoardofDirectorsonMay30,2018.
2. Statement of compliance:
ThefinancialstatementshavebeenpreparedinaccordancewithIndASnotifiedundertheCompanies(IndianAccountingStandards)Rules,2015asamendedreadwithSection133oftheCompaniesAct,2013.
UptotheyearendedMarch31,2017,theCompanyprepareditsfinancialstatementsinaccordancewiththeaccountingstandardsnotifiedundersection133oftheCompaniesAct2013,readtogetherwithrulesthereunder(‘IndianGAAP’or‘previousGAAP’).ThecurrentfinancialstatementscomprisingofBalanceSheet,StatementofProfitandLoss,StatementofChangesinEquityandStatementofCashFlowsasatMarch31,2018havebeenpreparedinaccordancewithIndianAccountingStandards(‘IndAS’)asprescribedunderSection133oftheCompaniesAct,2013readwithRule3oftheCompanies(IndianAccountingStandards)Rules,2015andCompanies(IndianAccountingStandards)AmendmentRules,2016.ThesearetheCompany’sfirstIndASfinancialstatements.ThedateoftransitiontoIndASisApril1,2016.PreviousperiodnumbersinthefinancialstatementshavebeenrestatedtoIndAS.ReferNote46foranexplanationofthetransitionfrompreviousGAAPtoIndAS.
3. Basisofpreparation:
ThefinancialstatementshavebeenpreparedonaccrualbasisofaccountingunderhistoricalcostconventioninaccordancewithgenerallyacceptedaccountingprinciplesinIndiaandtherelevantprovisionsoftheCompaniesAct,2013includingIndianAccountingStandardsnotified thereunder, except for the followingwhere the fair valuationhavebeen carriedout in accordancewith therequirementsofrespectiveIndAS:
a. Employeedefinedbenefitplans–Planassets-NoteNo.39.
b. FinancialInstrumentsrecogniedatFVTPLorFVTOCI-NoteNo.41.
Historicalcostisgenerallybasedonthefairvalueoftheconsiderationgiveninexchangeforgoodsandservices.
Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,regardlessofwhetherthatpriceisdirectlyobservableorestimatedusinganothervaluationtechnique.Inestimatingthefairvalueofanassetoraliability,theCompanytakesintoaccountthecharacteristicsoftheassetorliabilityifmarketparticipantswouldtakethosecharacteristicsintoaccountwhenpricingtheassetorliabilityatthemeasurementdate.
4. Summaryofsignificantaccountingpolicies:
i) Useofestimates:
The preparation of these financial statements in conformitywith the recognition andmeasurement principles of Ind ASrequiresthemanagementoftheCompanytomakeestimatesandassumptionsthataffectthereportedbalancesofassetsandliabilities,disclosuresrelatingtocontingentliabilitiesasatthedateofthefinancialstatementsandthereportedamountsofincomeandexpensefortheperiodspresented.Theestimatesandassumptionsusedintheaccompanyingfinancialstatementsarebaseduponmanagement’sevaluationof relevant factsandcircumstancesasat thedateof thefinancial statements.Managementbelievesthattheestimatesusedinthepreparationoffinancialstatementsareprudentandreasonable.Actualresultscoulddifferfromestimates.
Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimatesarerevisedandfutureperiodsareaffected.
Keysourceofestimationofuncertaintyatthedateofthefinancialstatements,whichmaycauseamaterialadjustmenttothecarryingamountsofassetsandliabilitiesincomingfinancialyearsarespecifiedhere-in-after:
Useful lives of property, plant and equipment
The Company is providing depreciation at the rates derived based on the useful life specified under Schedule-II to theCompaniesAct,2013.TheCompanyreviewstheuseful lifeofproperty,plantandequipmentattheendofeachreportingperiod.Thisreassessmentmayresultinchangeindepreciationexpenseinfutureperiods.
Provisions and contingent liabilities
Aprovision isrecognisedwhentheCompanyhasapresentobligationasaresultofpasteventand it isprobablethananoutflowofresourceswillberequiredtosettletheobligation,inrespectofwhichthereliableestimatecanbemade.Provisions(excludingretirementbenefits)arenotdiscountedtoitspresentvalueandaredeterminedbasedonbestestimaterequiredto
28 Annual Report 2017-2018
settletheobligationatthebalancesheetdate.Thesearereviewedateachbalancesheetdate,adjustedtoreflectthecurrentbestestimates.Contingentliabilitiesarenotrecognisedinthefinancialstatements.Acontingentassetisneitherrecognisednordisclosedinthefinancialstatements
Major provisions recognized in financial statement and related accounting policy are specified as under:
Measurementofdefinedbenefitobligations-ReferNote4(xiv),16,and39Current/Deferredtaxliabilities-ReferNote4(xv),21and35Allowancesforexpectedcreditlosses-ReferNote4(xi)and10.
Other estimates:
The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets,liabilities,disclosureofcontingent liabilitiesatthedateoffinancialstatementsandthereportedamountofrevenuesandexpensesforthereportingperiod.Specifically,theCompanyestimatestheprobabilityofcollectionofaccountsreceivablebyanalyzinghistoricalpaymentpatterns,customerconcentrations,customercredit-worthinessandcurrenteconomictrends.Ifthefinancialconditionofacustomerdeteriorates,additionalallowancesmayberequired.
ii) Revenuerecognition:
Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.Amountsdisclosedasrevenueareinclusiveofexcisedutyandnetofcustomers’return,tradediscounts,rebates,valueaddedtaxes,goods&servicetaxesandanyotherclaimsinrespectofsale.
Sale of Goods
Revenuefromthesaleofgoods is recognisedwhenthegoodsaredeliveredandtitleshavepassed,atwhichtimeall thefollowingconditionsaresatisfied:
• theCompanyhastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods;
• theCompanyretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontroloverthegoodssold;
• theamountofrevenuecanbemeasuredreliably;
• itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheCompanyand
• thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.
Interest income
InterestincomefromafinancialassetisrecognisedwhenitisprobablethattheeconomicbenefitswillflowtotheCompanyandtheamountofincomecanbemeasuredreliably.Interestincomeisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheeffectiveinterestrateapplicable,whichistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialassettothatasset’snetcarryingamountoninitialrecognition.
Other Operating revenue:
Exportentitlementsarerecognizedwhentherighttoreceivethecreditsasperthetermsoftheschemeisestablished inrespectofexportsmadebythecompanyandwhenthereisnosignificantuncertaintyinreceivingthesame.
iii) Property, Plant & Equipment:
Property, Plant & Equipment
Freehold land is carried at historical cost. All other Property, Plant and Equipments are stated at cost less accumulateddepreciationandaccumulatedimpairmentlosses.Costincludesexpenditurethatisdirectlyattributabletogettingtheassetreadyforintendeduse.Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtothecompanyandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthereportingperiodinwhichtheyareincurred.
Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedtoarisefromthecontinueduseoftheasset.Anygainorlossarisingonthedisposalorretirementofanitemofproperty,plantandequipmentisdeterminedasthedifferencebetweenthesalesproceedsandthecarryingamountoftheassetandisrecognisedinprofitorloss.
Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduse,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduse.
Capital Work-in-progress
Properties inthecourseofconstruction(CWIP) forproduction,supplyoradministrativepurposesarecarriedatcost, lessany recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in
29Annual Report 2017-2018
accordancewiththeCompany’saccountingpolicy.Suchpropertiesareclassifiedtotheappropriatecategoriesofproperty,plantandequipmentwhencompletedandreadyforintendeduse.Depreciationoftheseassets,onthesamebasisasotherpropertyassets,commenceswhentheassetsarereadyfortheirintendeduse.
Transition to Ind-AS:
FortransitiontoIndAS,theCompanyhaselectedtocontinuewiththecarryingvalueofallofitsproperty,plantandequipmentrecognisedasofApril1,2016(transitiondate)measuredasperthepreviousGAAPandusethatcarryingvalueasitsdeemedcostasofthetransitiondate.
iv) DepreciationonProperty,Plant&Equipment:
Depreciationisrecognisedsoastowriteoffthecostofassets(otherthanfreeholdlandandpropertiesunderconstruction)lesstheirresidualvaluesovertheirusefullives,usingthestraight-linemethod.Theestimatedusefullives,residualvaluesanddepreciationmethodarereviewedattheendofeachreportingperiod,withtheeffectofanychangesinestimateaccountedforonaprospectivebasis.
Depreciableamountforassetsisthecostofanasset,orotheramountsubstitutedforcost,lessitsestimatedresidualvalue.Depreciationontangibleproperty,plantandequipmentisprovidedovertheusefullivesspecifiedunderScheduleIItotheCompaniesAct,2013.
Theestimatedusefullivesarementionedbelow:
Nature of Assets Useful life (in Years)
Land(FreeHold) Nil
Buildings 30
Plant&Machinery 15
Computers 3
ElectricalInstallation 10
FactoryEquipment 15
Vehicle 15
Furniture&Fixtures 10
v) IntangibleAssetsandAmortization:
Intangibleassetspurchasedaremeasuredatcostorfairvalueasonthedateofacquisition,asapplicable,lessaccumulatedamortisationandaccumulatedimpairment,ifany.
Intangibleassetsareamortisedonastraightlinebasisovertheirestimatedusefullives,commencingfromthedatetheassetisavailabletotheCompanyforitsintendeduse.
Followinginitialrecognition,intangibleassetsarecarriedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised andexpenditureisreflectedintheStatementofProfitandLossintheyearinwhichtheexpenditureisincurred.
Theestimatedusefullifeoftheintangibleassetsandtheamortisationperiodarereviewedattheendofeachfinancialyearandtheamortisationperiodisrevisedtoreflectthechangedpattern,ifany.
vi) Impairment of Property, Plant & Equipment and intangible assets :
At theendofeach reportingperiod, theCompany reviews the carryingamountsof itsProperty,Plant&Equipmentandintangibleassetstodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany).Whenitisnotpossibletoestimatetherecoverableamountofanindividualasset,theCompanyestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.Whenareasonableandconsistentbasisofallocationcanbeidentified,corporateassetsarealsoallocatedtoindividualcash-generatingunitsorotherwisetheyareallocatedtothesmallestgroupofcash-generatingunitsforwhichareasonableandconsistentallocationbasiscanbeidentified.
Intangibleassetswithindefiniteusefullivesandintangibleassetsnotyetavailableforusearetestedforimpairmentatleastannually,andwheneverthereisanindicationthattheassetmaybeimpaired.
Recoverableamountisthehigheroffairvaluelesscostsofdisposalandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesoffuturecashflowshavenotbeenadjusted.
Carryingamountequalstocostlessaccumulateddepreciationandaccumulatedimpairmentlossesrecognisedpreviously.
30 Annual Report 2017-2018
Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,thecarryingamount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognisedimmediatelyinprofitorloss.
vii) BorrowingCosts:
Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.
Interestincomeearnedonthetemporaryinvestmentofspecificborrowingspendingtheirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.
Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.
viii) Inventories:
Raw Materials, Packing Materials, Stores and Spares
RawMaterials,PackingMaterials,Stores&Sparesandconsumablesarevaluedatlowerofcost(netofrefundabletaxesandduties)andnetrealisablevalue.ThecostoftheseitemsofinventoryaredeterminedonFIFObasisandcomprisesofcostofpurchaseandotherincidentalcostsincurredtobringtheinventoriestotheirlocationandcondition.Materialsandotheritemsheldforuseintheproductionofinventoriesarenotwrittendownbelowcostifthefinishedproductsinwhichtheywillbeincorporatedareexpectedtobesoldatorabovecost.
Finished Goods and Work-in-progress
Work-in-progressandfinishedgoodsarevaluedatlowerofcostandnetrealisatblevalue.Thecostofwork-in-progressandfinishedgoodsofinventoryisdeterminedonweightedaveragebasis.Thecostofwork-in-progressandfinishedgoodsincludescostofcoversionandothercosts incurredtobringtheinventoriestotheirpresent locationandcondition.Obsolete,slowmovinganddefectiveinventoriesareidentifiedandprovidedfor.
Stock in Trade
StockinTradeisvaluedatlowerofcostandnetrealisablevalue.CostisdeterminedonFIFObasis.
ix) Leases:
Inrespectofassetstakenonlease,leasesareclassifiedasfinanceleaseswheneverthetermsoftheleasetransfersubstantiallyalltherisksandrewardsincidentaltotheownershipofanassettotheCompany.Allotherleasesareclassifiedasoperatingleases.
Operatingleasepaymentsforlandsarerecognizedasprepaymentsandamortisedonastraight-linebasisoverthetermofthelease.Contingentrentals,ifany,arisingunderoperatingleasesarerecognisedasanexpenseintheperiodinwhichtheyareincurred.
x) Government Grants and Subsidies:
GovernmentgrantsarenotrecogniseduntilthereisreasonableassurancethattheCompanywillcomplywiththeconditionsattachingtothemandthatthegrantswillbereceived.
GovernmentgrantsarerecognisedinprofitorlossonasystematicbasisovertheperiodsinwhichtheCompanyrecognisesasexpensestherelatedcostsforwhichthegrantsareintendedtocompensate.Specifically,governmentgrantswhoseprimaryconditionisthattheCompanyshouldpurchase,constructorotherwiseacquirenon-currentassetsarerecognisedasdeferredrevenueinthebalancesheetandtransferredtoprofitorlossonasystematicandrationalbasisovertheusefullivesoftherelatedassets.
GovernmentgrantsthatarereceivableascompensationforexpensesorlossesalreadyincurredorforthepurposeofgivingimmediatefinancialsupporttotheCompanywithnofuturerelatedcostsarerecognisedinprofitorlossintheperiodinwhichtheybecomereceivable.
Thebenefitof a government loanat abelow-market rateof interest is treatedas a government grant,measuredas thedifferencebetweenproceedsreceivedandthefairvalueoftheloanbasedonprevailingmarketinterestrates.
xi) Financial Instruments:
Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.
Financial Assets
a. Initialrecognitionandmeasurement
Atinitialrecognition,theCompanymeasuresafinancialasset(whicharenotmeasuredatfairvalue)throughprofitorlossatitsfairvalueplusorminustransactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialasset.
31Annual Report 2017-2018
b. Subsequentmeasurement
Forpurposesofsubsequentmeasurement,financialassetsareclassifiedinfollowingcategories:
i) Financialassetsmeasuredatamortisedcost;
ii) Financialassetsatfairvaluethroughprofitorloss(FVTPL)and
iii) Financialassetsatfairvaluethroughothercomprehensiveincome(FVTOCI).
