1Corporate information           

Concord Biotech Limited (the Company) is a public company domiciled in India and incorporated under the provisions of Companies Act, 1956.  The Company is engaged in research and development, manufacturing , marketing and selling of active pharmaceutical ingredients, with focus on the fermentation, semi-synthesis and synthesis based products.           

            

2Significant accounting policies           

a.Basis of accounting and brparation of financial statements           

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act")/ Companies Act,1956 (" the 1956 Act"), as applicable. The financial statements have been brpared on accrual basis under historical cost convention and going concern basis. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year.           

            

b.Use of Estimates           

The brparation  of the financial statements in conformity with  Indian GAAP  requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year.  The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable.  Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.           

            

c.Tangible and Intangible assets           

"Fixed assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use, less accumulated debrciation and impairment losses, if any. Borrowing costs directly attributable to qualifying assets / capital projects are capitalized and included in the cost of fixed assets. 

"           

Technical Know-how and Software costs are capitalized and recognized as Intangible Assets in terms of Accounting Standard -26 Intangible Assets based on materiality, accounting prudence and significant economic benefits expected to flow there from for a period longer than one year.           

            

d.Capital Work in Progress:           

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.            

            

e.Research & Development costs           

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilized for research and development are capitalized and debrciated in accordance with the policies stated for Fixed Assets.           

            

f.Intangible assets under development           

Expenditure on Research and development eligible for capitalization are carried as Intangible assets under development where such assets are not yet ready for their intended use.           

            

g.Debrciation and amortization           

"i) Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Debrciation on tangible fixed assets except vehicles have been provided based upon straight line method as per the useful life brscribed in Schedule II to the Companies Act, 2013. Debrciation on vehicles has been provided on written-down value method as per the useful life brscribed in Schedule II to the Companies Act, 2013. Debrciation on assets added/disposed off during the year is provided on pro-rata basis with reference to months of addition / disposal.   "           

ii) Debrciation on assets acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition/ disposal.           

iii) Assets costing less than Rs.  5,000/- are written off in the year of purchase.           

iv) Cost of Intangible assets are amortized on straight line method basis from the year of capitalization, over their estimated economic life of three years.             

            

h.Segment Reporting           

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The geographical segments are the segments for which separate financial information is available and for which geographical profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.           

"The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under unallocated revenue / expenses / assets / liabilities."           

            

i.Investments           

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.            

            

j.Revenue recognition           

"i) Sale of Goods

Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

"           

"ii) Income from services

Revenue from Sale of Services in respect of the Product Development Fees are recognized when services are rendered."           

iii) Interest income is accounted for on an accrual basis. Dividend income is accounted for when the right to receive income is established.           

            

k.Inventories           

Inventories are valued at the lower of cost and the net realizable value after providing for obsolescence and other losses, where considered necessary.  Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.           

            

l.Borrowing costs           

Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.           

m.Impairment of Assets           

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of  impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.           

n.Foreign exchange transactions           

i) Transactions denominated in foreign currencies are normally recorded at the exchange rates brvailing at the time of the transaction.           

ii) Monetary items denominated in foreign currencies at the balance sheet date are restated at the rates brvailing on that date. In case of monetary items which are covered by forward exchange contracts (which are not intended for trading or speculation purposes), the difference between the rate brvailing on the balance sheet date and rate on the date of the contract is recognized as exchange difference and the brmium paid on forward contracts is recognized over the life of the contract.           

iii) Non monetary foreign currency items are carried at cost.           

iv) Any income or expense arising on restatement / settlement are recognized in the Statement of Profit and Loss for the period in which the difference takes place.           

            

o.Derivative transactions           

Pursuant to the announcement on accounting for derivatives issued by the Institute of Chartered Accountants of India, the Company, in accordance with the principle of prudence as enunciated in AS 1, Disclosure of Accounting Policies, provides for losses in respect of all outstanding derivative contracts at the Balance Sheet date by marking them to market. Any net unrealized gains arising on such mark to market are not recognized as income.           

            

p.Employee Benefits           

Employee benefits include provident fund, gratuity fund, compensated absences, long service awards and post-employment medical benefits.            

            

Defined contribution plans           

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made.           

Defined benefit plans           

For defined benefit plans in the form of gratuity and leave encashment, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognized past service cost,  as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the brsent value of available refunds and reductions in future contributions to the schemes.           

            

q.Cenvat credit           

Cenvat credit in respect of Excise, Customs and Service Tax is accounted on accrual basis on purchase of eligible inputs, capital goods and services.                

