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Notes to Accounts of Gujarat Themis Biosyn Ltd.

Mar 31, 2015

1. Term / Right attached to equity Share

The Company has only one class of equity shares having a par value of Rs.5/- per share (P.Y. Rs.5/- per share). Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

As per records of company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

a) Indian Rupee Loan from banks (secured) carries interest at base rate i.e. ranging from 10% p.a. to 10.25 % p.a. (previous year 10.25 % p.a.) Interest is payable at the end of each month. The original amount of loan was to be repaid in 84 monthly installments starting from October, 2007. The first 78 Installments were to be of Rs.13,33,000/- each and balance 6 installments were to be of Rs.19,29,000/-. Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, the outstanding amount of loan of Rs.5.12 crores is to be repaid in 84 equal monthly installments beginning from 1st November, 2011 i.e. Rs.6,10,000/- per month. The said loan is secured by equitable mortgage of factory premises at GIDC, Vapi & first charge on entire Plant & Machinery excluding those financed by other Financial Institution and also collateral security of Factory Premises at GIDC, Vapi, Valsad, Gujarat and Plant & Machinery. Further, personal guarantee of one of the Director and the Corporate Guarantee by Pharmaceutical Business Group (India) Ltd as on 31.03.2013 is given to the Company's Banker.

b) Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, Themis Medicare Limited (TML) - Promoters / Co-promoters has brought funds to meet the cost of the scheme in the form of non-interest bearing unsecured loan to the extent of Rs.3,50,00,000 irrespective of the provisions of Companies Act, 1956 or any other guidelines. Since, Themis Medicare Limited (TML) has been introduced as Promoters / Co-promoters & pursuant to rehabilitation scheme for revival of the company, these funds are of long term nature and accordingly the same are shown as non-current borrowing.

c) (i) Amount due as on 31st March, 2015 in respect of repayment of principal amount of Indian rupee term loan from Bank is Rs.6,10,000/- which is outstanding since less than 30 days [Previous year Rs.6,03,438/- outstanding since less than 30 days].

(ii) Amount due as on 31st March, 2015 in respect of payment of interest amount of Indian rupee term loan from Bank is Rs.1,91,619/- which is outstanding since less than 30 days [Previous year Rs.2,53,798/- outstanding since less than 30 days]. The above outstanding interest amounts are included in Interest accrued and due on borrowings under Note 8 on "Other Current Liabilities".

2. Deferred Tax Liability (Net)

Note: In accordance with the Accounting Standard (AS) -22 "Accounting for Taxes on Income" as prescribed under section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014, the Company has accounted for deferred taxation. As a matter of prudence, deferred tax assets on carried forward losses, unabsorbed depreciation and other assets have been recognised only to the extent of deferred tax liability.

Cash Credit from Bank (Secured) are repayable on demand and carries interest at (base rate 1% ) i.e. ranging 11% to 11.25 % p.a. (Previous year 11.25% p.a.) which is payable at the end of each month and are secured by hypothecation of book debts / receivables upto 120 days and collateral security of Factory Premises at GIDC, Vapi, Valsad, Gujarat and Plant & Machinery. Further, personal guarantee of one of the Director and the Corporate Guarantee by Pharmaceutical Business Group (India) Ltd as on 31.03.2013 is given to the Company's Banker.

a) The name of the Micro, Small & Medium Enterprises suppliers defined under "The Micro Small & Medium Enterprises Development Act, 2006 could not be identified, as the necessary evidence is not in the possession of the Company.

3. Margin money deposits given as security / Bank Guarantee:

Margin money deposits with a carrying amount of Rs.15,27,423/- (Previous year Rs.14,52,122/-) are to secure non-fund based inland letter of credit and Margin money deposit with a carrying amount of Rs.18,75,000/- (Previous year Rs.18,75,000/-) are to secure Bank Guarantee.

4. Disclosure under Revised Accounting Standard 15 on Employee Benefits:

Consequent to Accounting Standard 15 "Employee Benefits" (Revised 2005) becoming effective, the Company has made the provision for Defined Contribution Plan and Defined Benefit Plan.

A Defined Contribution Plan

During the year, the Company has recognized Rs. 15,99,174/- (Previous Year Rs. 15,96,407/-) towards Defined Contribution Plan Obligation.

B Defined Benefit Plan

a) Leave Encashment

Liability is computed on the basis of Leave Encashment benefit payable to all eligible employees at the rate of daily salary as per current accumulation of leave days, as per the Projected Unit Credit Method.

b) Gratuity

Liability is computed on the basis of Gratuity payable on death or resignation or on retirement, at attainment of superannuation age, with the qualifying salaries appropriately projected, as per the Projected Unit Credit Method. The disclosure of the same is as under.

