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Home > Equity Market > Glenmark Pharmaceuticals Ltd.- Notes To Account >

Glenmark Pharmaceuticals Ltd.- Notes To Account

Industry: Pharmaceuticals
BSE Code :532296
NSE Code :GLENMARK
Business Group:Not Applicable
LTP (Rs.)
ISIN No :INE935A01035
Face Value/M Lot :1.00/1
P/E Ratio : 40.31
Market Cap : 17488.91 Cr
You can view the entire text of Notes to accounts of the company for the latest year.
Year End : 03 / 2014
1. CONTINGENT LIABILITIES AND COMMITMENTS NOT PROVIDED FOR

31 March 2014 31 March 2013

(i) Contingent Liabilties

(a) Claims against the Company not acknowledged as debts

- Labour dispute 0.07 0.06

- Disputed taxes and duties 123.96 105.78

(b) Guarantees

Bank guarantees 60.18 41.39

Letter of comfort on behalf of subsidiaries, to the extent of limits 32,046.48 24,286.73

(c) Others

Open letters of credit 223.22 18.64

Indemnity bonds 393.71 374.57

(d) In January 2014, the National Pharma Pricing Authority (NPPA) issued a demand notice ofRs. 150 towards overpricing of product "Doxovent 400 mg tab". The Company has filed a petition under Article 32 with the Hon'ble Supreme Court of India (Hon'ble Court), challenging the issue of the above mentioned demand notice on various grounds, primarily, that inclusion of "Theophylline" in the schedules of DPCO, 1995 is sub-judice before the Hon'ble Court.

The Hon'ble Court passed an ad-interim order staying any coercive steps against the Company and directed the matter be tagged along with the petition on the inclusion of "Theophylline" in the Schedule of DPCO, 1995. The Hon'ble Court has constituted a special bench to hear the petition (along with other petitions filed in this regard) and the matter is expected to be listed in due course.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2014 aggregate X 590.05 (2013 - X 264.03).

(b) Estimated amount of contracts remaining to be executed on other than capital commitment, net of advances, not provided for as at 31 March 2014 aggregate X 203.94 (2013 - X 209.26).

2. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares from the exercise of options on unissued share capital.

3. SEGMENT INFORMATION

Business segments

The Company is primarily engaged in a single segment business of formulations and is managed as one entity, for its various activities and manufacturing and marketing of pharmaceuticals is governed by a similar set of risks and returns.

Geographical segments

In the view of the management, the Indian and export markets represent geographical segments.

Revenue by market - The following is the distribution of the Company's sale (of products and services) by geographical markets (gross of excise duty and sales tax):

4. RELATED PARTY DISCLOSURES

In accordance with the requirements of Accounting Standard - 18 "Related Party Disclosures", the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as follows:

a) Parties where direct/indirect control exists

i) Subsidiary companies

Clenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Clenmark Pharmaceuticals Europe Ltd., U.K.)

Clenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Clenmark Generics (Europe) Ltd., U.K.)

Clenmark Pharmaceuticals S.R.O., Czech Republic

Clenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Clenmark Pharmaceuticals S. A., Switzerland

Clenmark Holding S. A., Switzerland

Clenmark Generics Finance S. A., Switzerland

Clenmark Pharmaceuticals S.R.L., Romania

Clenmark Pharmaceuticals Eood., Bulgaria

Clenmark Distributors SP z.o.o., Poland

Clenmark Pharmaceuticals SP z.o.o., Poland

Clenmark Generics Inc., USA

Clenmark Therapeutics Inc., USA

Glenmark Farmaceutica Ltda., Brazil

Clenmark Generics SA., Argentina

Clenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals Peru SAC, Peru

Clenmark Pharmaceuticals Colombia SAS, Colombia (formerly known as Clenmark Pharmaceuticals Colombia Ltda., Colombia)

Clenmark Uruguay S.A., Uruguay

Glenmark Pharmaceuticals Venezuela C.A., Venezuela

Clenmark Dominicana, SRL, Dominican Republic

Clenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Pharmaceuticals FZE., United Arab Emirates

Clenmark Impex L.L.C., Russia

Clenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Clenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Clenmark South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Clenmark Access Ltd (formerly known as Glenmark Exports Ltd.)., India

Clenmark Generics Ltd., India

Clenmark Pharmaceuticals B.V., Netherlands (formerly known as Glenmark Generics B.V.), Netherlands

Glenmark Arzneimittel Gmbh., Germany

Glenmark Generics Canada, Inc., Canada

Clenmark Pharmaceuticals Kenya Ltd., Kenya

Glenmark Therapeutics AC, Switzerland ii) Investment in Joint Venture

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand iii) Enterprise over which key managerial personnel exercise significant influence

Clenmark Foundation, India

b) Related party relationships where transactions have taken place during the year Subsidiary Companies/Joint Venture

Glenmark Farmaceutica Ltda., Brazil

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals S.A., Switzerland

Glenmark Pharmaceuticals Malaysia Sdn. Bhd., Malaysia

Glenmark Impex L.L.C., Russia

Glenmark Holding S.A., Switzerland

Glenmark Generics Ltd., India

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Venezuela C.A., Venezuela

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Generics S.A., Argentina

Glenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Glenmark Pharmaceuticals Europe Ltd., U.K.)

Glenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Glenmark Generics (Europe) Ltd., U.K.)