TheCompanyclassifiesitsfinancialassetsintheabovementionedcategoriesbasedon:
a) TheCompany’sbusinessmodelformanagingthefinancialassetsand
b) Thecontractualcashflowscharacteristicsofthefinancialasset.
i) Financialassetsmeasuredatamortisedcost:
Afinancialassetismeasuredatamortisedcostifbothofthefollowingconditionsaremet:
a) AfinancialassetismeasuredatamortisedcostifthefinancialassetisheldwithinabusinessmodelwhoseobjectiveistoholdfinancialassetsinordertocollectcontractualcashflowsandtheContractualtermsofthefinancialassetsgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterest(SPPI)ontheprincipalamountoutstanding.
b) Financial assets are subsequently measured at amortised cost using the effective interest rate (EIR)method.AmortisedcostiscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionandfeesorcoststhatareanintegralpartoftheEIR.TheEIRamortisationisincludedinfinanceincomeintheprofitorloss.Thelossesarisingfromimpairmentarerecognisedintheprofitorloss.
ii) Financialassetsatfairvaluethroughprofitorloss(FVTPL):
Financialassetsaremeasuredatfairvaluethroughprofitandlossunlessitismeasuredatamortisedcostoratfairvaluethroughothercomprehensiveincomeoninitialrecognition.Thetransactioncostsdirectlyattributabletotheacquisitionoffinancialassetsandliabilitiesatfairvaluethroughprofitorlossareimmediatelyrecognizedinprofitorloss.
iii) Financialassetsatfairvaluethroughothercomprehensiveincome(FVTOCI):
Financialassetsaremeasuredatfairvaluethroughothercomprehensiveincomeifthesefinancialassetsareheldwithinabusinessmodelwhoseobjectiveisachievedbycollectingbothcontractualcashflowsthatgivesriseonspecifieddatestosolelypaymentsofprincipalandinterestontheprincipalamountoutstandingandbysellingfinancialassets.
A financial asset ismeasured at fair value throughprofit or loss unless it ismeasured at amortised cost orfairvaluethroughothercomprehensiveincome.Inaddition,TheCompanymayelecttodesignateafinancialasset,whichotherwisemeetsamortisedcostorFVTOCIcriteria,asatFVTPL.However,suchelectionisallowedonlyifdoingsoreducesoreliminatesameasurementorrecognitioninconsistency(referredtoas‘accountingmismatch’)
Tradereceivables,Advances,SecurityDeposits,CashandCashEquivalentsetc.areclassifiedformeasurementatamortisedcost.
c. Derecognition
TheCompanyderecognizesafinancialassetwhencontractualrightstothecashflowsfromtheassetexpireorwhenittransfersthefinancialassetandsubstantiallyalltherisksandrewardsofownershipoftheassettoanotherparty.
Onderecognitionofafinancialassetinitsentirety,thedifferencebetweentheassets’scarryingamountandthesumoftheconsiderationreceivedandreceivableisrecognizedintheStatementofProfitandLoss.
d. Impairment
TheCompanyappliesexpectedcreditlosses(ECL)modelformeasurementandrecognitionoflossallowanceonthefollowing:
i. Tradereceivables,
ii. Financialassetsmeasuredatamortizedcost(otherthantradereceivablesandleasereceivables),
iii. Financialassetsmeasuredatfairvaluethroughothercomprehensiveincome(FVTOCI).
ECListhedifferencebetweenallcontractualcashflowsthatareduetotheCompanyinaccordancewiththecontractandallthecashflowsthattheentityexpectstoreceive(i.e.,allcashshortfalls),discountedattheoriginaleffectiveinterestrate.
32 Annual Report 2017-2018
Incaseoftradereceivables,theCompanyfollowsasimplifiedapproachwhereinanamountequaltolifetimeECLismeasuredandrecognizedaslossallowance.Asapracticalexpedient,theCompanyusesaprovisionmatrixtomeasurelifetimeECLonitsportfoliooftradereceivables.
Incaseofotherassets(listedasiiandiiiabove),theCompanydeterminesiftherehasbeenasignificantincreaseincreditriskofthefinancialassetsinceinitialrecognition.Ifthecreditriskofsuchassetshasnotincreasedsignificantly,anamountequalto12-monthECLismeasuredandrecognizedaslossallowance.However,ifcreditriskhasincreasedsignificantly,anamountequaltolifetimeECLismeasuredandrecognizedaslossallowance.
Subsequently,ifthecreditqualityofthefinancialassetimprovessuchthatthereisnolongerasignificantincreaseincreditrisksinceinitialrecognition,theCompanyrevertstorecognizingimpairmentlossallowancebasedon12-monthECL.
LifetimeECLaretheexpectedcreditlossesresultingfromallpossibledefaulteventsovertheexpectedlifeofafinancialasset.12-monthECLareaportionof the lifetimeECLwhich result fromdefaultevents thatarepossiblewithin12monthsfromthereportingdate.
ECL impairment lossallowance (or reversal) recognizedduring theperiod is recognizedas income/expense in the StatementofProfitandLossunderthehead‘Otherexpenses’.
ECLaremeasuredinamannerthattheyreflectunbiasedandprobabilityweightedamountsdeterminedbyarangeofoutcomes,takingintoaccountthetimevalueofmoneyandotherreasonableinformationavailableasaresultofpastevents,currentconditionsandforecastsoffutureeconomicconditions.
Financial Liabilities
a. Initialrecognitionandmeasurement
Allfinancialliabilitiesarerecognisedinitiallyatfairvalueandsubsequentlycarriedatamortisedcostusingtheeffectiveinterestmethod.
The company’s financial liabilities include trade and other payables, loans and borrowings including bankoverdrafts.
b. Subsequentmeasurement
Themeasurementoffinancialliabilitiesdependsontheirclassification,asdescribedbelow:
i) Financialliabilitiesmeasuredatamortisedcost.
ii) Financialliabilitiesatfairvaluethroughprofitorloss.
i) Financialliabilitiesmeasuredatamortisedcost:
Allfinancialliabilitiesaremeasuredatamortisedcost.Anydiscountorpremiumonredemption/settlement isrecognisedintheStatementofProfitandLossasfinancecostoverthelifeoftheliability using theeffective interestmethodandadjusted to the liabilityfiguredisclosed in theBalanceSheet.
ii) Financialassetsatfairvaluethroughprofitorloss(FVTPL):
Financial liabilitiesatfairvaluethroughprofitorloss includefinancial liabilitiesheldfortradingand financial liabilities designated upon initial recognition as at fair value through profit orloss.Financial liabilitiesareclassifiedasheldfortrading if theyare incurredforthepurposeofrepurchasinginthenearterm.Gainsorlossesonliabilitiesheldfortradingarerecognisedintheprofitorloss.
Financial liabilities designated upon initial recognition at fair value through profit or loss aredesignated as such at the initial date of recognition and only if the criteria in Ind AS 109 aresatisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes inowncreditriskarerecognizedinOCI.Thesegains/lossarenotsubsequentlytransferredtoP&L.However,thecompanymaytransferthecumulativegainorlosswithinequity.Allotherchangesinfairvalueofsuchliabilityarerecognisedinthestatementofprofitandloss.
c. Derecognition
Financialliabilitiesarederecognisedwhentheliabilityisextinguished,thatis,whenthecontractualobligationisdischargedorcancelledorexpiry.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasthederecognitionoftheoriginalliabilityandtherecognitionofanewliability.Thedifferenceintherespectivecarryingamountsisrecognisedinthestatementofprofitandloss.
33Annual Report 2017-2018
Equity instruments
Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofanentityafterdeductingallofitsliabilities.
Derivative financial instruments
TheCompanyentersintoavarietyofderivativefinancialinstrumentstomanageitsexposuretoforeignexchangeraterisksandinterestraterisks.
Derivativesareinitiallyrecognisedatfairvalueatthedatethederivativecontractsareenteredintoandaresubsequentlyremeasuredtotheirfairvalueattheendofeachreportingperiod.Theresultinggainorlossisrecognisedinprofitorlossimmediatelyunlessthederivativeisdesignatedandeffectiveasahedginginstrument,inwhichthetimingoftherecognitioninprofitorlossdependsonthenatureofthehedgingrelationshipandthenatureofthehedgeditem.
Offsetting of financial instruments
Financialassetsandfinancialliabilitiesareoffsetandthenetamountisreportedinthestandalonebalancesheetifthereisacurrentlyenforceablelegalrighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasis,torealizetheassetsandsettletheliabilitiessimultaneously.
Fair Value Measurement
Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransfera liability inanorderlytransactionbetweenmarketparticipantsatthemeasurementdateundercurrentmarketconditions.
TheCompanycategorizesassetsandliabilitiesmeasuredatfairvalueintooneofthreelevelsdependingontheabilitytoobserveinputsemployedintheirmeasurementwhicharedescribedasfollows:
(a) Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.
(b) Level2 inputsare inputsthatareobservable,eitherdirectlyor indirectly,otherthanquotedprices includedwithinlevel1fortheassetorliability.
(c) Level3inputsareunobservableinputsfortheassetorliabilityreflectingsignificantmodificationstoobservablerelatedmarketdataorCompany’sassumptionsaboutpricingbymarketparticipants.
xii) Cash and cash equivalents
Forthepurposeofpresentationinthestatementofcashflows,cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue,andbankoverdrafts.
xiii) ForeigncurrencyTransactions
ThefunctionalcurrencyofLincolnParenteralLimitedisIndianrupee.
Oninitialrecognition,allforeigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailing on the date of the transaction. As at the reporting date, foreign currencymonetary assets and liabilities aretranslatedattheexchangerateprevailingontheBalanceSheetdateandtheexchangegainsorlossesarerecognisedintheStatementofProfitandLoss
xiv) Employeebenefits
Short term employee benefits
ShortTermbenefitsarerecognisedasanexpenseattheundiscountedamountsintheStatementofProfitandLossoftheyearinwhichtherelatedserviceisrendered.
Post employment benefits
a. Definedcontributionplans
TheEmployeeandCompanymakemonthlyfixedContribution toGovernmentof IndiaEmployee’sProvident Fundequaltoaspecifiedpercentageofthecoveredemployees’salary,Provisionforthesameismadeintheyearinwhichservicearerenderbyemployee.
b. Definedbenefitplans
TheLiabilityforGratuitytoemployees,whichisadefinedbenefitplan,asatBalanceSheetdatedeterminedonthebasisofactuarialValuationbasedonProjectedUnitCreditmethodisfundedtoaGratuityfundadministeredbythetrusteesandmanagedbyLifeInsuranceCorporationofIndiaandthecontributionthereofpaid/payableisabsorbedintheaccounts.
34 Annual Report 2017-2018
Thepresentvalueofthedefinedbenefitobligationsisdeterminedbydiscountingtheestimatedfuturecashflowsbyreferencetomarketyieldsattheendofthereportingperiodongovernmentbondsthathavetermsapproximatingtothetermsoftherelatedobligation.Thenetinterestcostiscalculatedbyapplyingthediscountratetothenetbalanceofthedefinedbenefitobligationandthefairvalueofplanassets.Thiscostisincludedinemployeebenefitexpensesinthestatementofprofitandloss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions arerecognizedintheperiodinwhichtheyoccur,directlyinothercomprehensiveincome.Theyareincludedinretainedearningsinthestatementofchangesinequityandinbalancesheet.Changesinpresentvalueofthedefinedbenefitobligationresultingfromplanamendmentorcurtailmentsarerecognizedimmediatelyinprofitorlossaspastservicecost.
xv) Income Taxes:
Incometaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.
Current tax
Thetaxcurrentlypayable isbasedontaxableprofitfortheyear.Taxableprofitdiffersfrom‘profitbeforetax’asreportedinthestatementofprofitandlossbecauseofitemsofincomeorexpensethataretaxableordeductibleinotheryearsanditemsthatarenevertaxableordeductible.TheCompany’scurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
Deferred tax
Deferredtaxisrecognisedontemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationoftaxableprofit.Deferredtaxliabilitiesaregenerallyrecognisedforalltaxabletemporarydifferences.Deferredtaxassetsaregenerallyrecognisedforalldeductibletemporarydifferencestotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichthosedeductibletemporarydifferencescanbeutilised.Suchdeferredtaxassetsandliabilitiesarenotrecognisedifthetemporarydifferencearisesfromtheinitialrecognition(otherthaninabusinesscombination)ofassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit. Inaddition,deferredtax liabilitiesarenotrecognised if thetemporarydifferencearisesfromtheinitialrecognitionofgoodwill.
Thecarryingamountofdeferredtaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.
DeferredtaxassetsincludeMinimumAlternativeTax(MAT)paidinaccordancewiththetaxlawsinIndia,whichislikelytogivefutureeconomicbenefitsintheformofavailabilityofsetoffagainstfutureincometaxliability.Accordingly,MATisrecognisedasdeferredtaxassetinthebalancesheetwhentheassetcanbemeasuredreliablyanditisprobablethatthefutureeconomicbenefitassociatedwithassetwillberealised.
The Company restricts recognition of deferred tax asset on unabsorbed depreciation to the extent of the correspondingdeferredtaxliabilityinabsenceofavailabilityofsufficientfuturetaxableprofitwhichallowthefullorpartoftheassetstoberecovered.
Deferredtaxliabilitiesandassetsaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
ThemeasurementofdeferredtaxliabilitiesandassetsreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheCompanyexpects,attheendofthereportingperiod,torecoverorsettlethecarryingamountofitsassetsandliabilities.
Current and deferred tax for the period
Current and deferred tax are recognised in profit or loss, exceptwhen they relate to items that are recognised in othercomprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in othercomprehensiveincomeordirectlyinequityrespectively.Wherecurrenttaxordeferredtaxarisesfromtheinitialaccountingforabusinesscombination,thetaxeffectisincludedintheaccountingforthebusinesscombination.
xvi) Provisions:
ProvisionsarerecognisedwhentheCompanyhasapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethattheCompanywillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.
Theamountrecognisedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationattheendofthereportingperiod,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.Whenaprovisionismeasuredusingthecashflowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashflows(whentheeffectofthetimevalueofmoneyismaterial).
35Annual Report 2017-2018
xvii) Earnings per equity share:
Basicearningsperequityshareiscomputedbydividingthenetprofitattributabletotheequityholdersofthecompanybytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.Dilutedearningsperequityshareiscomputedbydividingthenetprofitattributabletotheequityholdersofthecompanyafteradjustingfordilutedearning,bytheweightedaveragenumber of equity shares considered for deriving basic earnings per equity share and also theweighted averagenumberofequityshares thatcouldhavebeen issueduponconversionofalldilutivepotentialequityshares.Thedilutivepotentialequitysharesareadjustedfortheproceedsreceivablehadtheequitysharesbeenactuallyissuedatfairvalue(i.e.theaveragemarketvalueoftheoutstandingequityshares).Dilutivepotentialequitysharesaredeemedconvertedasofthebeginningoftheperiod,unlessissuedatalaterdate.Dilutivepotentialequitysharesaredeterminedindependentlyforeachperiodpresented.
ThenumberofequitysharesandpotentiallydilutiveequitysharesareadjustedretrospectivelyforallperiodspresentedforanysharesplitsandbonussharesissuesincludingforchangeseffectedpriortotheapprovalofthefinancialstatementsbytheBoardofDirectors.
xviii) Dividend:
Finaldividendsonsharesarerecordedasaliabilityonthedateofapprovalbytheshareholdersandinterimdividendsarerecordedasaliabilityonthedateofdeclarationbythecompany’sBoardofDirectors.
xix) Cenvat, Service Tax, Vat & GST:
CENVAT/ServiceTax/VAT/GSTcreditonmaterialspurchasedforproduction/serviceavailedforproduction/inputservicearetakenintoaccountatthetimeofpurchaseandCENVAT/ServiceTax/VAT/GSTcreditonpurchaseofcapitalitemswhereverapplicablearetakenintoaccountasandwhentheassetsareacquired.