            

r.Leases           

Assets acquired on leases where a significant portion of risks and rewards incidental to ownership is retained by the lessor are classified as operating lease.           

            

s.Earning per share           

Basic earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing  the profit after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.           

t.Taxes on Income           

"Provision for income tax is made on the basis of estimated taxable income for the year at current rates.

"           

            

Current Tax rebrsents the amount of Income Tax Payable in respect of the taxable income for the reporting period as determined in accordance with the provisions of the Income Tax Act, 1961 and other applicable laws.           

            

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off. Deferred tax assets and deferred tax liabilities relate to the taxes on income levied by the same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has carry forward unabsorbed debrciation or carry forward tax losses, deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidences that they can be realized against future taxable profits. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.           

            

u.Provisions, contingent liabilities and contingent assets           

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.           

            

            

v.Cash and cash equivalents (for purposes of Cash Flow Statement)           

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.            

            

w.Cash flow statement           

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.           

            

x.Operating cycle           

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

Note: 44        

"As per Accounting Standard 15 ""Employee Benefits"", the disclosure as defined in the accounting standard are given below."       

(a) Defined Benefit Plan       

"The Company operates the Gratuity plan covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.

Leave Encashment is a benefit to an employee based on the number of leave days accrued to the credit of employee subject to a maximum limit as per the rules of the Company. The same is calculated on the basis of last drawn basic monthly salary including dearness allowance (if any). The plan is unfunded."       

        

The disclosure of liabilities of gratuity and leave encashment as required under AS-15 (revised) is as follows : 

Particulars	Gratuity	Leave Encashment
As at 31st      March,            2017		As at 31st March,    2016	As at 31st March, 2017		As at 31st March, 2016
i. Reconciliation of Opening and Closing Balances of defined benefit obligation
Liability at the beginning of the  Year	150.64		110.87	60.19		51.09
Current Service Cost	34.61		24.27	13.06		8.05
Interest Cost	12.07		8.90	4.82		4.11
Past vested benefit
Losses/(Gains) on Curtailment
Liability Transferred in
Liability Transferred out
Benefit paid	(11.61)		(11.22)	(16.19)		(15.24)
Net Actuarial losses (gain) Recognized	24.77		17.82	24.62		12.18
Liability at the end of the Year	210.47		150.64	86.51		60.19
ii. Reconciliation of Opening and Closing Balances of the Fair value of Plan assets
Plan assets at the beginning of the Year, at Fair value	152.47		116.51	-		-
Expected return on plan assets	12.21		9.35	-		-
Contributions	45.56		35.37	-		-
Benefit paid	(5.13)		(7.21)	-		-
Actuarial gain/(loss) on plan assets	(3.59)		(1.55)	-		-
Transfer to other company	-		-
Plan assets at the end of the Year, at Fair Value	201.51		152.47	-		-

 iii. Reconciliation of the Present value of defined benefit obligation and Fair value of plan assets.

Obligations at the end of the Year	210.47		150.64	86.51		60.19
Plan assets at the end of the  Year, at Fair value	201.51		152.47	-		-
Asset / (Liability) recognized in balance sheet at the end of the Year	(8.96)		1.83	(86.51)		(60.19)
iv. Cost/(Gain) for the Year
Current service cost	34.61		24.27	13.06		8.05
Interest cost	12.07		8.90	4.82		4.10
Expected return on plan assets	(12.21)		(9.35)	-		-
Actuarial Gain or (Loss)	28.37		19.36	24.63		12.18
Loss /(Gain) on Curtailments	-		-
Past service cost-vested benefit recognized during the year				-		-
Net cost/(gain)	62.83		43.18	42.50		24.33
Particulars	Gratuity	Leave Encashment
As at 31st March,            2017		As at 31st March,    2016	As at 31st March, 2017		As at 31st March, 2016
v. Actual Return on Plan Assets	7.57%		8.01%
vi. Experience Adjustment
On Plan Liability (Gain) / Losses	19.66		12.00
On Plan Asset (Gain) / Losses	(3.59)		(1.55)
vii. Composition of Plan Assets
Insurer Managed Funds	201.51		152.47	-		-
viii. Actuarial Assumptions
Discount Rate (per annum)	7.57%		8.01%	7.57%		8.01%
Expected rate of return on plan assets	7.57%		8.01%	-		-
Salary Escalation	7.00%		7.00%	7.00%		7.00%
Attrition Rate	2.00%		2.00%	2.00%		2.00%
Retirement Age	60Years		60Years	60Years		60Years
Mortality Tables	Indian Assured Lives Mortality (2006-08) Ultimate		Indian Assured Lives Mortality (2006-08) Ultimate	Indian Assured Lives Mortality (2006-08) Ultimate		Indian Assured Lives Mortality (2006-08) Ultimate
Actuarial Valuation Method	Project Unit Credit Method	Project Unit Credit Method

(a)The discount rate is based on the brvailing market yields of Indian Government securities as at the Balance Sheet date.        

