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Notes to Accounts of Kopran Ltd.

Mar 31, 2016

a) Terms / Rights attached to equity shares

The Company has only one class of equity shares having a par value of ''10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

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.

b) Terms of redemption of preference shares

55,80,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of '' 10 each are redeemable at par on 15th March, 2025 or at any time after one year from 31st March, 2012 at the option of the company.

10.00.000 10% Non Convertible Non Cumulative Redeemable Preference Shares of '' 10 each are redeemable at par on 28th June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

20.00.000 10% Non Convertible Non Cumulative Redeemable Preference Shares of '' 10 each are redeemable at par on 22nd June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

c) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

None of the shares of the Company are held by the subsidiaries, associates or joint ventures of the Company.

(a) Term loans from banks include term loan of Rs.96,23,575/-(Balance Outstanding) which carries interest base rate 3.50% p.a. and is repayable in 8 equal quarterly installments of Rs. 75 lacs from june, 2014, and Last Installment of '' 50 lacs. Current maturities of Rs.96,23,575/- have been shown under current liabilities. The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari-passu basis.

(b) Vehicle finance loans carry interest @ 10.73 to 12.40 % p.a. and is repayable in 35 to 40 equal monthly installments. The loans are secured by hypothecation of vehicles.

(c) * Loans from others carries Interest @ 13.75% p.a. and is repayable in 11 equal quarterly Installments of Rs.159 Lacs from October, 2016 and last installment Rs. 151 Lacs. The loan is secured by personal guarantee and mortgage / pledge of certain assets of promoters and directors.

Cash credit / packing credit facilities availed from banks are secured by hypothecation of inventories and book debts (present and future) also second charge by way of mortgage on all immoveable properties and by way of hypothecation on all the moveable fixed assets of the company both present and future and guaranteed by director / promoter jointly and severally. The said facility is repayable on demand.

"The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"), hence disclosures required to be made under the act has not been given.”

1) Estimated amount of contracts remaining to be executed on capital account not provided for Rs.4,60,25,078/- (Previous year Rs.51,28,701/-)

B) Defined Benefit plan

The employees’ gratuity scheme is a defined benefit plan. The present value of obligation is 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. The obligation for leave encashment is recognized in the same manner.

2) The disclosure as per Accounting Standard 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India:

(a) Business Segment:

For the year 2015-16:

During the year, the Company was primarily engaged in Pharmaceutical business and there were no other reportable business segments.

Note 1: During the year, consumer care division was sold for a consideration of '' 2,00,00,000/- with effect from 1st April, 2015, carrying amount of net assets in respect of such division was '' 1,97,93,919/- (Refer Note 33 for details)

Note 2: Fixed assets used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities are made.

3) The company has unabsorbed depreciation and carry forward of losses under income tax laws. Hence deferred tax assets have not been recognized as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable income against which such differed tax assets can be realized.

4) During the previous year, the Company revised its accounting policy in respect of depreciation method on tangible assets, other than factory building and plant and machinery, from ‘written down value method’ to ‘straight line method’ over the expected useful life of the assets. The management is of the opinion that this change in accounting policy would result in a more appropriate presentation of the financial statements. As a result of this change, depreciation was calculated retrospectively on straight line method and accordingly the Company recorded reversal of depreciation expense amounting to Rs.2,63,04,366 /- pertaining to earlier years in the previous year''s statement of profit & loss (also refer Note no 10).

5) DISCONTINUING OPERATIONS

During the year, pursuant to the agreement with Kopran Lifestyle Limited on 8th August, 2015, the Company transferred its Consumer Care Division for a consideration of Rs.2 Crores, on a slump sale basis to Kopran Lifestyle Limited with effect from 1st April, 2015.

During the previous year, pursuant to the agreement with Kopran Research Laboratories Limited ("the Subsidiary Company") on 25th March, 2015, the Company transferred its Mahad Undertaking (''Active Pharmaceutical Ingredients business''), which was a part of pharmaceutical segment, to the subsidiary company on a slump sale basis for a consideration of Rs.110 Crores on closing date 31st March, 2015.

6) In the opinion of the board, current assets and loans and advances are approximately of the value stated if realised in the ordinary course of business. The provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required. The Balances of few creditors are subject to their confirmation.

7) a) The Company has taken office premises on operating lease basis. Lease payments in respect of such lease recognized in statement of profit and loss account is Rs.2,40,00,000/- (Previous year Rs.2,51,77,676/-)

8) The Company has investment of Rs.15490.60 lacs in equity shares of Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the Company, the accumulated losses of KRLL as on 31st March, 2016 are Rs.5580.89 lacs. During the previous year, the Company transferred, on slump sale basis, a running business unit of API (bulk drugs), which is a profitable business. The investment in the said subsidiary is strategic and long term. In view of the above, the management believes that sufficient profit will be generated in future with API business and hence is of the opinion that no provision is required in respect of the said investment.

9) Payment of Bonus Act,1965 has been amended during the year, enhancing the limit of entitlement of employee to whom the act becomes applicable with retrospective amendment w.e.f 01/04/2014 , High Court of various states have stayed the retrospective application of the act w.e.f 01/04/2014. Accordingly, the company relying upon the said stay has implemented the revised Act, w.e.f 01/04/2015

Additional liability, if any, on the retrospective amendment will be provided in the year of final decision by the courts.

10) PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/reclassified wherever necessary. Due to the two discontinuing business operation (refer note 33), previous year figures are not comparable.


Mar 31, 2015

A) Terms / Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

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.

b) Terms of redemption of preference shares

55,80,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10/- each are redeemable at par on 15th March, 2025 or at any time after one year from 31st March, 2012 at the option of the company.