5. Related party Disclosure

Disclosure requirement as per Accounting Standard 18 (AS-18) "Related Party Disclosure" notified under section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014.

Name of the Related Party Nature of relationship

M/s. Pharmaceutical Business Investing party of which the company Group (India) Limited (PBG) is an Associate

M/s. Themis Medicare Limited Investing party of which the company is an Associate

M/s. Vividhmargi Investment Holding Company of M/s. Pvt. Ltd. Pharmaceutical Business Group (India) Limited

M/s. Yuhan Corporation Venturer in Joint Venture

Mr. Rajneesh Anand Key Management Personnel (President & CEO of the Company till 6th August, 2014 & Technical & Management Consultant w.e.f. 7th August, 2014)

Mr. Tapas Guha Key Management Personnel (Chief Executive Officer (CEO) of the Company from 7th August, 2014)

Mr. Bharat A. Desai Key Management Personnel (Chief Financial Officer (CFO) of the Company from 17th March, 2015)

Mr. Vikas P Tarekar Key Management Personnel (Company Secretary of the Company from 2nd July, 2014)

6. Contingent Liabilities

31st March, 2015 31st March, 2014 (Rs.) (Rs.)

Contingent liabilities not provided for in respect of:

i) Income tax under dispute 12,463,599 12,463,599

ii) Fringe benefit tax under dispute 201,972 201,972

iii) Disputed Labour Dues 63,748,664 61,028,138

iv) Claim against the company not 5,484,301 5,484,301 acknowledged as debts

v) Bank Guarantee given by UBI to 12,500,000 12,500,000 DGVCL

7. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs. 25,97,309/- (Previous year Rs.2,48,788/-).

8. The outstanding balance as at 31st March, 2015, in respect of certain balances of trade receivables, deposits, loans & advances, liability for expenses, trade payables and creditors for capital expenditure are subject to confirmation and adjustments necessary upon reconciliation if any, consequential impact thereof in the financial statements is not ascertainable. The Management does not expect any material variation in the financial statements.

9. The Company has accumulated losses of Rs.10,37,05,584/- and negative net worth of Rs.78,53,651/- as at 31st March, 2015. Further, the Company also has a working capital deficiency. The Company is also a sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985, and in accordance with the provisions of section 15 (I) of the said Act. The Company has been registered with the Board for Industrial & Financial Reconstruction (BIFR). Further the Rehabilitation Scheme had been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) in the hearing held 12th January, 2012. The Company has initiated efforts including development of new products and has ventured into manufacturing of goods on own and on job work basis so as to reduce the losses. The Company has made a profit in current year and also in previous year. Accordingly, these accounts have been prepared on a going concern basis.

10. The Company is manufacturing Bulk Drugs on job work basis for others. Hence, there is no separate reportable segment as per Accounting Standard - 17 (AS-17) "Segment Reporting" notified under section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014.

11. In view of carry forward losses / unabsorbed depreciation of earlier years, company being a sick company and relief & concession granted by the BIFR, no provision for the Income Tax has been made on profit of the current year.

12. The Company's pending litigations comprise of claim against the Company and proceedings pending with Statutory and Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, whenever required and disclosed the contingent liabilities, whenever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position. (Refer Note No. 27 for details on Contingent Liabilities).

13. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

14. For the year ended March 31,2015, the company is not required to transfer any amount into the Investor Education & Protection Fund as required under relevant provisions of the Companies Act, 2013.

15. In the opinion of the Management, Current / Non-current Assets, Long term / Short term Loans & Advances are approximately of the value stated, if realized, in the ordinary course of business. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

16. During the year, one of the promoter M/s. Pharmaceutical Business Group (India) Ltd. has off loaded 14,23,000 equity shares of Rs.5/- each on 7th August, 2014 by way of an offer for sale through the stock exchange mechanism. As a result, the Company has achieved minimum public shareholding of 25% in compliance with SEBI order dated 28th March 2014. However, Hon'ble BIFR directed the Company vide its order dated 2nd January 2014, read with order dated 20th November 2013 to comply with the minimum public shareholding by way of issue of 18,96,000 fresh equity shares of face value of Rs.5/- each through public / right issue, for which the Company has filed miscellaneous application with BIFR to modify the said orders to the effect that the direction of issue of fresh equity shares is not necessary to be implemented. BIFR approval in this regard is awaited.