TheCENVAT/GSTcreditssotakenareutilizedforpaymentofexciseduty/GSTongoodsmanufactured.TheunutilizedCENVAT/GSTcreditiscarriedforwardinthebooks.TheVAT/GSTcreditssotakenareutilizedforpaymentoftaxongoodssold.TheunutilizedVAT/GSTcreditiscarriedforwardinthebooks.
xx) Segmentreporting
TheChiefOperationalDecisionMaker (CODM)monitors theoperatingresultsof itsbusinessSegmentsseparately for thepurposeofmakingdecisions about resource allocationandperformance assessment. Segmentperformance is evaluatedbasedonprofitorlossandismeasuredconsistentlywithprofitorlossinthefinancialstatements.OperatingsegmentsarereportedinamannerconsistentwiththeinternalreportingtotheCODM.
Accordingly,theBoardofDirectorsoftheCompanyisCODMforthepurposeofsegmentreporting.Refernote40forsegmentinformationpresented.
xxi) StatementofCashflows
Cashflowsarereportedusingtheindirectmethod,wherebyprofit/(loss)beforetaxisadjustedfortheeffectsoftransactionsofnoncashnatureandanydeferralsoraccrualsofpastorfuturecashreceiptsorpayments.Thecashflowsfromoperating,investingandfinancingactivitiesoftheCompanyaresegregatedbasedontheavailableinformation.
xxii) Operatingcycle:
The Operating cycle is the time between the acquisition of assets for processing and their realization in cash and cashequivalents.TheCompanyhasidentifiedtwelvemonthsasitsoperatingcycle.Accordingly,allassetsandliabilitieshavebeenclassifiedascurrentornon-currentaspertheCompany’soperatingcycleandothercriteriasetoutinIndAS1-‘PresentationofFinancialStatements’andScheduleIIItotheCompaniesAct,2013.
36 Annual Report 2017-2018
Not
e 5:
Pr
oper
ty, P
lant
and
Equ
ipm
ent
(Amt.in
`)
Particulars
Land
(F
ree
Hol
d)Bu
ildin
gsPl
ant &
Mac
hine
ryCo
mpu
ters
Furn
itur
e &
Fi
xtur
esTo
tal
Dee
med
Cos
t as
at A
pril
1, 2
016
(Not
e i)
450
,000
8
2,66
2,46
1 1
74,9
45,0
16
16,
037
2,7
66,7
00
260
,840
,214
Add
ition
duringtheyear
Nil
4,987
,146
4,155
,811
Nil
782
,956
9,925
,913
Ded
uctio
ndu
ring
theyear
Nil
Nil
Nil
Nil
Nil
Nil
Gro
ss C
arry
ing
Valu
e as
on
Mar
ch 3
1, 2
017
450
,000
8
7,64
9,60
7 1
79,1
00,8
27
16,
037
3,5
49,6
56
270
,766
,127
Add
ition
duringtheyear
Nil
854
,852
4,431
,548
Nil
1,727
,103
7,013
,502
Ded
uctio
ndu
ring
theyear
Nil
Nil
Nil
Nil
Nil
Nil
Gro
ss C
arry
ing
Valu
e as
on
Mar
ch 3
1, 2
018
450
,000
8
8,50
4,45
9 1
83,5
32,3
75
16,
037
5,2
76,7
59
277
,779
,629
Accum
ulated
dep
reciati
onason
April1,201
6 N
il N
il N
il N
il N
il N
il Add
ition
duringtheyear
Nil
2,850
,042
13,41
5,09
81,331
365
,300
16,63
1,77
1Ded
uctio
ndu
ring
theyear
Nil
Nil
Nil
Nil
Nil
Nil
Accum
ulated
dep
reciati
onason
March31,201
7 N
il 2
,850
,042
1
3,41
5,09
8 1
,331
3
65,3
00
16,
631,
771
Add
ition
duringtheyear
Nil
2,994
,123
13,63
1,41
11,219
498
,322
17,12
5,07
5Ded
uctio
ndu
ring
theyear
Nil
Nil
Nil
Nil
Nil
Nil
Accum
ulated
dep
reciati
onason
March31,201
8 N
il 5
,844
,165
2
7,04
6,50
9 2
,550
8
63,6
22
33,
756,
846
NetCarryingVa
lueasonApril1,201
6450
,000
82,66
2,46
1174
,945
,016
16,03
72,766
,700
260
,840
,214
NetCarryingVa
ueason
March31,201
7450
,000
84,79
9,56
5165
,685
,729
14,70
63,184
,356
254
,134
,356
NetCarryingVa
lueasonMarch31,201
8450
,000
82,66
0,29
4156
,485
,865
13,48
74,413
,137
244
,022
,783
Not
es:
i. D
eem
ed c
ost
of P
rope
rty,
Pla
nt &
Equ
ipm
ent a
s at
Apr
il 1,
201
6 is
as
unde
r:
(Am
ount
in `
)
Particulars
Gro
ss b
lock
A
ccum
ulat
ed
Dep
reciati
on
Written
downvalue
Land
(FreeHold)
450
,000
Nil
450
,000
Bu
ildin
gs98,66
2,78
416,00
0,32
382,66
2,46
1Plan
t&M
achine
ry214
,290
,840
39,34
5,82
4174
,945
,016
Co
mpu
ters
578
,270
562
,233
16,03
7Fu
rnitu
re&Fixtures
4,594
,802
1,828
,102
2,766
,700
To
tal
318
,576
,696
5
7,73
6,48
2 2
60,8
40,2
14
Note-T
heCom
panyhaselected
tomea
sureallofitsprop
erty,p
lantand
equ
ipmen
tatthe
irpreviou
sGAAPcarrying
value
owingtoexempti
ongiven
inParaD7A
AofInd
AS10
1-Firstti
mead
optio
nofIn
dian
Accou
nting
Stand
ards.(referNote46
tofina
ncialstatemen
t)
ii.
Ass
ets
pled
ged
as s
ecur
ity:
Re
ferNote.19&22fordisclosureofa
ssetspled
gedassecurity.
iii.
Capitalised
borrowingcost:
Bo
rrow
ingCo
stCap
italised
onProp
erty,P
lantand
Equ
ipmen
tduringtheyearend
edM
arch31,201
8-R
s.Nil/-(fortheyearend
edM
arch31,201
7:Rs.Nil/-).
iv.
Contractua
lobligati
ons:
Re
ferNote.37fordisclosureofC
ontractualCom
mitm
entsfo
rtheacqu
isition
ofp
rope
rty,Plant&Equ
ipmen
t.
37Annual Report 2017-2018
6 Non Current Investments
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Investmentinequityinstrumentsatamortisedcost(Unquoted)
Nav-NirmanCo-Op.Bank(736sharesason31-03-2018,736sharesason31-03-2017and736sharesason01-04-2016)offacevalueRs.25eachfullypaidup.
18,400 18,400 18,400
Investmentsingovernmentsecuritiesatamortisedcost(Unquoted)
NationalSavingCertificate 4,000 4,000 4,000
Total 22,400 22,400 22,400
Aggregateamountofqoutedinvestment-Atcost Nil Nil Nil
Aggregateamountofunqoutedinvestment-Atcost 22,400 22,400 22,400
7 Non-Current Loans
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Unsecured, considered good
Loanstoothers 9,676,560 8,023,725 181,593,819
Total ….. 9,676,560 8,023,725 181,593,819
8 Other Non-Current Assets
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Capital Advances 646,684 1,366,944 744,000
Advance income tax :
Advancepaymentofincometax 6,133,265 Nil 6,250,359
Less:Provisionforincometax Nil Nil (2,656,000)
AdvanceIncomeTax(net) 6,133,265 Nil 3,594,359
Total ….. 6,779,949 1,366,944 4,338,359
9 Inventories
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Rawmaterials 40,613,589 42,580,564 21,135,877
Work-in-Process 26,448,133 8,296,493 2,651,476
FinishedStock 22,574,748 3,466,271 4,352,816
Total ….. 89,636,470 54,343,328 28,140,169
10 Trade receivables
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Trade Receivables (Unsecured)
ConsideredGood 127,475,836 106,718,103 14,425,091
ConsideredDoubtful Nil Nil Nil
127,475,836 106,718,103 14,425,091
Less:AllowanceforExpectedCreditLoss 2,366,842 774,922 8,934
Total ….. 125,108,993 105,943,181 14,416,156
38 Annual Report 2017-2018
Notes:
i. Outofabovetradereceivables,therearenoamountwhichisreceivablefromfirms/privatecompaniesinwhichdirectorsofthecompanyarepartners/directors.
ii. TheCompanyprovidesanallowanceforimpairmentofdoubtfulaccountsbasedonfinancialconditionofthecustomer,agingofthetradereceivableandhistoricalexperienceofcollectionsfromcustomers.Theactivityintheallowanceforimpairmentoftradereceivablesisgivenbelow:
AllownaceMovementforTradeReceivables As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Balanceatthebeginningoftheyear 774,922 8,934 Nil
Add:Allowancemadeduringtheyear 1,591,921 765,987 8,934
Less:Reversalofallowancemadeduringtheyear Nil Nil Nil
Closing Balance 2,366,842 774,922 8,934
11 Cash & Cash Equivalents
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Cash on hand 178,049 916,883 998,065
BalanceswithBank-InCurrentAccount 4,471 74 823,236
Total 182,520 916,957 1,821,301
12 Other Bank Balances
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Fixeddepositswithbanks(withoriginalmaturitymorethan3monthsbutlessthan12months)
39,005,036 59,272,827 69,017,459
MarginMoneyDeposits 1,944,667 1,800,022 1,664,617
Total 40,949,703 61,072,849 70,682,076
13 Loans
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Unsecured and considered good
LoanstoEmployees 188,544 193,556 243,500
LoanstoOthers Nil 2,500,000 Nil
Total 188,544 2,693,556 243,500
14 Other Current Financial Assets
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Derivativecontractsnotdesignatedasahedgerelationship(atfairvaluethroughprofitandloss)
20,596 Nil 2,121,901
Total 20,596 Nil 2,121,901
39Annual Report 2017-2018
15 Current Tax Assets (Net)
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Advance Income Tax (Net) :AdvancePaymentofIncomeTax Nil 8,373,000 NilLess:ProvisionforIncomeTax Nil (5,210,616) NilTotal Nil 3,162,384 Nil
16 Other Current Assets
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`Advances to Suppliers 116,754,722 120,842,353 1,100,880PrepaidExpenses 1,588,219 3,269,349 3,177,325GratuityFund(Refernote39tofinancialstatement) 466,991 113,252 227,316BalanceswithStatutoryAuthorities 12,264,746 12,370,522 10,081,081Total 131,074,678 136,595,475 14,586,602
17 Equity Share Capital
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
[i] AuthorisedShareCapital:
12,000,000 Equity sharesofRs. 10each (as atMarch31, 2017 :12,000,000 equity shares of Rs. 10 each& as at April 01, 2016 :12,000,000equitysharesofRs.10each)
120,000,000 120,000,000 120,000,000
[ii] Issued,Subscribed&Paid-upCapital:
10,000,000equitysharesofRs.10eachfullypaid(asatMarch31,2017:10,000,000equitysharesofRs.10each&asatApril01,2016:10,000,000equitysharesofRs.10each)
100,000,000 100,000,000 100,000,000
Total 100,000,000 100,000,000 100,000,000
(a) ReconciliationofthenumberofsharesoutstandingandtheamountofsharecapitalasatMarch31,2018,March31,2017andApril1,2016issetoutbelow:-
Particulars As at March 31, 2018 As at March 31, 2017 As at April 1, 2016
No. of Shares Amt (`) No. of Shares Amt (`) No. of Shares Amt (`)
Shares at the beginning 10,000,000 100,000,000 10,000,000 100,000,000 10,000,000 100,000,000
Addition Nil Nil Nil Nil Nil Nil
Deletion Nil Nil Nil Nil Nil Nil
Shares at the end 10,000,000 100,000,000 10,000,000 100,000,000 10,000,000 100,000,000
(b) ThedetailsofsharesheldbyParentCompanyandshareholdersholdingmorethan5%sharesissetoutbelow.
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
LincolnPharmaceuticalsLimited(ParentCompany) Nos. 9,858,450 9,858,450 9,858,450
% 98.58 98.58 98.58
(c) Rights,PreferencesandRestrictionsattachedtoequityshares
TheCompanyhasoneclassofequityshareshavingaparvalueofRs.10pershare.Eachshareholderiseligibleforonevotepershareheld.Thedividend,ifanyproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.Intheeventofliquidation,theequityshareholdersareeligibletoreceivetheremainingassetsoftheCompanyafterdistributionofallpreferentialamounts,ifany,inproportiontotheirshareholding.
40 Annual Report 2017-2018
(d) The Company has not reserved any share for issue under options and contracts or commitments for the sale of shares ordisinvestment.
(e) Therearenosharesissuedpursuanttocontract(s)withoutpaymentbeingreceivedincashorbywayofbonussharesorequitysharesboughtbackfortheperiodof5yearsimmediatelyprecedingthebalancesheetdate.
18 Other Equity
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
(a) General Reserve
BalanceasperlastfinancialStatement 8,250,000 8,250,000 8,250,000
Add:Amounttransferfromsurplusbalanceinthestatementofprofitandloss
Nil Nil Nil
Closing Balance 8,250,000 8,250,000 8,250,000
(b) Retained Earnings
ProfitandLoss:
BalanceasperlastfinancialStatement 28,779,034 21,471,664 11,323,376
Add:Profitfortheyear 19,120,534 7,307,370 Nil
Add:ItemsofProfitandLossrecogniseddirectlyinretainedearningsonaccountoftransition
Nil Nil 10,148,288
NetSurplusinthestatementofprofitandloss(i) 47,899,567 28,779,034 21,471,664
Other Comprehensive Income
BalanceasperlastfinancialStatement 45,018 27,255 40,718
Add:RemeasurementofDefinedbenefitplans(includingdeferredtax)
68,112 17,762 Nil
Less:DeferredTaxAssetonabove Nil Nil 13,463
Net Surplus in the statement of other comprehensive income(ii) 113,130 45,018 27,255
EquityPortionofFinancialInstruments:
FinancialGuaranteefromParentCompany 2,973,346 2,973,346 2,973,346
InterestfreeSecurityDepositsfromParentCompany 54,619,446 54,619,446 54,619,446
Total (iii) 57,592,792 57,592,792 57,592,792
Total Retained Earnings (i + ii + iii) 105,605,489 86,416,844 79,091,711
(c) Capital Reserve
BalanceasperlastfinancialStatement 151,023 151,023 151,023
Add:Amounttransferfromsurplusbalanceinthestatementofprofitandloss
Nil Nil Nil
Closing Balance 151,023 151,023 151,023
Total (a + b + c) 114,006,512 94,817,867 87,492,734
General Reserve: Generalreserveiscreatedfromtimetotimebytransferofprofitsfromretainedearnings.Itdoesnotincludeanyitemwhichistransferredfromothercomprehensiveincomeorequitycomponentoffinancialinstruments.GeneralReserveiscreatedforappropriationpurposes.