Glenmark Generics Inc., USA

Glenmark Pharmaceuticals s.r.o., Czech Republic

Glenmark Therapeutics Inc., USA

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

Glenmark Dominicana SRL., Dominican Republic

Glenmark Pharmaceuticals SP z.o.o., Poland

Glenmark Distributors SP z.o.o., Poland

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals Kenya Ltd., Kenya

Glenmark Pharmaceuticals Colombia SAS, Colombia (formerly known as Glenmark Pharmaceuticals Colombia Ltda., Colombia)

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark Therapeutics AG., Switzerland

Glenmark Access Ltd (formerly known as Glenmark Exports Ltd.)., India

Enterprise over which key managerial personnel exercise significant influence

Glenmark Foundation, India

c) Key Management Personnel

Mrs. B.E. Saldanha (Non-Executive Director)

Mr. Glenn Saldanha (Chairman & Managing Director)

Mrs. Cherylann Pinto (Executive Director)

Mr. Rajesh Desai (Executive Director)

5. OUTSTANDING DUES TO MICRO, SMALL AND MEDIUM SCALE BUSINESS ENTERPRISES

Based on the information available with the Company, no creditors have been identified as "supplier" within the meaning of "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006". Accordingly, no disclosure under the MSMED Act are required to be given.

6. LEASES

The Company has taken on lease/leave and licence godowns/residential & office premises at various locations in the country.

i) The Company's significant leasing arrangements are in respect of the above godowns & premises (including furniture and fittings therein, as applicable). The aggregate lease rentals payable are charged to Statement of Profit and Loss as rent.

ii) The Leasing arrangements which are cancellable range between 11 months to 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. An amount of Rs. 100.43 (2013 - Rs. 98.62) towards deposit and unadjusted advance rent is recoverable from the lessors.

The Company has entered into operating lease agreements for the rental of its office premises for a period of 3 to 5 years.

7. TAXATION

Provision for current taxation for the Company of Rs. 1,080.21 represents Minimum Alternate Tax pursuant to the provisions of Section 115JB of the Income Tax Act, 1961 of India.

The Finance Act, 2005 inserted sub section (1A) to Section 115JAA to grant tax credit in respect of MAT paid under Section 115JB of the Act with effect from Assessment Year 2006-07 and carryforward the credit for a period of 10 years. In accordance with the Guidance Note issued on "Accounting for credit available in respect of Minimum Alternative Tax (MAT) under the Income Tax Act, 1961" by the Institute of the Chartered Accountants of India, the Company has recognised MAT Credit which is expected to be set-off against the tax liability, other than MAT in future years. Accordingly, an amount of Rs. 477.56 for the current year has been recognised as MAT Credit Entitlement in note 11.

8. EMPLOYEE BENEFITS

The disclosures as required as per the revised AS 15 are as under:

1. Brief description of the Plans

The Company has various schemes for long-term benefits such as Provident Fund, Superannuation, Gratuity and Compensated absences. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities. The Company's defined contribution plans are Superannuation and Employees' Provident Fund and Pension Scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company's defined benefit plans include Gratuity benefit.

9. RESEARCH AND DEVELOPMENT EXPENDITURE

During the year, the Company expensed Rs. 1,213.55 (2013 - Rs. 929.44) as research and development costs.

10. Disclosure of Assets and Liabilities as on 31 March 2014 and Income and Expenses for the year ended 31 March 2014 related to the interest of the Company in the joint venture Clenmark Pharmaceuticals (Thailand) Co. Ltd, Thailand. These extracts have been drawn up from the audited financial statements of the joint venture, without giving effect to the elimination of transactions between the Company and the joint venture.

11. OTHER EVENTS

(i) The Board of Directors of Clenmark Pharmaceuticals Limited ("GPL"), in their meeting held on 31 January 2014, have approved a proposal to merge its subsidiaries i.e. Clenmark Generics Limited ("CCL") and Clenmark Access Limited ("GAL"), with GPL.

The merger will be effected through a court approved Scheme of Amalgamation under Sections 391 to 394 and other applicable provisions of Companies Act, 1956 ("Scheme"). As on date, 99.33% of the share capital of CGLis being held by GPL (including 1.19% being held by GAL, a wholly owned subsidiary of GPL). As per the Scheme, the remaining shareholders holding 0.67% (1,016,741 equity shares) of the share capital of GCL will be issued shares of GPL at a swap ratio which has been determined as 4 shares of GPL of Rs. 1 each for every 5 shares of Rs. 10 each held by shareholders of GCL. The Company has initiated necessary legal process to conclude the merger. The accounting effect of the merger shall be given only upon receipt of all regulatory approvals and necessary submissions to relevant authorities.

(ii) Merck Sharp & Dohme Pharmaceuticals Private Limited ('Merck'), the Indian affiliate of Merck & Co. Inc., USA had filed a suit for infringment and was seeking permanent injunction in the Hon'ble High Court at Delhi to restrain Clenmark from manufacturing and sale of generic versions of Merck's product Januvia (Sitagliptin Phosphate Monohydrate). The petition was dismissed by the single bench of the Hon'ble High Court at Delhi and Merck has now filed an appeal before the divisional bench of the Hon'ble High Court at Delhi, which is pending orders. Based on legal advice, the management is of the opinion that no liability is likely to devolve on the Company.

12. PRIOR YEAR COMPARATIVES

Prior year's figures have been regrouped or reclassified wherever necessary to confirm to current year's classification.

Visit the Glenmark Pharmaceuticals Ltd. company profile page for more information on the company. Learn about Glenmark Pharmaceuticals Ltd. raw material report, capital structure information, and list of bankers, auditors & registrars. Get live equity market updates and browse through breaking news stories from the Indian share market.

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