17. Previous year figures are regrouped and reclassified where ever necessary.


Mar 31, 2014

1 Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, during the previous financial year, w.e.f. 6th April 2012, Paid up Share Capital of the Company comprising of 1,16,00,000 Equity Shares of 10/- each fully paid up was reduced to 1,16,00,000 Equity Shares of Rs. 5/- each fully paid up by way of reduction in paid up value of each share by Rs. 5/- each aggregating to Rs. 5,80,00,000/- by adjusting against accumulated losses of the Company to that extent.

2 Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, during the previous financial year, on 15th May 2012, the Company had issued and allotted 29,28,702 equity shares of Rs. 5/- each fully paid up amounting to Rs. 1,46,43,510/- at a premium of Rs. 5/- per share amounting to Rs. 1,46,43,510/- aggregating to Rs. 2,92,87,020/- to Themis Medicare Ltd. (TML) (inducted as a co-promoter with an equity stake under Rehabilitation Scheme) for cash equivalent against the amount already invested for supply of capital equipment of Rs. 2,20,00,000/- and against advances of Rs. 72,87,020/-, in accordance with the terms of Scheme of Rehabilitation as approved by the BIFR under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012 and resolution passed at extra-ordinary general meeting on 6th April, 2012.

3. Term / Right attached to equity Share

The Company has only one class of equity shares having a par value of Rs. 5/- per share (P.Y. Rs. 5/- per share). Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

4. Details of shareholders holding more than 5% shares in the Company

As per records of Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

a) Indian Rupee Loan from banks (secured) carries interest at base rate presently 10.25 % p.a. (previous year 10.25 % p.a.) Interest is payable at the end of each month. The original amount of loan was to be repaid in 84 monthly instalments starting from October, 2007. The first 78 Instalments were to be of Rs.13,33,000/- each and balance 6 instalments were to be of Rs. 19,29,000/-. Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, the outstanding amount of loan of Rs. 5.12 crores is to be repaid in 84 equal monthly instalments beginning from 1st November, 2011 i.e. Rs. 6,10,000/- per month. The said loan is secured by charge on factory premises at GIDC, Vapi & first charge on entire Plant & Machinery excluding those financed by other Financial Institution. Further, secured by equitable mortgage of factory land & building & first charge of entire plant & machinery. Further, personal guarantee of one of the Director and the Corporate Guarantee by Pharmaceutical Business Group (India) Ltd to Company''s Banker to secure the loan is pending.

b) Pursuant to para 12.9 of Order dated January 12, 2012, the Hon''ble BIFR directed Gujarat Industrial Investment Corporation Ltd. (GIIC Ltd.) to accept principal amount of unsecured loan of Rs. 26,00,000/- in three equal yearly installments commencing from April 01, 2011 or alternatively the entire amount as would be decreed by the court will be payable by the Company before the end of the Scheme 2018. However upto 31st March 2013, as the GIIC had not communicated for repayment in three equal annual instalments, the same was treated as non-current borrowing. During the year, as per the communication received from GIIC Ltd., the Company has paid an amount of Rs. 31,00,000/- to GIIC Ltd. as full and final settlement payment towards their unsecured loan of Rs. 26,00,000/- & Rs. 5,00,000/- paid as compensation, in compliance with the BIFR order dated 12th January, 2012 and the same is shown as "Compensation paid to GIIC towards settlement of Loan" under the head "Finance Cost".

c) Pursuant to Scheme of Rehabilitation as approved by the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies (Special Provision) Act, 1985 on 12th January 2012, Themis Medicare Limited (TML) - Promoters / Co-promoters has brought funds to meet the cost of the scheme in the form of non-interest bearing unsecured loan to the extent of Rs. 3,50,00,000/- irrespective of the provisions of Companies Act, 1956 or any other guidelines. Since, Themis Medicare Limited (TML) has been introduced as Promoters / Co-promoters & pursuant to rehabilitation scheme for revival of the Company, these funds are of long term nature and accordingly the same are shown as non-current borrowing.

d) (i) Amount of continuing default as on 31st March, 2014 in respect of repayment of principal amount of Indian rupee term loan from Bank is Rs. 6,03,438/- (Previous year Rs. 6,10,000/-) outstanding since less than 30 days.

(ii) Amount of continuing default as on 31st March, 2014 in respect of payment of interest amount of Indian rupee term loan from Bank is Rs. 2,53,798/- outstanding since less than 30 days [Previous year Rs. 3,11,478/- outstanding since less than 30 days]. The above outstanding interest amounts are included in Interest accrued and due on borrowings under Note 8 on "Other Current Liabilities".