Retained earnings: Retainedearningscanbeutilisedbythecompanyfordistributiontoitsequityshareholdersofthecompany.TheamountthatcanbedistributedbytheCompanyasdividendstoitsequityshareholdersisdeterminedbasedontherequirementsoftheCompaniesAct,2013.Thus,theamountsreportedabovearenotdistributableinentirety.
Capital Reserve: Capitalreservecanbeutilisedbythecompanyforissuanceofbonusshares.
41Annual Report 2017-2018
19 Non-CurrentBorrowings
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
SecuredBorrowingTermLoanfromBank(ForeignCurrencyExternalCommercialBorrowings) 52,894,382 105,454,536 152,836,839Less:Currentmaturitiesoflong-termdebt(Note:24) 44,951,949 52,727,268 44,951,949Total 7,942,433 52,727,268 107,884,890
SecuredBorrowing:
i. TheCompanyhasborrowedsecuredforeigncurrencyexternalcommercialborrowings(ECBLoan)forProjectpurpose.Thesamepayable inhalf-yearly instalmentsequated2 instalmentsofUSD406,604eachandcarriesan interestrateofBank’sMargin+6-monthLIBORfromtimetotime.
ii. SaidECBloanissecuredagainstfollowing:
a. Hypothecationchargesonfixedassetsofthecompany,bothpresentandfuture,
b. Mortgageoffactoryland,
c. Pledgeofshares:0.8millionofsharesofholidngcompany“LincolnPharmaceuticalsLimited”bydirectorsofthecompanyorholdingcompany.
d. Corporateguaranteeofholdingcompany.
f. Personalguaranteeoftwodirectorsofthecompanyaswellasthreedirectorsofholdingcompany.
20 Other Non Current Financial Liabilites
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Securitydepositsfromholdingcompany(atamorisedcost) 144,892,903 134,784,095 125,380,554Total 144,892,903 134,784,095 125,380,554
21 DeferredTaxLiabilities(Net)
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`DeferredTaxLiabilitiesTimedifferenceofdepreciationasperTaxProvisionandCompanyLawonProperty,PlantandEquipment
25,444,541 24,040,683 21,116,238
Unpaidliabilityallowableonpaymentbasisinsuccedingyearsu/s.43BoftheIncometaxAct,1961
55,879 22,236 13,463
TotalDeferredTaxLiabilities 25,500,420 24,062,919 21,129,701 Deferred Tax AssetsAllowanceforExpectedCreditLossonTradeReceivables 782,549 256,212 2,954UnusedTaxCredit 11,353,259 12,275,637 7,190,646Unabsorbeddepreciation(refernotebelow) Nil 2,763,822 8,152,263Total Deferred Tax Assets 12,135,808 15,295,672 15,345,863 Net Deferred Tax Liability 13,364,612 8,767,248 5,783,838
Note:
i. TheCompanyhasrecognizeddeferredtaxassetonunabsorbeddepreciationasbelow:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`Taxlossesthatcanbecarriedforwardedwithoutanyexpiration(i.e.unabsorbeddepreciation)
Nil 8,359,261 24,656,756
Taxlossesthatcanbecarriedforwardeduptocertaintimelimit(i.e.businessloss)
Nil Nil Nil
Total tax losses Nil 8,359,261 24,656,756Taxlossesforwhichdeferredtaxassethasbeenrecognized Nil 8,359,261 24,656,756Taxlossesforwhichnodeferredtaxassethasbeenrecognized Nil Nil [email protected]%onunusedtaxlossesforwhichnotaxassethasbeenrecognizedasabove
Nil Nil Nil
42 Annual Report 2017-2018
ii. Movementofdeferredtaxliability:
Movements in Deferred Tax Liabilities
Timedifferenceofdepreciation
as per Tax Provision and
CompanyLawonProperty, Plant and Equipment
Unpaid liability allowableon
payment basis in succeding years u/s. 43B of the
Income tax Act, 1961
AllowanceforExpected Credit
Loss on Trade Receivables
Unused Tax Credit
Unabsorbed depreciation
(refer note below)
At April 01, 2016 21,116,238 13,463 (2,954) (7,190,646) (8,152,263)Charged/(credited):- toprofitorloss 2,924,445 Nil (253,258) (5,084,991) 5,388,441- toothercomprehensiveincome Nil 8,773 Nil Nil NilAt March 31, 2017 24,040,683 22,236 (256,212) (12,275,637) (2,763,822)Charged/(credited): - toprofitorloss 1,403,858 Nil (526,337) 922,378 2,763,822- toothercomprehensiveincome Nil 33,643 Nil Nil NilAt March 31, 2018 25,444,541 55,879 (782,549) (11,353,259) Nil
22 CurrentBorrowings
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
SecuredBorrowingCashCreditfromBank(RepayableonDemand) Nil 9,165,711 25,621,509Total ….. Nil 9,165,711 25,621,509
Security :
WorkingCapitalfacilitiesaresecuredagainstfirstchargeandfuturecurrentassetsincludingentirestock,tradereceivables,loansandadvancesandmortgageofProperty,Plant&Equipmentandpersonallyguarantedbysomeofthedirectors/promotersofthecompany.
23 Trade payables
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
PayabletoMicroandSmallEnterprise Nil Nil NilPayabletoothers 79,299,330 70,685,372 67,754,649Total 79,299,330 70,685,372 67,754,649
Notes:
i Therewere no overdue amounts/interest payble toMicro, Small andMediumEnterprisesDevelpoment Act, 2006 as at theBalanceSheetdateoranytimeduringtheyear.
ii DuestoMicroandSmallenterpriseshavebeendeterminedtotheextentsuchpartieshavebeenidentifiedonthebasisoftheinformationcollectedbytheManagement.ThishasbeenrelieduponbytheAuditors.
24 Other Current Financial Liabilites
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
CurrentMaturityoflongtermborrowings(ReferNote19) 44,951,949 52,727,268 44,951,949
Interest accrued but not due on borrowings 4,429,721 3,715,407 4,871,751
Credit Balance in Current Account 100,510 1,309,534 5,431
EmployeeBenefitsPayable 240,774 205,177 601,342
CreditorsforProperty,Plant&Equipment 231,307 484,562 Nil
Derivativecontractsnotdesignatedasahedgerelationship(atfairvaluethroughprofitandloss)
437,072 1,303,832 2,028,319
Total 50,391,333 59,745,781 52,458,792
43Annual Report 2017-2018
25 OtherCurrentLiabilities
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Advancereceivedfromcustomers 130,602,072 96,617,958 Nil
OtherStatutorydues 1,364,003 241,001 2,111,950
Total 131,966,075 96,858,959 2,111,950
26 CurrentTaxLiabilities(Net)
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
ProvisionForIncometax 10,300,000 8,973,581 6,317,581
Less:AdvancePaymentofIncomeTax (4,500,000) (8,250,727) (2,000,000)
Total 5,800,000 722,854 4,317,581
27 Revenuefromoperation
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Sale of Product
FinishedGoods 684,701,841 592,136,917
Sale of services
JobWorkCharges 27,733,863 42,759,157
Total 712,435,703 634,896,074
28 Other Income
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
InterestIncomeFromBank 3,881,646 13,899,193
GainonFairValuationofDerivativecontracts 887,356 Nil
ForeignExchangeGain 695,968 Nil
Miscellaneous income 2,624,555 1,692
Total 8,089,525 13,900,885
29 Cost of Materials Consumed
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Inventoryatthebeginningoftheyear 42,580,564 21,135,877
Add:Purchase 299,706,579 227,865,315
Less:Inventoryattheendoftheyear 40,613,589 42,580,564
Cost of Materials Consumed 301,673,554 206,420,628
44 Annual Report 2017-2018
30 Change In Inventories of Finished Goods,Work In Progress And Stock In Trade
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Inventory at the beginning of the year
Work-in-process 8,296,493 2,651,476
StockinTrade Nil Nil
FinishedStock 3,466,271 4,352,816
Opening Stock 11,762,764 7,004,292
Inventory at the end of the year
Work-in-process 26,448,133 8,296,493
StockinTrade Nil Nil
FinishedStock 22,574,748 3,466,271
Closing Stock 49,022,881 11,762,764
Decretion/(Accretion)toStock (37,260,117) (4,758,472)
31 EmployeeBenefitExpense
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Salary,Wages&BonusExpenses 28,804,125 24,445,127
ContributiontoProvidentFund&OtherFunds 1,014,007 952,520
StaffwelfareExpenses 6,579,318 Nil
Total 36,397,450 25,397,647
32 Finance Costs
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
InterestPaidtoBank 6,134,803 9,845,532
Interestexpenseonfinancialliabilityrecognisedatamortisedcost(aspereffectiveinterestratemethod)
10,108,807 9,403,542
InterestPaidtoOthers 33,111 103,950
Otherborrowingcost 6,360,779 3,565,941
Total 22,637,500 22,918,964
33 DepreciationAndAmortisationExpense
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
DepreciationonProperty,Plant&Equipment 17,125,075 16,631,772
Total 17,125,075 16,631,772
45Annual Report 2017-2018
34 Other Expenses
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Power&Fuel 1,471,455 1,032,960
Stores&Sparesconsumed 3,789,551 6,839,940
JobworkCharges 15,772,584 11,365,760
LabourExpenses 1,020 7,466,474
Repairs To:
Building 1,300,686 873,401
Machinery 3,857,947 2,806,111
Insurance 199,727 228,892
Rates&Taxes 4,558,601 6,245,064
Stationery,Printing&Communication 275,875 254,140
Traveling&ConveyanceExpense 1,422,528 1,105,003
Legal&ProfessionalExpenses 1,491,028 1,113,918
Freight&Deliverycharges 360,192 181,184
Auditor'sRemuneration 200,000 35,000
Sales Commission 5,623,046 343,564
Donation Nil 11,000
AllowanceforExpectedCreditLoss 1,591,921 765,987
MTMLossonFairValuationofDerivativecontracts Nil 1,397,414
FactoryExpenses 2,379,153 2,040,137
Miscellaneousexpenses(includesFactoryexpenses,TelephoneexpensesandInspectionFeesetc.)
54,554 124,981
Total 44,349,868 44,230,929
35 Incometaxrecognisedinprofitorloss
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Current tax:
Inrespectofthecurrentyear 10,300,000 5,210,616
Inrespectoftheprioryear (2,613,897) Nil
Sub-Total (i) 7,686,103 5,210,616
Deferredtax:
Inrespectofthecurrentyear 4,563,721 2,974,636
Sub-Total (ii) 4,563,721 2,974,636
Total (i + ii) 12,249,824 8,185,252
46 Annual Report 2017-2018
Incometaxreconciliation
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Profitbeforetax 31,370,358 15,492,623
Taxexpensesreportedduringtheyear 12,249,824 8,185,252
Incometaxexpensescalculatedat33.063% 10,371,981 5,122,326
Difference 1,877,843 3,062,927
Permanentdisallowances 3,712,394 4,001,917
Otherdeductibleexpenses Nil (363,944)
IncomenottaxableunderIncometax (293,387) Nil
Effectofdeferredtaxbalancesduetochangeinincometaxratefrom30%to33.06% Nil 364,921
Adjustmentofcurrenttaxofprioryears 2,613,897 Nil
Utilisationofunabsorbeddepreciation (2,763,822) (5,388,441)
AdditionalMATCreditrecognized Nil 5,084,992
UtilisationofMATCredit (922,378) Nil
OtherItems (468,861) (636,518)
Total 1,877,843 3,062,927
36 Statement of Other Comprehensive Income
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
(i) Itemsthatwillnotbereclassifiedtoprofitandloss
Remeasurementofdefinedbenefitplans
Actuarial gain/(loss) 101,755 26,535
(ii) Incometaxrelatingtotheseitemsthatwillnotbereclassifedtoprofitandloss
Deferredtaximpactonactuarialgain/(loss) (33,643) (8,773)
Total ….. 68,112 17,762
37. Capital Commitment
Detailsofoutstandingcapitalcommitmentsareasunder:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Estimated amount of contracts remaining to be executed on capitalaccountandnotprovidedfor
646,684 1,366,944 744,000
Advance paid against such contracts 646,684 1,366,944 744,000
Remaining outstanding commitment Nil Nil Nil
38. ContingentLiabilities
Detailsofcontingentliabilitiesareasunder:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
ContingentLiabilities Nil Nil Nil
39. DetailsofEmployeeBenefits:
(a) DefinedContributionPlans
TheCompanyoffersitsemployeesbenefitsunderdefinedcontributionplansintheformofprovidentfund.Providentfundcoversubstantiallyallregularemployeeswhichareonpayrollofthecompany.BoththeemployeesandtheCompanypaypredetermined
47Annual Report 2017-2018
contributions into theprovident fundandapprovedsuperannuation fund.Thecontributionsarenormallybasedonacertainproportionoftheemployee’ssalaryandarerecognisedintheStatementofProfitandLossasincurred.
AsumofRs.753,125/-(March31,2017:Rs.735,663/-)hasbeenchargedtotheStatementofProfitandLossinrespectofthisplan.
(b) DefinedBenefitPlan-Gratuity:
TheCompanyhasadefinedbenefitgratuityplan.Everyemployeewhohascompletedfiveyearsormoreofservicegetsagratuityondepartureat15dayssalary(lastdrawnsalary)foreachcompletedyearofservice.TheschemeisfundedwithLifeInsuranceCorporationofIndiaintheformofaqualifyinginsurancepolicy.