       

(b)The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.         

       

ix.Past five years data for defined benefit obligation and fair value of plan:

Gratuity	As at 31st March2012	As at 31st March2013	As at 31st March2014	As at 31st March2014	As at 31st March2014	As at 31st March2015	As at 31st March2016
Present value of defined benefit obligations at the end of the year	36.59	56.99	68.23	68.23	68.23	110.87	150.64
Fair value of plan assets at the end of the year	40.78	53.77	81.70	81.70	81.70	116.51	152.47
Net assets / (liability) at the end of year	4.19	(3.22)	(13.47)	(13.47)	(13.47)	(5.64)	(1.83)
Leave Encashment	As at 31st March,       2012	As at 31st March,     2013	As at 31st March,     2014	As at 31st March,            2014	As at 31st March,            2014	As at 31st March,            2015	As at 31st March,            2016
Present value of defined benefit obligations at the end of the year	100.42	46.34	48.29	48.29	48.29	51.09	60.19
Fair value of plan assets at the end of the year	-	-	-	-	-	-	-
Net assets / (liability) at the end of year	(100.42)	(46.34)	(48.29)	(48.29)	(48.29)	(51.09)	(60.19)

(b) Defined Contribution Plan        

Contribution to Defined Contribution plans, recognized in statement of profit and loss for the year is as under :

	For the Year ended 31st March, 2017 (Unit-I)		For the Year ended 31st March, 2017 (Unit-II)	For the Year ended 31st March, 2017	For the Year ended 31st March, 2016
Employer's Contribution to Provident Fund	77.82		77.82	107.33	77.82
Employer's Contribution to Pension Fund	37.78		37.78	49.81	37.78
Total defined Contribution	115.60		115.60	157.14	115.60

"The Company has defined benefit plans for Gratuity to eligible employees, the contributions for which are made to Life Insurance Corporation of India who invests the funds as per Insurance Regulatory Development Authority guidelines. The discount rate is based on the brvailing market yields of Government of Indias securities as at the balance sheet date for the estimated term of the obligations.

The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2016-17"

Note: 37 - Segment Reporting       

The primary and secondary reportable segments considered are Business Segments and Geographical Segments respectively.      

       

Primary Segment Information      

"The Company is a single business segment company engaged in the business of Bulk Drugs and the same is its primary segment.

Accordingly, no further financial information for Business Segments is given.

 "      

       

Secondary Segment Information      

For the purpose of geographical segment, the turnover is segregated based on the location of the customer and assets are segregated based on location of the assets.

Particulars			Year  Ended 31st March, 2017	Year  Ended 31st March, 2016
i) Segment Revenue
1. Revenue from Operations (Net)
(a) Within India			18,820.14	17,721.53
(b) Outside India
(i)  America			8,133.85	6,608.30
(ii) Others			4,651.23	2,960.56
Total Revenue from Operations (Net)			31,605.22	27,290.39
2. Other Income
(a) Within India			891.35	784.78
(b) Outside India			-	-
(i)  America			-	-
(ii) Others			-	-
Total Other Income			891.35	784.78
3. Total Segment Revenue
(a) Within India			19,711.49	18,506.31
(b) Outside India
(i)  America			8,133.85	6,608.30
(ii) Others			4,651.23	2,960.56
Total Segment Revenue			32,496.57	28,075.17

Particulars		As at 31st March,    2017	As at 31st March,    2016
ii) Segment Assets
(a) Within India		53,394.62	41,078.18
(b) Outside India
(i)  America		5,265.92	2,569.12
(ii) Others		1,713.87	1,203.56
Total Segment Assets		60,374.41	44,850.86
iii) Capital Expenditure
(a) Within India		8,674.71	6,789.95
(b) Outside India		-	-
(i)  America		-	-
(ii) Others		-	-
Total Capital Expenditure		8,674.71	6,789.95