Note: In accordance with the Accounting Standard (AS) -22 "Accounting for Taxes on Income" notified under Companies (Accounting Standard) Rules, 2006, (as amended), the Company has accounted for deferred taxation. As a matter of prudence, deferred tax assets on carried forward losses, unabsorbed depreciation and other assets have been recognised only to the extent of deferred tax liability.

a) Cash Credit from Bank (Secured) are repayable on demand and carries interest at base rate 1% presently @ 11.25 % p.a. (Previous year 11.25% p.a.) which is payable at the end of each month and are secured by labour bills drawn on Artemis Biotech (a division of Themis Medicare Ltd.), hypothecation of all stocks of consumable stores, book debts and such other movable property of any kind belonging to the Company. Further secured by equitable mortgage of immovable properties (by the deposit of title deeds in favour of the bank) together with all buildings and structure erected/constructed thereon, existing or future, and/or fixed plant and machinery located at Vapi (Gujarat). Further, personal guarantee of one of the Director and the Corporate Guarantee by Pharmaceutical Business Group (India) Ltd to Company''s Banker to secure the loan is pending.

b) Outstanding balance as at 31st March, 2013 in respect of Loan from Lupin Limited is a returnable non-interest bearing loan and is repayable against 50% of the "Conversion Charges" for each invoice raised by till such time the loan is recovered in full. As, the Company does not have an unconditional right to defer the settlement of the liability for at least twelve months after the reporting date, the said loan has been classified as short term borrowing. The loan is secured against hypothecation of the equipments purchased availing the loan as and by way of first charge to Lupin Ltd and at the plant of the Company ("Property") by hypothecation / mortgage of the same as and by way of a first charge upon the Property to Lupin Ltd. However, the Company is in the process to create the necessary charges to hypothecate the equipments.

c) Amount of continuing default as on 31st March, 2014 in respect of payment of interest amount of Cash Credit from Bank is Rs. Nil/- [Previous year Rs. 1,61,920/- outstanding since less than 30 days]. The above outstanding interest amounts are included in Interest accrued and due on borrowings under Note 8 on "Other Current Liabilities".

a) The name of the Micro, Small & Medium Enterprises suppliers defined under "The Micro Small & Medium Enterprises Development Act, 2006 could not be identified, as the necessary evidence is not in the possession of the Company.

Margin money deposits given as security / Bank Guarantee:

Margin money deposits with a carrying amount of Rs. 14,52,122/- (Previous year Rs. 13,60,734/-) are to secure non-fund based inland letter of credit and Margin money deposit with a carrying amount of Rs. 18,75,000/- (Previous year Rs. Nil/-) are to secure Bank Guarantee.

Employee benefits expense for the year ended 31st March, 2014 includes amount of Rs. 1,00,000/- towards full & final settlement to two ex-workers who had left the organization long back.

Note: Hitherto, disposal charges for removal of waste material was being accounted as and when the material was removed from the factory premises however during the year the same is accounted when the said waste material arises during the conversion process. As a result there is an increase in disposal charges by Rs. 23,71,542/- however as the said charges are recovered from the Lupin Limited as conversion charges towards overhead recovery therefore there is no impact on the statement of profit and loss.

5 Pursuant to para 12.9 of Order dated January 12, 2012, the Hon''ble BIFR directed Gujarat Industrial Investment Corporation Ltd. (GIIC Ltd.) to accept principal amount of unsecured loan of Rs. 26,00,000/- in three equal yearly installments commencing from April 01, 2011 or alternatively the entire amount as would be decreed by the court will be payable by the Company before the end of the Scheme 2018. However upto 31st March 2013, as the GIIC had not communicated for repayment in three equal annual instalments, the same was treated as non-current borrowing. During the year, as per the communication received from GIIC Ltd., the Company has paid an amount of Rs.31,00,000/- to GIIC Ltd. as full and final settlement payment towards their unsecured loan of Rs. 26,00,000/- & Rs. 5,00,000/- paid as compensation and the same is shown as "Compensation paid to GIIC towards settlement of Loan" under the head "finance cost".

6 Disclosure under Revised Accounting Standard 15 on Employee Benefits:

Consequent to Accounting Standard 15 "Employee Benefits" (Revised 2005) becoming effective, the Company has made the provision for Defined Contribution Plan and Defined Benefit Plan.

A Defined Contribution Plan

During the year, the Company has recognized Rs.15,96,407/- (Previous Year Rs.15,48,009/-) towards Defined Contribution Plan Obligation.