ThefollowingtablesummarizesthecomponentsofnetbenefitexpenserecognizedintheStatementofProfitandLossandthefundedstatusandtheamountsrecognizedintheBalanceSheetfortheplan:
A. ExpensesRecognizedduringtheperiod
Particulars Gratuity
Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
In Income Statement 260,452 216,857
InOtherComprehensiveIncome (101,755) (26,535)
TotalExpensesRecognized 158,697 190,322
A1. ExpensesRecognizedintheIncomeStatement
Particulars Gratuity
Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Current Service Cost 269,025 235,201
NetInterestCost (8,573) (18,344)
ExpensesRecognizedintheStatementofProfitandLoss 260,452 216,857
A2. Other Comprehensive Income
Particulars Gratuity
Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Actuarial (gains) / losses
- changeinfinancialassumptions (149,301) 67,939
- experiencevariance 33,579 (117,776)
Returnonplanassets,excludingamountrecognizedinnetinterestexpense 13,967 23,302
Re-measurement(orActuarial)(gain)/lossarisingbecauseofchangeineffectofassetceiling
Nil Nil
Componentsofdefinedbenefitcostsrecognizedinothercomprehensiveincome (101,755) (26,535)
B. NetLiabilityrecognizedinthebalancesheet
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
PresentValueofObligation (1,522,742) (1,273,068) (1,063,902)
Fairvalueofplanassets 1,989,733 1,386,320 1,291,218
Surplus/(Deficit) 466,991 113,252 227,316
Net(Liability)recognizedintheBalancesheet 466,991 113,252 227,316
48 Annual Report 2017-2018
B1. ChangesinthePresentvalueofObligation
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
PresentValueofObligationasatthebeginning 1,273,068 1,063,902 825,974
Current Service Cost 269,025 235,201 200,465
InterestExpenseorCost 96,371 85,857 65,582
Re-measurement (or Actuarial) (gain) / loss arising from:
- changeinfinancialassumptions (149,301) 67,939 (14,999)
- experiencevariance 33,579 (117,776) (13,120)
PastServiceCost Nil Nil Nil
BenefitsPaid Nil (62,055) Nil
PresentValueofObligationasattheendoftheyear 1,522,742 1,273,068 1,063,902
B2. Changes in the Fair Value of Plan Assets
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
FairvalueofPlanAssetsatthebeginningoftheyear 1,386,320 1,291,217 853,309
Interest Income 104,944 104,201 67,753
ContributionbyEmployer 512,436 14,204 357,556
(BenefitpaidfromtheFund)
ReturnonPlanAssets,ExcludingInterestIncome (13,967) (23,302) 12,599
Fair Value of Plan Assets at the end of the year 1,989,733 1,386,320 1,291,217
C. ActuarialAssumptions
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
DiscountRate 7.82% 7.57% 8.07%
Expectedrateofsalaryincrease 6.50% 6.50% 6.50%
ExpectedReturnonPlanAssets 7.82% 7.57% 8.07%
Mortality Indian Assured LivesMortality
(2006-08)Ultimate
Indian Assured LivesMortality
(2006-08)Ultimate
Indian Assured LivesMortality
(2006-08)Ultimate
RateofEmployeeTurnover Forservice4years and below
20.00%p.a. Forservice5
years and above 2.00%p.a.
2.00% 2.00%
RetirementAge 58Years 58Years 58Years
D. SensitivityAnalysis
Particulars Gratuity
Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
DefinedBenefitObligation(Base) 1,522,742 1,273,068
49Annual Report 2017-2018
Particulars Year Ended March 31, 2018 ` Year Ended March 31, 2017 `Decrease Increase Decrease Increase
DiscountRate(-/+1%)(% change compared to base due to sensitivity)
169,347 (141,648) 156,655 (129,921)
SalaryGrowthRate(-/+1%)(% change compared to base due to sensitivity)
(144,493) 169,899 (132,241) 156,767
AttritionRate(-/+1%)(% change compared to base due to sensitivity)
(17,858) 14,975 (10,879) 8,615
E. MaturityProfileofProjectBenefitObligation
Particulars Gratuity
As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Weightedaverageduration(basedondiscountedcashflows) 12 13 13
Expectedcashoutflowsoverthenext(valued on undiscounted basis):
Gratuity
As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
1year 230,403 101,342 82,732
2to5years 304,321 312,785 305,425
6to10years 466,568 428,665 225,727
F. Characteristicsofdefinedbenefitplansandrisksassociatedwiththem:
Valuationofdefinedbenefitplanareperformedoncertainbasicsetofpre-determinedassumptionsandotherregulatoryframeworkwhichmayvaryovertime.Thus,theCompanyisexposedtovariousrisksinprovidingtheabovebenefitplanswhichareasfollows:
a. Interest Rate Risk: AfallinthediscountratewhichislinkedtotheG.Sec.Ratewillincreasethepresentvalueoftheliabilityrequiringhigherprovision.Afallinthediscountrategenerallyincreasesthemarktomarketvalueoftheassetsdependingonthedurationofasset.
b. SalaryEscalationRisk:Thepresentvalueofthedefinedbenefitplanliabilityiscalculatedbyreferencetothefuturesalariesofmembers.Assuch,anincreaseinthesalaryofthemembersmorethanassumedlevelwillincreasetheplan’sliability.
c. Investment Risk: Thepresent valueof thedefinedbenefitplan liability is calculatedusingadiscount ratewhich isdeterminedbyreferencetomarketyieldsattheendofthereportingperiodongovernmentbonds.Ifthereturnonplanassetisbelowthisrate,itwillcreateaplandeficit.Currently,fortheplaninIndia,ithasarelativelybalancedmixofinvestmentsingovernmentsecurities,andotherdebtinstruments.
DuringtheyearcompanyhaschangedthebenefitschemeinlinewithPaymentofGratuityAct,1972byincreasingmonetaryceilingfrom10lakhsto20lakhs.Changeinliability(ifany)duetothisschemechangeisrecognisedaspastservicecost
40. SegmentReporting
TheCompany’soperationspre-dominantlyrelatestomanufacturingandsaleofpharmaceuticalproducts.TheCompanyhasconsideredtheonlyonereportingsegmentinaccordancewiththerequirementofIndAS108-OperatingSegments.
The Board of Directors (“BOD”) evaluates the Company’s performance and allocates resources based on an analysis of variousperformanceindicatorsofthissingleoperatingsegment.TheBODreviewsrevenueandgrossprofitastheperformanceindicatorforthissingleoperatingsegment.Accordingly,itconstitutesasasinglereportableoperatingsegment.
50 Annual Report 2017-2018
Detailsofentitywidedisclosuresforthissegmentaregivenasbelow:
Entity-widedisclosures
(i) BifurecationofRevenuefromexternalcustomersbyeachgroupofproducts:
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Sale of Products:Capsules 23,928,902 42,771,908Cream in tubes 112,896 2,841,125Drypowderinjection 137,721,502 86,761,456Liquidinbottles 159,006,044 113,298,529Liquidinjection 225,087,222 162,827,421Tablets 112,369,907 158,944,567Others 26,475,368 24,691,912Total 684,701,841 592,136,917 Saleofservices:Jobworkcharges 27,733,863 42,759,157Totalrevenuefromoperations 712,435,703 634,896,074
(ii) BifurecationofNetsalestoexternalcustomersbygeographicareaonthebasisoflocationofcustomers:
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
India 712,435,703 634,896,074OutsideIndia Nil NilTotal 712,435,703 634,896,074
(iii) Bifurecationoftotalassetsofthecompanybygeographicalareaonthebasisoflocationoftheasset:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`India 647,663,198 628,275,155 578,806,497OutsideIndia Nil Nil NilTotal 647,663,198 628,275,155 578,806,497
(iv) DetailsofCustomercontributing10%oformoreoftotalRevenue:
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`No.ofcustomerscontibuting10%ormoreoftotalrevenue(individually) 2 3Amountofrevenue 598,928,585 518,884,363%oftotalrevenue 84.07 81.73
51Annual Report 2017-2018
41 Fair Value Measurements
Financialinstrumentbycategoryandtheirfairvalue (Amountin`)
As at March 31, 2018 Carrying Amount FairValue(onlythoseitemswhicharerecognised at FVTPL / FVTOCI)
FVTPL FVTOCI Amortised Cost
Total Level 1 Level 2 Level 3 Total
Financial AssetsInvestments-NonCurrent
Nil Nil 22,400 22,400 Nil Nil Nil Nil
Loans-NonCurrent Nil Nil 9,676,560 9,676,560 Nil Nil Nil NilTradeReceivables Nil Nil 125,108,993 125,108,993 Nil Nil Nil NilCash and Cash Equivalents
Nil Nil 182,520 182,520 Nil Nil Nil Nil
OtherBankBalances Nil Nil 40,949,703 40,949,703 Nil Nil Nil NilLoans-Current Nil Nil 188,544 188,544 Nil Nil Nil NilOtherFinancialAssets NonCurrent Nil Nil Nil Nil Nil Nil Nil Nil Current 20,596 Nil Nil 20,596 Nil Nil 20,596 20,596Total Financial Assets 20,596 Nil 176,128,720 176,149,316 Nil Nil 20,596 20,596 FinancialLiabilitiesBorrowings NonCurrent Nil Nil 7,942,433 7,942,433 Nil Nil Nil Nil Current Nil Nil Nil Nil Nil Nil Nil NilOtherFinancialLiabilities NonCurrent Nil Nil 144,892,903 144,892,903 Nil Nil Nil Nil Current 437,072 Nil 49,954,261 50,391,333 Nil Nil 437,072 437,072TradePayables Nil Nil 79,299,330 79,299,330 Nil Nil Nil NilTotalFinancialLiabilties 437,072 Nil 282,088,927 282,525,999 Nil Nil 437,072 437,072
As at March 31, 2017 Carrying Amount FairValue(onlythoseitemswhicharerecognised at FVTPL / FVTOCI)
FVTPL FVTOCI Amortised Cost
Total Level 1 Level 2 Level 3 Total
Financial AssetsInvestments-NonCurrent
Nil Nil 22,400 22,400 Nil Nil Nil Nil
Loans-NonCurrent Nil Nil 8,023,725 8,023,725 Nil Nil Nil NilTradeReceivables Nil Nil 105,943,181 105,943,181 Nil Nil Nil NilCash and Cash Equivalents
Nil Nil 916,957 916,957 Nil Nil Nil Nil
OtherBankBalances Nil Nil 61,072,849 61,072,849 Nil Nil Nil NilLoans-Current Nil Nil 2,693,556 2,693,556 Nil Nil Nil NilOtherFinancialAssets NonCurrent Nil Nil Nil Nil Nil Nil Nil Nil Current Nil Nil Nil Nil Nil Nil Nil NilTotal Financial Assets Nil Nil 178,672,668 178,672,668 Nil Nil Nil Nil FinancialLiabilitiesBorrowings NonCurrent Nil Nil 52,727,268 52,727,268 Nil Nil Nil Nil Current Nil Nil 9,165,711 9,165,711 Nil Nil Nil NilOtherFinancialLiabilities NonCurrent Nil Nil 134,784,095 134,784,095 Nil Nil Nil Nil Current 1,303,832 Nil 58,441,949 59,745,781 Nil Nil 1,303,832 1,303,832TradePayables Nil Nil 70,685,372 70,685,372 Nil Nil Nil NilTotalFinancialLiabilties 1,303,832 Nil 325,804,395 327,108,227 Nil Nil 1,303,832 1,303,832
52 Annual Report 2017-2018
(Amount in `)
As at April 01, 2016 Carrying Amount FairValue(onlythoseitemswhicharerecognised at FVTPL / FVTOCI)
FVTPL FVTOCI Amortised Cost
Total Level 1 Level 2 Level 3 Total
Financial AssetsInvestments-NonCurrent
Nil Nil 22,400 22,400 Nil Nil Nil Nil
Loans-NonCurrent Nil Nil 181,593,819 181,593,819 Nil Nil Nil NilTradeReceivables Nil Nil 14,416,156 14,416,156 Nil Nil Nil NilCash and Cash Equivalents
Nil Nil 1,821,301 1,821,301 Nil Nil Nil Nil
OtherBankBalances Nil Nil 70,682,076 70,682,076 Nil Nil Nil NilLoans-Current Nil Nil 243,500 243,500 Nil Nil Nil NilOtherFinancialAssets NonCurrent Nil Nil Nil Nil Nil Nil Nil Nil Current 2,121,901 Nil Nil 2,121,901 Nil Nil 2,121,901 2,121,901Total Financial Assets 2,121,901 Nil 268,779,253 270,901,154 Nil Nil 2,121,901 2,121,901 FinancialLiabilitiesBorrowings NonCurrent Nil Nil 107,884,890 107,884,890 Nil Nil Nil Nil Current Nil Nil 25,621,509 25,621,509 Nil Nil Nil NilOtherFinancialLiabilities NonCurrent Nil Nil 125,380,554 125,380,554 Nil Nil Nil Nil Current 2,028,319 Nil 50,430,473 52,458,792 Nil Nil 2,028,319 2,028,319TradePayables Nil Nil 67,754,649 67,754,649 Nil Nil Nil NilTotalFinancialLiabilties 2,028,319 Nil 377,072,075 379,100,394 Nil Nil 2,028,319 2,028,319 Theabovefairvaluehierarchyexplainsthejudgementsandestimatesmadeindeterminingthefairvaluesofthefinancialinstrumentsthatare(a)recognisedandmeasuredatfairvalueand(b)measuredatamortisedcostforwhichfairvaluesaredisclosedinthefinancialstatements.Toprovidetheindicationaboutthereliabilityoftheinputsusedindeterminingfairvalue,theCompanyhasclassifieditsfinancialinstrumentsintothreelevelsprescribedisasunder:
Level1-Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilties
Level2-InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliabilty,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices)
Level3-Inputsfortheassetsorliabiltiesthatarenotbasedonobservablemarketdata(unobservableinputs)
Therewerenotransfersbetweenthelevelsduringtheyear
Valuationprocess
ThefinancedepartmentoftheCompanyincludesateamthatperformsthevaluationsoffinancialassetsandliabiltiesrequiredforfinancialreportingpurposes, includinglevel3fairvalues.Thefairvaluationof level1andlevel2classifiedassetsandliabiltiesarereadilyavailablefromthequotedpriciesintheopenmarketandratesavailableinsecondarymarketrespectively.
Thecarryingamountoftradereceivable,tradepayable,cashandbankbalances,shorttermloansandadvances,statutoryduespayable/receivable,shorttermborrowing,employeeduesareconsideredtobethesameastheirfairvalueduetotheirshort-termnature.
42 Financial risk management
TheCompany’sactivitiesexposeittoavarietyoffinancialrisks, includingcreditrisk,marketriskandliquidityrisk.TheCompany’sprimaryriskmanagementfocusistominimizepotentialadverseeffectsofmarketriskonitsfinancialperformance.TheCompany’sriskmanagementassessmentandpoliciesandprocessesareestablishedtoidentifyandanalysetherisksfacedbytheCompany,tosetappropriaterisklimitsandcontrolsandtomonitorsuchrisksandcompliancewiththesame.
TheCompany’sriskmanagementisgovernedbypoliciesandapprovedbytheboardofdirectors.TheCompanyidentifies,evaluatesandhedgesfinancialrisksincloseco-operationwiththeCompany’soperatingunits.Thecompanyhaspoliciesforoverallriskmanagement,aswellaspoliciescoveringspecificareassuchasforeignexchangerisk,interestraterisk,creditrisk,useofderivativeandnon-derivativefinancialinstruments.
53Annual Report 2017-2018
Theauditcommitteeoverseeshowmanagementmonitorscompliancewiththecompany’sriskmanagementpoliciesandproceduresandreviewstheadequacyoftheriskmanagementframeworkinrelationtotherisksfacedbytheCompany.Theauditcommitteeisassistedinitsoversightrolebyinternalaudit.Internalauditundertakesbothregularandadhocreviewsofriskmanagementcontrolsandprocedures,theresultsofwhicharereportedtotheauditcommittee.