B Defined Benefit Plan

a) Leave Encashment

Liability is computed on the basis of Leave Encashment benefit payable to all eligible employees at the rate of daily salary as per current accumulation of leave days, as per the Projected Unit Credit Method.

b) Gratuity

Liability is computed on the basis of Gratuity payable on death or resignation or on retirement, at attainment of superannuation age, with the qualifying salaries appropriately projected, as per the Projected Unit Credit Method. The disclosure of the same is as under.

7 Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs. 2,48,788/- (Previous year Rs. Nil/-).

8 The outstanding balance as at 31st March, 2014, in respect of certain balances of trade receivables, deposits, loans & advances, liability for expenses, trade payables and creditors for capital expenditure are subject to confirmation and adjustments necessary upon reconciliation if any, consequential impact thereof in the financial statements is not ascertainable. The Management does not expect any material variation in the financial statements.

9 The Company has brought forward losses of Rs. 19,45,11,078/- which has resulted in negative net worth of Rs. 5,33,99,635/- as at 31st March, 2014. Further, the Company also has a working capital deficiency. The Company is also a sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985, and in accordance with the provisions of section 15 (I) of the said Act. The Company has been registered with the Board for Industrial & Financial Reconstruction (BIFR). Further the Rehabilitation Scheme had been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) in the hearing held 12th January, 2012. The Company has initiated efforts including development of new products and has ventured into manufacturing of goods on own and on job work basis so as to reduce the losses. The Company has made a profit in current year and also in previous year. Accordingly, these accounts have been prepared on a going concern basis.

10 The Company is manufacturing Bulk Drugs on job work basis for others. Hence, there is no separate reportable segment as per Accounting Standard - 17 (AS-17) "Segment Reporting" by as notified by Companies (Accounting Standards) Rules 2006.

11 In view of carry forward losses / ubabsorbed depreciation of earlier years, no provision for the Income Tax has been made on profit of the current year.

12 During the year, the Company has made an overhead recovery in respect of job work done in earlier year amounting to Rs. 22,50,000/- which has been included in net sales/income from operations.

13 The Company''s 1,45,28,702 Equity Shares of Rs. 5/- each listed on Ahmedabad Stock Exchange Limited (ASEL) are delisted with effect from January 22, 2014.

14 In the opinion of the Management, Current / Non-current Assets, Long term / Short term Loans & Advances are approximately of the value stated, if realized, in the ordinary course of business. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

15 Currently, the Company has 15.21% Public shareholding. Hon''ble BIFR vide its order dated November 20, 2013 has allowed the extension of time by 270 days from the date of this order i.e. upto August 17, 2014, subject to "no objection" of SEBI. "Securities and Exchange Board of India" (SEBI) also vide its letter dated April 1, 2014 has extended the time limit of increasing the Company''s public shareholding to the minimum 25% as stipulated under rule 19A of the "Securities Contracts (Regulation) Rules, 1957" (SCRR) till August 19, 2014.

16 Previous year figures are regrouped and reclassified where ever necessary.


Mar 31, 2013

1 Disclosure under Revised Accounting Standard 15 on Employee Benefits:

Consequent to Accounting Standard 15 "Employee Benefits" (Revised 2005) becoming effective, the Company has made the provision for Defined Contribution Plan and Defined Benefit Plan.

A Defined Contribution Plan

During the year, the Company has recognized Rs. 15,48,009/- (Previous Year Rs. 10,08,726/-) towards Defined Contribution Plan Obligation.

B Defined Benefit Plan

a) Leave Encashment

Liability is computed on the basis of Leave Encashment benefit payable to all eligible employees at the rate of daily salary as per current accumulation of leave days, as per the Projected Unit Credit Method.

2 Contingent Liabilities

31st March, 2013 31st March, 2012 In Rs In Rs

Contingent liabilities not provided for in respect of:

i) Letter of credit in respect of purchases, outstanding at the year-end 325,710 106,047

ii) Income tax under dispute 9,228,729 1,220,952

iii) Fringe benefit tax under dispute 201,972 201,972

iv) Disputed Labour Dues 53,773,056 44,638,168

v) Claim of interest on unsecured Loan from Gujarat Industrial Investment 11,729,277 11,261,277

Corporation (GIIC)

vi) Claims against the company not acknowledged as debts 6,235,519 6,589,780

3 Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs. Nil (Previous year Rs. 1,04,829/-).