I Credit Risk Creditrisk istheriskoffinancial losstotheCompanyifacustomerorcounterpartytoafinancial instrumentfailstomeetits
contractualobligationsandarisesprincipallyfromtheCompany’sreceivablesfromcustomers.Creditrisk ismanagedthroughcreditapprovals,establishingcreditlimitsandcontinuouslymonitoringthecreditworthinessofcustomerstowhichtheCompanygrantscredittermsinthenormalcourseofbusiness.Thehistoryoftradereceivablesshowsanegligibleprovisionforbadanddoubtfuldebts.TheCompanyestablishesanallowancefordoubtfuldebtsandimpairmentthatrepresentsitsestimateofexpectedlossesinrespectoftradeandotherreceivablesandinvestments.ThecompanyhasadoptedsimplifiedapproachofECLmodelforimpairment.
i) Trade Receivables:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Thedemographicsofthecustomerincludingthedefaultriskoftheindustryandcountryinwhichthecustomeroperates,alsohasaninfluenceoncreditriskassessment.TheCompanywithvariousactivitiesasmentionedabovemanagescreditrisk.Animpairmentanalysisisperformedateachreportingdateonanindividualbasisformajorcustomers.Inaddition,alargenumberofminorreceivablesaregroupedintohomogenousgroupsandassessedforimpairmentcollectively.Thecalculationisbasedonhistoricaldata.Ageingoftradereceivablesisasunder.TheCompanydoesnotholdcollateralassecurity.
ii) Financial assets that are neither past due nor impaired
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department inaccordancewiththeCompany’sassessmentofcreditriskaboutparticularfinancialinstitution.NoneoftheCompany’scashequivalents,includingtermdeposits(i.e.,certificatesofdeposit)withbanks,werepastdueorimpairedasateachbalancesheetdate.
II Liquid Risk
LiquidityriskistheriskthattheCompanywillnotbeabletomeetitsfinancialobligationsastheybecomedue.TheCompanymanagesliquidityriskbymaintainingadequatereserves,bankingfacilitiesincludingapprovedborrowingfacilitiessanctionedbytheParentCompany,bycontinuouslymonitoringforecastandactualcashflowsandmatchingthematurityprofilesoffinancialassetsandliabilities.Long-termborrowingsgenerallymaturebetweenOnetoTenyears.TheCompanymanagesitsliquidityriskbyensuring,asfaraspossible,thatitwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue.TheCompany’spolicyistomanageitsborrowingscentrallyusingmixtureoflong-termandshort-termborrowingfacilitiestomeetanticipatedfundingrequirements.
TheCompanyhasaccesstoasufficientvarietyofsourcesoffundinganddebtmaturingwithin12monthscanberolledoverwithexistinglender.AsofMarch31,2018,March31,2017andApril1,2016;theCompanyhadunutilizedcreditlimitsfrombanksof ` 30,000,000/-, 20,841,039/-, and 4,378,491/- respectively. The tables below analyze the company’s financial liabilities intorelevantmaturitygroupingsbasedontheircontractualmaturities.
Theamountsdisclosed in the tableare thecontractualundiscountedcashflows.Balancesduewithin12monthsequal theircarryingbalancesastheimpactofdiscountingisnotsignificant.
(Amount in `)
ContractualmaturitiesoffinancialliabilitiesasatMarch 31, 2018
Carrying Amount
ContractualCashFlows
On demand or within1year
Over 1 year within2years
Over 3 years within5years
Over 5 years Total
Borrowings:
NonCurrent 7,942,433 Nil 7,942,433 Nil Nil 7,942,433
Current Nil Nil Nil Nil Nil Nil
OtherFinancialLiabilities:
NonCurrent 144,892,903 Nil Nil 144,892,903 Nil 144,892,903
Current 50,391,333 50,391,333 Nil Nil Nil 50,391,333
TradePayables 79,299,330 79,299,330 Nil Nil Nil 79,299,330
Total 282,525,999 129,690,663 7,942,433 144,892,903 Nil 282,525,999
54 Annual Report 2017-2018
(Amount in `)
ContractualmaturitiesoffinancialliabilitiesasatMarch 31, 2017
Carrying Amount
ContractualCashFlows
On demand or within1year
Over 1 year within2years
Over 3 years within5years
Over 5 years Total
Borrowings:
NonCurrent 52,727,268 Nil 44,951,949 7,775,319 Nil 52,727,268
Current 9,165,711 9,165,711 Nil Nil Nil 9,165,711
OtherFinancialLiabilities:
NonCurrent 134,784,095 Nil Nil 134,784,095 Nil 134,784,095
Current 59,745,781 59,745,781 Nil Nil Nil 59,745,781
TradePayables 70,685,372 70,685,372 Nil Nil Nil 70,685,372
Total 327,108,227 139,596,863 44,951,949 142,559,415 Nil 327,108,227
(Amount in `)
ContractualmaturitiesoffinancialliabilitiesasatApril 1, 2016
Carrying Amount
ContractualCashFlows
On demand or within1year
Over 1 year within2years
Over 3 years within5years
Over 5 years Total
Borrowings:
NonCurrent 107,884,890 Nil 52,727,268 55,157,622 Nil 107,884,890
Current 25,621,509 25,621,509 Nil Nil Nil 25,621,509
OtherFinancialLiabilities:
NonCurrent 125,380,554 Nil Nil 125,380,554 Nil 125,380,554
Current 52,458,792 52,458,792 Nil Nil Nil 52,458,792
TradePayables 67,754,649 67,754,649 Nil Nil Nil 67,754,649
Total 379,100,394 145,834,950 52,727,268 180,538,175 Nil 379,100,394
III Market Risk Marketriskistheriskoflossoffutureearnings,fairvaluesorfuturecashflowsthatmayresultfromadversechangesinmarket
ratesandprices(suchasinterestrates,foreigncurrencyexchangeratesandcommodityprices)or inthepriceofmarketrisk-sensitiveinstrumentsasaresultofsuchadversechangesinmarketratesandprices.Marketriskisattributabletoallmarketrisk-sensitivefinancialinstruments,allforeigncurrencyreceivablesandpayablesandallshorttermandlong-termdebt.TheCompanyisexposedtomarketriskprimarilyrelatedtoforeignexchangeraterisk,interestrateriskandcommodityrisk.
a) Currency Risk
Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofanexposurewillfluctuatebecauseofchangesinforeignexchangerates.
TheCompany’sforeignexchangeriskarisesmainlyfromfollowingfinancingactivities:
ExternalCommericalBorrowing(ECB)andinterestthereon(inUSD):TheCompanyhasborrowedsecuredforeigncurrencyexternalcommercialborrowings(ECBLoan) forProjectpurpose.Asaresult, if thevalueofthe Indianrupeedepreciatesrelativetothisforeigncurrency,theCompany’sfinancecostsmeasuredinIndianRupeesmayincrease.AsofMarch31,2018,theCompanyhasenteredintoderivativecontractsofRs.52,894,382/-tohedgeexposuretofluctuationsinforeigncurrencyrisk.Thebelowsensitivitydoesnotincludetheimpactofforeigncurrencyforwardcontractswhichlargelymitigatetherisks.
Companydoesnotusederivativefinancialinstrumentsfortradingorspeculativepurposes.
55Annual Report 2017-2018
i) Thefollowingtableanalysesforeigncurrencyriskfromnon-derivativefinancialinstrumentsasateachbalancesheetdate:
Particulars Currency As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Non-Currentborrowing(ExternalCommercialBorrowings-includingcurrentmaturities)
USD 813,208 1,626,416 2,304,088
INR 52,894,382 105,454,536 152,836,839
OtherCurrentFinancialLiability(Interest accrued but not due on borrowing)
USD 68,103 57,302 73,444
INR 4,429,721 3,715,407 4,871,751
TotalExposure USD 881,311 1,683,718 2,377,532
INR 57,324,103 109,169,944 157,708,590
ii) ForeignCurrencyRiskSensitivity The sensitivity of profit or loss due to changes in the exchange rates arises mainly from non-derivative foreign
currencydenominatedfinancialinstruments(mainlyfinancialinstrumentsdenominatedinUSDcurrency).Thesameissummarizedasbelow:
Particulars ImpactonProfitBeforeTax
Year Ended March 31, 2018 `
Year Ended March 31, 2017 `
5% Increase 5% Decrease 5% Increase 5% Decrease
USD (2,866,205) 2,866,205 (5,458,497) 5,458,497
Total ….. (2,866,205) 2,866,205 (5,458,497) 5,458,497
b) Interest Risk
Interestrateriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarket interestrates.TheCompany’sexposuretotheriskofchanges inmarket interestratesrelatedprimarilytotheCompany’sshort-termborrowingswithfloatinginterestrates.
Long-termborrowingsexposethecompanytoriskofchangesin interestratesastheCompanyhadExternalCommercialBorrowings(ECB)carryingavariableinterestrate.InordertohedgeinterestrateriskarisingoutofvariableinterestrateECBs,companyhasenteredintoInterestRateswaps.
For other borrowings, Company’s treasury department monitors the interest rate movement and manages the interest rate riskbasedonitspolicies.
Theexposureofthecompany’sborrowingtointerestratechangesattheendofthereportingperiodareasfollows:
i) Exposure to interest rate risk
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
FixedRateBorrowings Nil Nil Nil
VariableRateBorrowings 52,894,382 114,620,248 178,458,348
Total 52,894,382 114,620,248 178,458,348
FordetailsoftheCompany’sshort-termandlongtermloansandborrowings,includinginterestrateprofiles,refertoNote22and19ofthesefinancialstatements.
ii) InterestRateSensitivity
Profitorlossissensitivetohigher/lowerinterestexpensefromborrowingsasaresultofchangesininterestrates.Thebelowsensitivitydoesnotincludetheimpactofinterestrateswapcontractswhichlargelymitigatetherisk.
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
50bpincreasewoulddecreasetheprofitbeforetaxby (264,472) (573,101)
50bpdecreasewouldincreasetheprofitbeforetaxby 264,472 573,101
56 Annual Report 2017-2018
c) Price Risk
Exposuretomarket riskwithrespect tocommoditypricesprimarilyarises fromtheCompany’spurchasesandsalesofactivepharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These arecommodity products,whose pricesmay fluctuate significantly over short periods of time. The prices of the Company’s rawmaterialsgenerallyfluctuateinlinewithcommoditycycles,althoughthepricesofrawmaterialsusedintheCompany’sactivepharmaceuticalingredientsbusinessaregenerallymorevolatile.CostofrawmaterialsformsthelargestportionoftheCompany’scostofrevenues.Commoditypriceriskexposureisevaluatedandmanagedthroughoperatingproceduresandsourcingpolicies.AsofMarch31,2018,theCompanyhadnotenteredintoanymaterialderivativecontractstohedgeexposuretofluctuationsincommodityprices.
43 Due to Micro, Small and Medium Enterprise
UndertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006,(MSMED)whichcameintoforcefrom02.10.2006,certaindisclosersarerequiredtobemaderelatingtoMicro,SmallandMediumenterprises.Onthebasisof the informationandrecordsavailablewithmanagement,outstandingduestotheMicroandSmallenterpriseasdefinedintheMSMEDAct,2006aredisclosedasbelow:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`Principalamountremainingunpaidtoanysupplierasattheyearend Nil Nil NilInterest due thereon Nil Nil NilAmountofinterestpaidbytheCompanyintermsofsection16 Nil Nil NilAmountof interestdueandpayable for theperiodofdelay inmakingpayment (which have been paid but beyond the appointed day during theyear)butwithoutaddingtheinterestspecifiedundertheMSMED
Nil Nil Nil
Amount of interest accrued and remaining unpaid at the end ofaccountingyear
Nil Nil Nil
Total Nil Nil Nil
44 Capital Management:
TheCompany’scapitalmanagementisintendedtomaximisethereturntoshareholdersandbenefitsforotherstakeholdersformeetingthelong-termandshort-termgoalsoftheCompanyandreducethecostofcapitalthroughtheoptimizationofthecapitalstructurei.e.thedebtandequitybalance.
TheCompanymonitorsthecapitalstructureonthebasisofNetdebttoequityratioandmaturityprofileoftheoveralldebtportfoliooftheCompany.
Thegearingratioattheendofthereportingperiodwasasfollows:
Particulars As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`
Debt 52,894,382 114,620,248 178,458,348
Cashandbankbalances (41,132,223) (61,989,806) (72,503,377)
Netdebt 11,762,160 52,630,442 105,954,971
Equity 214,006,512 194,817,867 187,492,734
Netdebttoequityratio 5.00% 27.00% 57.00%
45 Details of Payment to Auditors
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
Payment to auditors:
Asauditor:
Auditfee 150,000 35,000
Taxationmatters 50,000 Nil
Companylawmatters Nil Nil
Total ….. 200,000 35,000
57Annual Report 2017-2018
46 TransitiontoInd-AS Thesefinancialstatements,fortheyearendedMarch31,2018,arethefirstfinancialsoftheCompanybeingpreparedinaccordance
withIndAS.ForperiodsuptoandincludingtheyearendedMarch31,2017,theCompanyhasprepareditsfinancialstatementsinaccordancewithaccountingstandardsnotifiedundersection133oftheCompaniesAct2013readtogetherwithrelevantrulesoftheCompanies(Accounts)Rules,2014(IndianGAAP).Therefore,comparativeinformationisreclassified/remeasuredsoastocomplywithIndAS.
Accordingly,theCompanyhaspreparedfinancialstatementswhichcomplywithIndASapplicableforperiodsendingonMarch31,2018, togetherwith the comparativeperioddata as at and for the year endedMarch31, 2017, as described in the summaryofsignificantaccountingpolicies.TheCompanyhaspreparedtheopeningbalancesheetasperIndASasofApril1,2016(thetransitiondate)byrecognisingallassetsandliabilitieswhoserecognitionisrequiredbyIndAS,notrecognisingitemsofassetsorliabilitieswhicharenotpermittedbyIndAS,byreclassifyingitemsfrompreviousGAAPtoIndASasrequiredunderIndASandapplyingIndASinmeasurementofrecognizedassetsandliabilities.
AnexplanationofhowthetransitionfrompreviousGAAPtoIndAShasaffectedtheCompany’sBalancesheet,StatementofProfitandLoss,issetouthere-in-after.
However,thisprincipleissubjecttothecertainmandatoryexceptionsandoptionalexemptionsavailedbytheCompanyinlinewithprinciplesofIndAS101asdetailedbelow:
46.1Exemptionsandexceptionsavailed
I Optionalexemptions
1 Property, Plant and Equipment (PPE) :
IndAS101permitsafirst-timeadoptertoelecttocontinuewiththecarryingvalueforallof itsproperty,plantandequipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per thepreviousGAAPandusethatasitsdeemedcostasatthedateoftransitionaftermakingnecessaryadjustmentsforde-commissioningliabilities.ThisexemptioncanalsobeusedforintangibleassetscoveredbyIndAS38IntangibleAssetsAccordingly, the Company has elected tomeasure all of its property, plant and equipment at their previousGAAPcarryingvalue.
II MandatoryExceptions
1 Estimates
Theestimatesas atApril 1, 2016andas atMarch31,2017are consistentwith thosemade for the samedates inaccordancewiththeIndianGAAP(afteradjustmentstoreflectanydifferencesinaccountingpolicies)apartfromtheimpairmentoffinancialassetsbasedontheriskexposureandapplicationofECLmodelwhereapplicationof IndianGAAPdidnotrequireanyestimation.
TheestimatesusedbytheCompanytopresenttheseamountsinaccordancewithIndAS,reflectconditionsatApril1,2016,thedateoftransitiontoIndASandasatMarch31,2017.