4 The outstanding balance as at 31st March, 2013, in respect of certain balances of trade receivables, deposits, loans & advances, long term borrowings, liability for expenses, trade payables and creditors for capital expenditure are subject to confirmation and adjustments necessary upon reconciliation if any, consequential impact thereof in the financial statements is not ascertainable. The Management does not expect any material variation in the financial statements.

5 The Company has brought forward losses of Rs.26,32,08,796 which has resulted in negative net worth of Rs.9,86,59,145 as at 31st March, 2013. Further, the Company also has a working capital deficiency. The Company is also a sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985, and in accordance with the provisions of section 15 (I) of the said Act. The Company has been registered with the Board for Industrial & Financial Reconstruction (BIFR). Further the Rehabilitation Scheme had been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) in the hearing held 12th January, 2012. The Company has initiated efforts including development of new products and has ventured into manufacturing of goods on own and on job work basis so as to reduce the losses. The Company has made a profit in current year and also in previous year. Accordingly, these accounts have been prepared on a going concern basis.

6 The Company is manufacturing Bulk Drugs for its own and on job work basis for others. Hence, there is no separate reportable segment as per Accounting Standard -17 (AS-17) "Segment Reporting" by as notified by Companies (Accounting Standards) Rules 2006.

7 In view of carry forward losses / unabsorbed depreciation of earlier years, no provision for the Income Tax has been made on profit of the current year.

8 In the opinion of the Management, Current / Non-current Assets, Long term / Short term Loans & Advances are approximately of the value stated, if realized, in the ordinary course of business. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

9 Previous year figures are regrouped and reclassified where ever necessary.


Mar 31, 2012

1 Disclosure under Revised Accounting Standard 15 on Employee Benefts:

Consequent to Accounting Standard 15 "Employee Benefts" (Revised 2005) becoming effective, the Company has made the provision for Defned Contribution Plan and Defned Beneft Plan.

A Defned Contribution Plan

During the year, the Company has recognized Rs.10,08,726/- (Previous Year Rs. 10,91,244/-) towards Defned Contribution Plan Obligation.

B Defned Beneft Plan

A) Leave Encashment

Liability is computed on the basis of Leave Encashment beneft payable to all eligible employees at the rate of daily salary as per current accumulation of leave days, as per the Projected Unit Credit Method.

2 Contingent Liabilities 2011-12 2010-11

In Rs In Rs

Contingent liabilities not provided for in respect of:

I) Letter of credit in respect of purchases, outstanding at the year-end 106,047 4,071,198

II) Income tax under dispute 1,220,952 1,807,387

III) Fringe beneft tax under dispute 201,972 201,972

IV) Disputed Labour Dues 44,638,168 37,903,835

V) Claim of interest on unsecured Loan from Gujarat Industrial Investment 11,261,277 10,793,277 Corporation (GIIC)

VI) Claim made by an ex-employee pending with Valsad Civil Court - 464,765 [including interest of Rs.Nil (P.Y Rs.1,95,556)]

VII) Claim made by an supplier pending with Vadodra Civil Court 548,816 465,098 [including interest of Rs.4,40,538 (P.Y Rs.3,56,820)]

3 Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs.1,04,829/- (Previous year Rs.12,73,533 /-).

4 The outstanding balance as at 31st March, 2012, in respect of certain balances of trade receivables, deposits, loans & advances, long term borrowings, liability for expenses, trade payables and creditors for capital expenditure are subject to confrmation and adjustments necessary upon reconciliation if any, consequential impact thereof in the fnancial statements is not ascertainable. The Mangement does not expect any material variation in the fnancial statements.

5 (a) The Company is a sick industrial Company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Rehabilitation Scheme formulated for revival of the Company has been sanctioned by the BIFR at the hearing held on 12th January, 2012 and the BIFR order has been issued to the Company on 1st March, 2012. However pending the necessary consent / formalities with statutory authorities and stock exchanges as at 31st March, 2012, adjustments with regard to effect of the directions as contained in the scheme approved by the order of BIFR including the effect of reduction in equity share capital and issue of further equity shares have been given subsequent to the balance sheet date, except that the Company has already accounted during the year, for the relief of interest amounting to Rs.1,33,75,163 given by the operating Agency, Union Bank of India on account of reduction in interest rate from 1st October, 2008, the cutoff date from which the Company is declared as sick unit, to 30th September, 2011 (Rs.1,20,43,280 for the period from 1st October, 2008 to 31st March, 2011 which is shown as an exceptional item and Rs.13,31,883 for the period from 1st April, 2011 to 30th September, 2011 which is credited to fnance cost) and write back of unsecured loan of Rs.3,95,10,377 in terms of the approved scheme & consent for waiver by promoter Company "Yuhan Corporation" for repayment of unsecured loan of Rs.3,95,10,377 which has been shown as income under the head exceptional item.