2 Classificationandmeasurementoffinancialassets
IndAS101providesexemptionstocertainclassificationandmeasurementrequirementsoffinancialassetsunderIndAS109,wheretheseareimpracticabletoimplement.Classificationandmeasurementisdoneonthebasisoffactsandcircumstancesexistingasonthetransitiondate.Accordingly,theCompanyhasdeterminedtheclassificationoffinancialassetsbasedonfactsandcircumstancesthatexistonthetransitiondate.
3 De-recognitionoffinancialassetsandliabilities:
TheCompanyhaselectedtoapplythede-recognitionprovisionsofIndAS109prospectivelyfromthedateoftransitiontoIndAS.
4 Classificationandmeasurementofgovernmentgrants:
The Company has elected to apply the classification and measurement provisions of Ind AS 109 and Ind AS 20prospectivelyfromthedateoftransitiontoIndAS.AccordinglyprovisionsofIndAS20shallapplytogovernmentgrantswhicharereceivedafterthedateoftransitiontoIndAS.
58 Annual Report 2017-2018
46.2ReconciliationofBalanceSheetasat1st April, 2016 (Amount in `)
Particulars Footnote Reference
Regrouped Previous
GAAP
Effectsof transition to Ind As
Amount as per Ind As
ASSETS
Non-current assets
(a) Property,PlantandEquipment 260,840,214 Nil 260,840,214
(d) Financial Assets
(i) Investments 22,400 Nil 22,400
(ii) Loans 181,593,819 Nil 181,593,819
(g) Othernon-currentassets 4,338,359 Nil 4,338,359
Total Non - Current Assets (1) 446,794,792 Nil 446,794,792
Current assets
(a) Inventories 28,140,169 Nil 28,140,169
(b) Financial Assets
(i) Investments Nil Nil Nil
(ii) Trade receivables 3 14,425,090 (8,934) 14,416,156
(iii) Cashandcashequivalents 1,821,301 Nil 1,821,301
(iv) OtherBankbalances 70,682,076 Nil 70,682,076
(v) Loans 243,500 Nil 243,500
(v) OtherFinancialassets 4 Nil 2,121,901 2,121,901
(d) Othercurrentassets 2 11,613,256 2,973,346 14,586,602
Total Current Assets (2) 126,925,392 5,086,313 132,011,705
Total Assets (1+2) 573,720,184 5,086,313 578,806,497
EQUITY AND LIABILITIES
Equity
(a) Share capital 100,000,000 Nil 100,000,000
(b) OtherEquity 3,5,6 19,724,398 67,768,336 87,492,734
Total equity (1) 119,724,398 67,768,336 187,492,734
LIABILITIES
Non-currentliabilities
(a) FinancialLiabilities
(i) Borrowings 6 104,813,802 3,071,088 107,884,890
(ii)Otherfinancialliabilities 1 180,000,000 (54,619,446) 125,380,554
(c) Deferredtaxliabilities(Net) 7 19,101,047 (13,317,209) 5,783,838
TotalNon-CurrentLiabilities(2) 303,914,849 (64,865,567) 239,049,282
Currentliabilities
(a) FinancialLiabilities
(i) Borrowings 25,621,509 Nil 25,621,509
(ii) Trade payables 5 67,599,424 155,225 67,754,649
(iii) Otherfinancialliabilities 4 50,430,473 2,028,319 52,458,792
(b) Othercurrentliabilities 2,111,950 Nil 2,111,950
(d) CurrentTaxLiabilities(Net) 4,317,581 Nil 4,317,581
TotalCurrentLiabilities(3) 150,080,937 2,183,544 152,264,481
TotalEquityandLiabilities(1+2+3) 573,720,184 5,086,313 578,806,497
59Annual Report 2017-2018
46.3ReconciliationofBalanceSheetasat31st March, 2017 (Amount in `)
Particulars Footnote Reference
Regrouped Previous
GAAP
Effectsof transition to Ind As
Amount as per Ind As
ASSETS
Non-current assets
(a) Property,PlantandEquipment 254,134,356 Nil 254,134,356
(d) Financial Assets
(i) Investments 22,400 Nil 22,400
(ii) Loans 8,023,725 Nil 8,023,725
(g) Othernon-currentassets 1,366,944 Nil 1,366,944
Total Non - Current Assets (1) 263,547,425 Nil 263,547,425
Current assets
(a) Inventories 54,343,328 Nil 54,343,328
(b) Financial Assets
(i) Investments Nil Nil Nil
(ii) Trade receivables 3 106,718,103 (774,922) 105,943,181
(iii) Cashandcashequivalents 916,957 Nil 916,957
(iv) OtherBankbalances 61,072,849 Nil 61,072,849
(v) Loans 2,693,556 Nil 2,693,556
(v) OtherFinancialassets Nil Nil Nil
(c) CurrentTaxAssets(Net) 3,162,384 Nil 3,162,384
(d) Othercurrentassets 2 134,703,346 1,892,129 136,595,475
Total Current Assets (2) 363,610,523 1,117,207 364,727,730
Total Assets (1+2) 627,157,948 1,117,207 628,275,155
EQUITY AND LIABILITIES
Equity
(a) Share capital 100,000,000 Nil 100,000,000
(b) OtherEquity 3,5,6 36,801,713 58,016,154 94,817,867
Total equity (1) 136,801,713 58,016,154 194,817,867
LIABILITIES
Non-currentliabilities
(a) FinancialLiabilities
(i) Borrowings 6 52,989,731 (262,463) 52,727,268
(ii)Otherfinancialliabilities 1 180,000,000 (45,215,905) 134,784,095
(c) DeferredTaxLiabilities(Net) 7 21,660,571 (12,893,323) 8,767,248
(d) Othernon-currentliabilities Nil Nil Nil
TotalNon-CurrentLiabilities(2) 254,650,302 (58,371,691) 196,278,611
Currentliabilities
(a) FinancialLiabilities
(i) Borrowings 9,165,711 Nil 9,165,711
(ii) Trade payables 5 70,516,458 168,914 70,685,372
(iii) Otherfinancialliabilities 4 58,441,951 1,303,830 59,745,781
(b) Othercurrentliabilities 96,858,959 Nil 96,858,959
(d) CurrentTaxLiabilities(Net) 722,854 Nil 722,854
TotalCurrentLiabilities(3) 235,705,933 1,472,744 237,178,677
TotalEquityandLiabilities(1+2+3) 627,157,948 1,117,207 628,275,155
60 Annual Report 2017-2018
46.4Reconciliationoftotalcomprehensiveincomefortheyearended31st March, 2017 (Amount in `)
Particulars Footnote Reference
Regrouped Previous
GAAP
Effectsof transition to Ind As
Amount as per Ind As
I Revenuefromoperations 10 621,845,152 13,050,922 634,896,074
II OtherIncome 13,900,885 Nil 13,900,885
III Total Income (I + II) 635,746,037 13,050,922 648,796,959
IV EXPENSES
(a) Costofmaterialsconsumed 206,420,628 Nil 206,420,628
(b) Purchasesofstock-in-trade 309,411,946 Nil 309,411,946
(c) Changesininventoriesoffinishedgoods, stock-in-tradeandwork-in-progress
(4,758,472) Nil (4,758,472)
(d) Exciseduty 10 Nil 13,050,922 13,050,922
(e) Employeebenefitexpense 8 25,371,112 26,535 25,397,647
(f) Finance costs 1,2,6 15,767,757 7,151,207 22,918,964
(g) Depreciationandamortisationexpense 16,631,772 Nil 16,631,772
(h) Otherexpenses 3,4 42,053,839 2,177,090 44,230,929
Total Expenses 610,898,582 22,405,754 633,304,336
V Profit/(loss)beforetax(III-IV) 24,847,455 (9,354,832) 15,492,623
VI Tax Expense
(1) Currenttax 5,210,616 Nil 5,210,616
(2) Deferredtax 7 2,559,524 415,112 2,974,636
Total tax expense 7,770,140 415,112 8,185,252
VII Profit/(loss)fortheperiod(VII) 17,077,315 (9,769,945) 7,307,370
VIII Other Comprehensive Income
(i) Itemsthatwillnotbereclassifiedtoprofitorloss
(a) Remeasurementsofthedefinedbenefitliabilities/ (asset)
9 Nil 26,535 26,535
(ii) Incometaxrelatingtoitemsthatwillnotbereclassifiedtoprofitorloss
9 Nil (8,773) (8,773)
Total Other Comprehensive Income Nil 17,762 17,762
IX Total comprehensive income for the period (VIII-IX) 17,077,315 (9,752,183) 7,325,132
46.5ImpactofIndAsadjustmentonstatementofcashflowfortheyearended31st March, 2017 (Amount in `)
Particulars Footnote Reference
Previous GAAP
Effectsof transition to Ind As
Amount as per Ind As
NetCashFlowfromoperatingactivities
1to11
8,888,130 (109,768,815) (100,880,685)
NetCashFlowfrominvestingactivities 10,495,936 166,909,055 177,404,991
NetCashFlowfromfinancingactivities (20,282,979) (57,145,671) (77,428,650)
Net increase / (decrease) in cash and cash equivalents (898,913) (5,431) (904,344)
CashandcashequivalentsasatApril1,2016 1,815,870 5,431 1,821,301
Cash and cash equivalents as at March 31, 2017 916,957 Nil 916,957
61Annual Report 2017-2018
46.6ReconciliationofEquity (Amountin`)
Particulars Footnote Reference
As at March 31, 2017
As at April 01, 2016
TotalEquity(Shareholder'sFund)asperpreviousGAAP 36,801,713 19,724,398
Ind AS Adjustments
EquityComponentofFinancialInstruments 1&2 57,592,792 57,592,792
Interestexpenseonnon-currentfinancialliabilities 1 (9,403,542) Nil
CommissiononFinancialGuaranteereceived 2 (1,081,217) Nil
AllowanceforExpectedCreditLossontradereceivable 3 (774,922) (8,934)
FairValueGain/(loss)onDerivativeFinancialInstruments(net) 4 (1,303,832) 93,582
AdjustmentinrespectofPriorPeriodExpenses 5 (168,914) (155,225)
AdjustmentinrespectofForeignCurrencyMonetaryItems 6 262,465 (3,071,088)
AdjustmenttoDeferredTax 7 12,893,323 13,317,209
Total Equity as per Ind AS 94,817,867 87,492,734
45.7ReconciliationoftotalcomprehensiveincomefortheyearendedMarch31,2017 (Amountin`)
Particulars Footnote Reference
As at March 31, 2017
ProfitaftertaxasperpreviousGAAP 17,077,315
Adjustments:
Interestexpenseonnon-currentfinancialliabilities 1 (9,403,542)
CommissiononFinancialGuaranteereceived 2 (1,081,217)
ProvisionofExpectedCreditLossontradereceivable 3 (765,987)
FairValueGain/(loss)onDerivativeFinancialInstruments 4 (1,397,414)
AdjustmentinrespectofPriorPeriodExpenses 5 (13,689)
AdjustmentinrespectofForeignCurrencyMonetaryItems 6 3,333,551
AdjustmenttoDeferredTax 7 (415,112)
Recalssificationofnetactuarial(gain)/lossonemployeedefinedbenefitobligationstoOCI 8 (26,535)
ProfitaftertaxasperIndAs 7,307,370
OtherComprehensiveIncome(netoftax) 9 17,762
Total Comprehensive income for the period under Ind As 7,325,132
Footnotes:
1 Interest free security deposits received from the parent company:
UnderpreviousGAAP, interest freesecuritydeposit fromtheparentcompany (which is refundable incashoncompletionofterm)wasrecordedat its transactionvalue.Under IndAS, thisdeposit is requiredtoberecognisedat fairvalue.Accordinglyontransitiondate,thecompanyhasmeasuredthesecuritydepositatitsfairvalue.Thefairvalueoftheliabilityportionofthisdepositisdeterminedusingamarketinterestrateforanequivalentdeposit.Thedifferencebetweenfairvalueandtransactionvalueofsecuritydeposithasbeenrecognisedasanequityinfusionbytheparentcompany.
Subsequently,theliabilitycomponentofsecuritydepositisrecognisedatamortisedcosttillrepayment.Thecompanyrecognisesinterestexpenseforthesameoverthelifeofthedepositusinginternalrateofreturn.Equitycomponentofthisdepositisnotremeasuredsubsequently.
2 Financial guarantee from the parent company:
UnderpreviousGAAP,financial guaranteeprovidedby theparent company to thebanksonbehalfof thecompany,wasnotrecognised.UnderIndAS,thisguaranteeisrequiredtoberecognisedatfairvalue.Accordinglythecompanyhasrecognisedthisguaranteeatfairvalue,asanequityinfusionbytheparentcompany.Simultenously,thecompanyhasrecognisedtheguaranteepremiumwith the same value as prepaid expenses. Fair value is determinedusing amarket rate for an equivalent financialguarantee.
Subsequentlytheprepaidguaranteepremiumisbeingexpensedonstraightlinebasisoverthetermofguaranteewhiletheequitycomponentofguaranteeisnotremeasured.
62 Annual Report 2017-2018
3 Provision of Expected Credit Loss on trade receivable
UnderpreviousGAAP,provisionsweremadeforspecificreceivablesifcollectionwasdoubtful.UnderIndAS109,theCompanyhasappliedexpectedcredit lossmodel for recognising impairmentoffinancialassets.Underexpectedcredit lossmodel, thecompanyhasadoptedsimplifiedapproach(provisionmatrix).
4 FairValueGain/(loss)onDerivativeFinancialInstruments
UnderthepreviousGAAP,onlyfairvaluelossonderivativefinancialinstrumentwasrecognised.UnderIndAS,derivativefinancialinstruments(whicharenotdesignatedinahedgerelationship)arevaluedatfairvalueandresultantgainorlossisrecognisedinthestatementofprofitandloss.
5 Prior Period Expenses
UnderPreviousGAAP,priorperioditemswerereflectedaspartofcurrentyearexpenseorincomeinthestatementofprofit&loss.UnderIndAS,materialpriorperioditemsareadjustedtotheperiodtowhichtheyrelateandincasetheyrelatetotheperiodearlierthanperiodpresented,theseareadjustedagainstopeningequityoftheearliestperiodpresented.
Accordingly,thepriorperiodexpensesofRs.155,225/-havebeenadjustedagainstopeningequityresultingintodecreaseinotherequityasonthetransitiondatei.e.1April,2016andincreaseinprofitbeforetaxfortheyearended31stMarch,2017.
FurtherthecompanyhaschargedRs.168,914/-tostatementofprofitandlossfortheyearended31March,2017resultingintodecreaseinprofitbeforetax(underthepreviousGAAP,thesamereflectedaspriorperiodexpensesinthestatementofprofitandlossfortheyearended31stMarch,2018).
6 ForeignCurrencyMonetaryItems(ExternalCommercialBorrowingclassifiedundernon-currentborrowing)
ThecompanyenteredintooptionagreementtohedgeforeignexchangeriskarisingoutofExternalCommercialBorrowings.TheCompanyhascalloptiontopayECBinstallmentatpre-decidedexchangeratestillcompletionofECBloan.