(b) Other releif and concessions as provided in Rehabilitation Scheme sanctioned by the BIFR at the hearing held on 12th January 2012, are as under.

(i) Income tax department to consider relief u/s. 41(1) i.e. additions not to consider write back of liabilities / no longer considered payable, exemption from Minimum Alternate Tax (MAT) till the total loss is adjusted, to allow relief u/s.

72 for carry forward of losses beyond 8 years and until the earlier of their absorption against taxable income in future years, to consider waiver of penalty imposed.

(ii) Securities and Exchange Board of India to grant of exemption from opertaions / applicability of regulations 7, 10, 11 and 12 of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations 1997.

(iii) Bombay Stock Exchange to allow continued listing of the Company's shares on the BSE post share capital restructuring, to consider automatic listing of additional shares.

(iv) Registrar of Companies (ROC) to consider waiver of fee payable to ROC, Gujarat in respect of increase in authorized share capital as and when contemplated.

(v) The Company may exercise the option of revaluing the land and writing off accumulated book losses to that extent with the permission of BIFR.

(vi) Promoters / Co-promoters to bring in funds to meet the cost of the scheme in the form of unsecured loan to the extent of Rs.3,50,00,000 irrespective of the provisions of Companies Act, 1956 or any other guidelines.

6 The Company has brought forward losses of Rs.27,90,76,856 which has resulted in negative net worth of Rs.13,86,43,883 as at 31st March, 2012. Further, the Company also has a working capital defciency. The Company is also a sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985, and in accordance with the provisions of section 15 (I) of the said Act. The Company has been registered with the Board for Industrial & Financial Reconstruction (BIFR). Further the Rehabilitation Scheme has been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) in the hearing held 12th January, 2012. The Company has initiated efforts including development of new products and has ventured into manufacturing of goods on own and on job work basis so as to reduce the losses. Accordingly these accounts have been prepared on a going concern basis.

7 The Company is manufacturing Bulk Drugs for its own and on job work basis for others. Hence, there is no separate reportable segment as per Accounting Standard - 17 (AS-17) "Segment Reporting" as notifed by Companies (Accounting Standards) Rules 2006.

8 In view of carry forward losses of earlier years as per Income Tax, no provision for the Income Tax has been made on proft of the current year.

9 In the opinion of the Management, Current / Non-current Assets, Long term / Short term Loans & Advances are approximately of the value stated, if realized, in the ordinary course of business. The provision for all known and determined liability is adequate and not in the excess of the amount reasonably required.

10 During the year ended 31st March, 2012, the Revised schedule VI notifed under The Companies Act 1956, has become applicable to the Company, for presentation and preparation of its fnancial statement. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of fnancial statements. However, it has signifcant impacts on presentation and disclosure made in the fnancial statements. The Company has also reclassifed the previous year fgure in accordance with the requirements applicable in the current year.


Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

a) Letter of credit in respect of purchases, outstanding at the year end amounting to Rs.69,05,144/- (Previous year Rs.3,38,590/-). The same is secured against purchases of Coal and Raw Materials and pledge of Bank Deposit.

b) Income tax demand under dispute amounting to Rs.20,99,053/- (Previous year Rs. 16,03,518/-).

c) Disputed Labour Dues estimated at Rs.3,11,41,191/- (Previous year Rs.3,11,21,159/-)

d) Contingent Liability in respect of claim of interest on Unsecured Loan from Gujarat Industrial Investment Corporation (GIIC) amounting to Rs. 1,03,25,277/- (Previous Year Rs. 98,57,277/-)

e) Contingent Liability in respect of Claim of Rs.4,40,537/- (Previous Year 4,16,308/-) including interest @ 9% p.a. Rs.1,73,128/- (Previous Year Rs. 1,47,099/-) made by an ex-employee is pending with Valsad Civil Court.

2. EMPLOYEE BENEFITS

Consequent to Accounting Standard- 15-"Employee Benefits" (Revised 2005) becoming effective, the Company has made the provision for Defined Contribution Plan and Defined Benefit Plan.

I. Defined Contribution Plan:

During the year the Company has recognised Rs.9,20,340/- towards Defined Contribution Plan Obligation.

II. Defined Benefit Plan:

The Present value of obligations for gratuity and leave encashment are determined based on Actuarial Valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs.31,21,984 /- (Previous year - Rs.NIL /-).

4. As per the foreign collaboration agreement entered with M/s Yuhan Corporation, the royalty to M/s Yuhan Corporation is payable for first 10 profitable years on the basis of the ex-factory cost of production of Rifampicin. Since, the Company has not produced Rifampicin and has incurred losses in the current year, no provision in the books of account for royalty payable to M/s Yuhan Corporation has been made.

5. The Company has incurred losses of Rs. 1,08,34,838/- during the current year and has brought forward losses of Rs.235,473,998/- which has resulted in negative net worth of Rs. 12,17,43,923/- as at 31st March, 2010. Further, the Company also has a working capital deficiency. The Company is also a sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act 1985, and in accordance with the provisions of section 15 (I) of the said act. The Company has been registered with the Board for Industrial & Financial Reconstruction (BIFR). BIFR has appointed Union Bank of India as the Operating Agency (OA). The Company has initiated efforts including development of new products and has ventured into manufacturing of goods on job work basis and is hopeful of working out an acceptable revival strategy with BIFR, arresting these losses and turning around the operations in the coming years. Accordingly, these accounts have been prepared on a going concern basis.

6. The management is in the process of preparing the proper records of the fixed Assets showing the full particulars including quantitative details and situation of fixed Assets. Further during the year no physical verification of the Fixed Assets has been done and therefore discrepancies between book records and physical availability could not be ascertained. However in the opinion of the management that there will be no material discrepancies between Fixed Assets records as per books and its physical availability.

7. a) The outstanding balance as at 31st March, 2010 in respect of some of the Sundry Debtors, Deposits, Loans & Advances and Sundry Creditors are subject to confirmation from respective parties and consequential reconciliation/ adjustments arising there from, if any. The management however does not expect any material variation.

b) In the opinion of the Management, no item of Current Assets, Loans & Advances has a value on realization in the ordinary course of business, which is less than the amount at which it is stated in the Balance Sheet, unless otherwise specified.

8. During the year, the company has reviewed its fixed assets for impairment loss as required by Accounting Standard 28 "Impairment of Assets". In the opinion of the management no provision for impairment loss is considered necessary.

9. Gujarat Industrial Investment Corporation (GIIC) has filed a suit against the Company in City Civil Court in respect of interest on an unsecured loan of Rs 26,00,000/- taken by the Company in the year 1985-86 on the basis of Memorandum of Understanding (MOU), the total interest claimed by GIIC is Rs.93,11,277/-. The accumulated interest upto 31st March 2010 is Rs. 1,03,25,277/-. However the Company has disputed the said amount of interest claim on the ground that as per the resolution passed by the GIICs Board dated 18.07.1985 the said loan would not attract interest until the Company declares any dividend and the MOU was subject to approval by Industrial Development Bank of India (Lead Financial Institution). The Company has not declared any dividend from the date of taking the said loan. Further as per the scheme finalized by BIFR the said loan, being subordinated to the dues of the Banks and Financial Institutions would be repaid only after clearing the dues of banks and of the financial institutions, as GIIC is also a promoter of the Company.

In view of the above no provision has been considered necessary by the management in respect of the said claim of interest and the same has been disclosed as contingent liability.

10. In view of loss for the year no provision for the Income Tax has been made.

11. The Company is manufacturing Bulk Drugs on job work basis for others. Hence, there is no separate reportable segment as per Accounting Standard-17 (AS-17) issued by the Institute of Chartered Accountants of India.

12. Related party transaction:

A. Name of the Related Party and Nature of the Related Party Relationship:

a) Joint Venture Company : Yuhan Corporation

b) Associate Company : Pharmaceutical Business Group (India) Ltd.

c) Holding Company of : Vividhmargi Investment Pvt. Ltd Associate Company

d) Key Management Personnel : Mr.- Rajneesh Anand



Above mentioned related parties are identified by the management as per Accounting Standard (AS)- 18 " Related Party Transaction" issued by the Institute of Chartered Accountants of India and relied upon by the auditors.

13. a) In accordance with the Accounting Standard (AS) -22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has accounted for deferred taxation. Though the Company has significant amount of carried forward losses and unabsorb.ed depreciation, as a matter of prudence deferred tax assets have been recognised only to the extent of deferred tax liability.

14. During the year the Company had undertaken an exercise for reviewing old outstanding balances of Sundry Creditors and provisions. Based on the review, the Company has written back sundry credit balances of Rs.35,18,539/- (Previous year Rs.1,80,813/-).

15. Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956.

16. Previous years figures have been regrouped / rearranged / recasted wherever necessary.