UnderpreviousGAAP,consideringoptionagreementonhand,outstandingECBloanwasbeingtranslatedatexchangeratefixedunderoptionagreementateachperiodend.Under IndAS, foreigncurrencymonetary itemsarerequiredtobetranslatedatclosingexchangerate.AccordinglythecompanytranslatesoutstandingECBloansatclosingexchangerateateachperiodendandadjustestheresultantgainorlossineitherstatementofprofitorlossoropeningequityasthecasemaybe.
7 Deferred Tax Adjustments:
TaxadjustmentsincludedeferrredtaximpactonaccountofdifferencesbetweenpreviousGAAPandIndASwhichmainlyincludesexpectedcreditlossallowanceandemployeebenefitobligations.
FurtherunderIndAS,thecompanyhasalsorecogniseddeferredtaxassetonpreviouslyunrecognisedtaxlossesandunutilisedtaxcredits.
8 Remeasurementofpostemploymentbenefitobligations
AsperIndAS,remeasurementofdefinedbenefitplanshavebeendisclosedunder‘OtherComprehensiveIncome”(OCI),whichwasbeingdebitedtostatementofprofitandlossunderpreviousGAAP.
9 Other Comprehensive Income
AsperIndAS,re-measurementofdefinedbenefitplanshavebeendisclosedunder‘OtherComprehensiveIncome”(OCI).Theimpactoftaxhasbeendisclosedseparetely.There-measurementofdefinedbenefitplanswasbeingdebitedtostatementofprofitandlossunderpreviousGAAP.
10 Excise Duty
UnderpreviousGAAP,saleofgoodswaspresentedasnetofexciseduty.However,underIndAS,saleofgoodsincludesexciseduty.Excisedutyonsaleofgoodsisseparatelypresentedonthefaceofstatementofprofitandloss.
11 Retained Earnings
RetainedearningsasatApril1,2015hasbeenadjustedconsequenttotheaboveIndAStransitionadjustments.
47. Earnings Per Share (EPS)
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
NetProfit/(Loss)forcalculationofbasic/dilutedEPS 19,120,534 7,307,370
WeightedAverageNumberofEquitySharesincalculatingBasicandDilutedEPS 10,000,000 10,000,000
BasicandDilutedEarnings/(Loss)PerShare 1.91 0.73
NominalValueofEquityShares 10 10
63Annual Report 2017-2018
A. ReconcilationonAmountofEPS
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
(a) Basic earnings per share
Fromcontinuingoperationsattributabletotheequityholdersofthecompany 1.91 0.73
Totalbasicearningspershareattributabletotheequityholdersofthecompany 1.91 0.73
(b) Diluted earnings per share
Fromcontinuingoperationsattributabletotheequityholdersofthecompany 1.91 0.73
Totaldilutedearningspershareattributabletotheequityholdersofthecompany 1.91 0.73
B. Reconciliationsofearningsusedincalculatingearningspershare
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
(a) Basic earnings per share
Profitattributabletotheequityholdersofthecompanyusedincalculatingbasicearningspershare:
Fromcontinuingoperations 19,120,534 7,307,370
(b) Diluted earnings per share
Profitfromcontinuingoperationsattributabletotheequityholdersofthecompany:
Profitattributabletotheequityholdersofthecompanyusedincalculatingdilutedearnings per share
19,120,534 7,307,370
C. Weighted average number of shares used as the denominator
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
(a) Basic earnings per share
Weightedaveragenumberofequitysharesusedasthedenominatorincalculatingbasic earnings per share
10,000,000 10,000,000
(b) Diluted earnings per share
Weightedaveragenumberofequitysharesandpotentialequitysharesusedasthedenominatorincalculatingdilutedearningspershare
10,000,000 10,000,000
D. Increase/decreaseinEPSduetoretrospectiverestatementofpriorperioderror
Particulars Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
(a) Basic earnings per share 0.02 (0.01)
(b) Dilutedearningspershare 0.02 (0.01)
64 Annual Report 2017-2018
48. RelatedPartiesDisclosures
(i) Listofrelatedparties:
Name of related party NatureofrelationshipLincolnPharmaceuticalsLimited HoldingCompanyZullincHealthcareLLP SubsidiaryofHoldingCompanyDowntownTravelsPvtLtd ControlledbyKeyManagerialPersonsofHoldingCompanyMahendraGPatelHUF ControlledbyKeyManagerialPersonsMunjalMPatelHUF ControlledbyKeyManagerialPersonsRajaniGPatelHUF ControlledbyKeyManagerialPersonsAnandAPatel Key Managerial personAshishRPatel KeyManagerialPersonsofHoldingCompanyHasmukhIPatel KeyManagerialPersonsofHoldingCompanyMahendraGPatel KeyManagerialPersonsofHoldingCompanyMansiMPatel KeyManagerialPersonsofHoldingCompanyMunjalMPatel KeyManagerialPersonsofHoldingCompanyRajaniGPatel KeyManagerialPersonsofHoldingCompanyArvindGPatel RelativeofKeyManagerialPersonMansiAPatel RelativeofKeyManagerialPersonKailashbenMPatel RelativeofKeyManagerialPersonofHoldingCompanyKalpanabenRPatel RelativeofKeyManagerialPersonofHoldingCompany
(ii) Transactionsduringtheperiodandbalancesoutstandingwithrelatedpartiesareasunder:
Transactionswithrelatedpartiesduringtheyear:
Name of related party NatureofTransaction Year Ended March 31, 2018
`
Year Ended March 31, 2017
`
LincolnPharmaceuticalsLimited Saleofproducts 283,667,437 197,144,050Saleofservices(JobworkIncome) 1,791,088 1,447,588Purchaseofgoods 4,395,240 12,666,283Jobworkcharges Nil 57,322Interestexpense 10,108,807 9,403,542GuaranteeCommissionExpense 1,081,217 1,081,217
ZullincHealthcareLLP Saleofproducts 315,261,148 140,887,508Purchaseofgoods Nil 49,462,604
DowntownTravelsPvtLtd Loanrepaid 40,135 NilMahendraGPatelHUF Advancegivenforexpense 190,000 NilMunjalMPatelHUF Advancegivenforexpense 190,000 NilRajaniGPatelHUF Salescommissionexpense 400,000 NilAnandAPatel Directorremuneartion 1,092,476 804,060AshishRPatel Salescommissionexpense 1,850,000 NilHasmukhIPatel Advancegivenforexpense Nil 2,500,000
Advance repaid 2,500,000 NilMahendraGPatel Advancegivenforexpense 570,000 NilMansiMPatel Salescommissionexpense 1,000,000 Nil
Salaryexpense 810,000 520,000MunjalMPatel Salescommissionexpense 1,000,000 NilRajaniGPatel Salescommissionexpense 400,000 NilArvindGPatel Consultancy Fees 840,000 840,000MansiAPatel Salaryexpense 1,048,800 765,000KailashbenMPatel Salaryexpense 820,000 650,000KalpanabenRPatel Salescommissionexpense 400,000 Nil
Salaryexpense 624,167 910,000
65Annual Report 2017-2018
Balancesoutstandingateachreportingdate:
Name of Party Nature of Amount As at March 31, 2018
`
As at March 31, 2017
`
As at April 1, 2016
`LincolnPharmaceuticalsLimited: Guaranteepremiumpaidin
advance Othercurrentassets 810,913 1,892,129 2,973,346
SecurityDeposits Othernon-currentfinancialliabilities
(144,892,903) (134,784,095) (125,380,554)
Advancesforgoods Othercurrentliabilities (130,602,072) (96,896,965) Nil Outstandingreceivablesfor
goods Trade receivables Nil Nil (34,770,000)
Outstandingpayablesforgoods
Trade payables Nil Nil 3,393,879
ZullincHealthcareLLP TradeReceivables 1,661,148 Nil NilDowntownTravelsPvtLtd TradePayables Nil (40,135) (40,135)MahendraGPatelHUF AdvanceforExpense 190,000 Nil NilMunjalMPatelHUF AdvanceforExpense 190,000 Nil NilAnandAPatel TradePayables Nil (135,000) NilHasmukhIPatel CurrentLoans Nil 2,500,000 NilMahendraGPatel TradePayables 570,000 Nil NilMansiMPatel TradePayables (65,000) Nil NilMunjalMPatel TradePayables (380,000) Nil NilArvindGPatel TradePayables Nil (63,000) (126,000)KailashbenMPatel TradePayables 100,000 Nil Nil
Note:Figuresinbracketdenotescreditbalance.
49. TheGoodsandServiceTax(GST)Act,2017hasbeenimplementedwitheffectfromJuly1,2017whichreplacedmajorIndirecttaxesinIndia.Accordingly,theCompanyisliabletoGSTwitheffectfromJuly1,2017.TherevenuefromJulytoMarch,2018isnetofsuchGST.However,therevenuefromApriltoJune2017andpreviousyearisinclusiveofexciseduty.Accordingly,RevenueandExcisedutyonsaleofgoodsforthecurrentyearandpreviousyeararenotcomparabletothatextent.
50. Subsequent Events:
SubsequenttoBalanceSheetDate,therearenoeventsoccurredwhichrequiredisclosureoradjustmentsinthefinancialstatements.
51. PreviousePeriods’ /Years’figureshavebeen re-grouped /Re-Classifiedwherenecessary tomake it comparablewith thecurrentperiod.
AsperourreportofevendateattachedherewithFor J.T. Shah & Co.Chartered Accountants(Firm Regd. No. 109616W)
(J.T.SHAH)Partner (M.No.3983)
Place :AhmedabadDate :30/05/2018
For, Lincoln Parenteral Limited
Anand Patel (WholeTimeDirector) (DIN:00103316)
Mahesh Patel (Director) (DIN:00103239)
Bhavik P. Parikh (Company Secretary)
Place :AhmedabadDate :30/05/2018
66 Annual Report 2017-2018
ROUTE MAP OF AGM VENUE
67Annual Report 2017-2018
LINCOLN PARENTERAL LIMITED[CIN:U24231GJ1991PLC015674]
Regd.Office:“LINCOLNHOUSE”,BehindSatyamComplex,ScienceCityRoad,Sola,Ahmedabad-380060.Phone:+91-79-67778000Fax:+91-79-67778062
Email-ID:[email protected]
ATTENDANCE SLIPI/Weherebyrecordmy/ourpresenceatthe27th AnnualGeneralMeetingoftheCompanytobeheldonSaturday,September29,2018attheRegisteredOfficeoftheCompanyat“LINCOLNHOUSE”,BehindSatyamComplex,ScienceCityRoad,Sola,Ahmedabad-380060at4:00p.m.
FullnameoftheMember :
AddressoftheMember :
FolioNo : *DPIDNo. *ClientIDNO.
No.ofsharesheld :
FullnameoftheProxy :(Ifattendingthemeeting)
Member’s/Proxy’sSignature:Note:1. Pleasecomplete theFolio /DP ID-ClientNo.andname, sign thisAttendanceSlipandhand itoverat theAttendanceVerification
CounterattheENTRANCEOFTHEMEETINGHALL.*ApplicableforinvestorsholdingsharesinElectronic(Demat)form.
LINCOLN PARENTERAL LIMITED[CIN:U24231GJ1991PLC015674]
Regd.Office:“LINCOLNHOUSE”,BehindSatyamComplex,ScienceCityRoad,Sola,Ahmedabad-380060.Phone:+91-79-67778000Fax:+91-79-67778062
Email-ID:[email protected]
FORM NO. MGT-11
PROXY FORM(Pursuanttosection105(6)oftheCompaniesAct,2013andRule19(3)oftheCompanies(ManagementandAdministration)Rule2014)
NameoftheMember(s)
RegisteredAddress
E-MailID
FolioNo./ClientID/DP.ID
No.ofShares
I/we,beingthemember(s)oftheabovenamedcompany,herebyappoint:
(1) Name: Address:
EmailID: Signature: orFailinghim/her:
(2) Name: Address:
EmailID: Signature: orFailinghim/her:
(3) Name: Address:
EmailID: Signature: asmy/ourproxytoattendandvote(onapoll,ifdemanded)formy/usandonmy/ourbehalfatthe27th AnnualGeneralMeetingtobeheldonSaturday,September29,2018at4:00P.M.attheRegisteredOfficeoftheCompanyat:“LINCOLNHOUSE”,BehindSatyamComplex,ScienceCityRoad,Sola,Ahmedabad-380060andatanyadjournmentthereofinrespectofresolutionsasareindicatedbelow.
68 Annual Report 2017-2018
**Iwishmyaboveproxytovoteinthemannerasindicatedintheboxbelow:
ResolutionNo.
ParticularsofResolution Optional
For Against
ORDINARY BUSINESS
1. ToconsiderandadopttheAuditedFinancialStatementsoftheCompanyfortheYearEndedonMarch31,2018andDirector’sReportandAuditor’sReportthereon.
2. Re-AppointmentofShriBhagirathT.Patel[DIN:00218155],asaDirectorwhoretiresbyrotation.
3. Re-AppointmentofShriAnandA.Patel[DIN:00103316],asaDirectorwhoretiresbyrotation.
4. Appointmentof StatutoryAuditorsof theCompanytill theconclusionof the31stAnnualGeneralMeetingoftheCompanyandtoapprovetheirremuneration.
SPECIAL BUSINESSES:
5. ToRe-AppointShriMaheshM.Patel[DIN:00103239]asanIndependentDirectorforfurtherperiodofFiveYearsfromApril01,2019.
6. ToRe-AppointShriNareshP.Suthar[DIN:03261937]asanIndependentDirectorforfurtherperiodofFiveYearsfromApril01,2019.
7. ApprovalofmakinginvestmentexceedingthelimitunderSection186oftheCompaniesAct,2013.
8. ApprovalofenteringintorelatedpartytransactionsunderSection188oftheCompaniesAct,2013.
9. RatificationofpaymentofRemunerationofCostAuditorsfortheFinancialYear2018-19.
Signed this dayof 2018
SignatureofShareholder
SignatureofProxyholder(s)Note:1. ThisformofproxyinordertobeeffectiveshouldbedulycompletedanddepositedattheRegisteredOfficeoftheCompany,notless
than48hoursbeforethecommencementoftheMeeting.2. FortheResolutions,ExplanatoryStatementandNotes,pleaserefertotheNoticeoftheAnnualGeneralMeeting.3. **It isoptionaltoput‘X’ intheappropriatecolumnagainsttheResolutionsindicatedintheBox.Ifyouleavethe‘For’or‘Against’
columnblankagainstanyorallResolutions,yourproxywillbeentitledtovoteinthemannerashe/shethinksappropriate.4. Appointingtheproxydoesnotpreventashareholderfromattendingthemeetinginpersonifhesowishes.5. Pleasecompletealldetailsincludingdetailsofmember(s)intheaboveboxbeforesubmission.
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LINCOLN PARENTERAL LIMITED[CIN: U24231GJ1991PLC015674]Reg. Office: LINCOLN HOUSE ,Behind Satyam Complex, Science City Road, Sola, Ahmedabad-380060