10.00. 000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10/- each are redeemable at par on 28th June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

20.00. 000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10/- each are redeemable at par on 22nd June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

c) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

None of the shares of the Company are held by the subsidiaries, associates or joint ventures of the Company.

(a) Term loans from banks include term loan of Rs. 66,45,713/- (Balance outstanding) which carries interest base rate 3.50% p.a. and is repayable in 10 equal quarterly installments of Rs. 50 lacs from June, 2013. Current maturities of Rs. 66,45,713/- have been shown under current liabilities. The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari-passu basis.

(b) Term loans from banks include term loan of Rs. 3,15,87,503/-(Balance outstanding) which carries interest base rate 3.50% p.a. and is repayable in 8 equal quarterly installments of Rs. 75 lacs from June, 2014 and last installment of Rs. 50 lacs. Current maturities of Rs. 3,00,00,000/- have been shown under current liabilities. The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari- passu basis.

(c) Vehicle finance loans carry interest @ 10.73 to 12.40 % p.a. and is repayable in 35 to 40 equal monthly installments. The loans are secured by hypothecation of vehicles.

(d) * Loans from others carries Interest @ 13.50% p.a. and is repayable in 10 equal quarterly installments from December,2013. The loan is secured by personal guarantee and mortgage/ pledge of certain assets of promoters and directors

*Cash credit / packing credit facilities availed from banks are secured by hypothecation of inventories and book debts (present and future) also second charge by way of mortgage on all immoveable properties and by way of hypothecation on all the moveable fixed assets of the company both present and future and guaranteed by director / promoter jointly and severally. The said facility is repayable on demand.

"The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"), hence disclosures required to be made under the act has not been given."

2) CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

As on 31st As on 31st March, 2015 March, 2014

i) Guarantees given by the company''s bankers on behalf of the company 1,02,17,238 1,69,59,099

ii) Bills discounted with banks 51,58,80,825 43,28,85,659

iii) Disputed tax matters

a) Service tax demand disputed in appeal 38,99,000 34,04,819

b) Excise duty demand disputed in appeal 27,05,152 38,69,299

c) Demand under drug price control order - 95 ( DPCO - 95 ) demand disputed in appeal 5,91,34,474 5,91,34,474

3) EMPLOYEE BENEFITS :

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the standard, the following disclosures are made :

4) The company has unabsorbed depreciation and carried forward loss under income tax laws. Hence deferred tax assets have not been recognised as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable income against which such deffered tax assets can be realised.

5) During the current year, the Company has revised its accounting policy in respect of depreciation method on tangible assets, other than factory building and plant and machinery, from ''written down value method'' to ''straight line method'' over the expected useful life of the assets. The management is of the opinion that this change in accounting policy would result in a more appropriate presentation of the financial statements. As a result of this change, depreciation has been calculated retrospectively on straight line method and accordingly the Company has recorded reversal of depreciation expense amounting to Rs. 2,63,04,366 /- pertaining to previous years in the current year''s statement of profit & loss (also refer note no 10).

The Company has also revised the estimate useful life of assets, except plant and machinery, as prescribed in schedule II of the Companies Act, 2013. The carrying value of assets where the remaining useful life was determined to be nil as on April 1,2014 has been fully depreciated during the year and an amount of Rs. 2,66,95,100/- has been adjusted against the opening balance of profit and loss account in the balance sheet under reserves and surplus.

Consequent to the above changes, the depreciation expense in the statement of profit and loss for the year is lower by Rs. 85,87,580/- (excluding depreciation written back in respect of previous year).

6) Discontinuing operations

During the year, pursuant to the agreement with Kopran Research Laboratories Limited ("the Subsidiary Company") on 25th March, 2015, the Company has transferred its Mahad Undertaking (''Active Pharmaceutical Ingredients business''), which is a part of pharmaceutical segment, to the subsidiary company on a slump sale basis for a consideration of Rs. 110 Crores on closing date 30th March, 2015.

7) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Enterprises owned or controlled (Wholly Owned Subsidiaries)

Kopran Research Laboratories Limited Kopran (H.K) Limited Kopran Lifesciences Limited

II) Key Managerial Personnels (KMP)

Shri Surendra Somani - Executive Vice Chairman Shri Ajit Jain -Director and Chief Operating Officer

III) Relatives of Key Managerial Personnels (with whom there are transactions)

Shri Ayush Jain

IV) Enterprises significantly influenced by KMP or their relatives (with whom there are transactions)

Oricon Enterprises Limited Kopran Laboratories Limited Shinrai Auto Services Limited

8) a) The Company has taken certain office/factory premises on operating lease basis. Lease payments in respect of such leases recognised in statement of profit and loss account Rs. 2,51,77,676/- (Previous year Rs. 2,05,64,605/-)

b) Except for escalation contained in certain lease arrangements providing for increase in the lease payment by specified percentage / amounts after completion of specified period. Further the lease terms do not contain any exceptional / restrictive covenants other than prior approval of the leasee before the renewal of lease.

c) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lesser is required for further leasing. There is no contingent rent payment.

9) The Company has made an investment of Rs. 4490.61 lacs and has also advanced a sum of Rs. 81.27 lacs to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the Company, the accumulated losses of KRLL as on 31 March, 2015 are Rs.5216.04 lacs. During the year, Company has transferred, on slump sale basis a running business unit of API (bulk drugs), which is a profitable business. The investment in the said subsidiary is strategic & long term. In view of the above, the management believes that sufficient profit will be generated in future with API business and hence is of the opinion that no provision is required in respect of the said investment and advance.

10) PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/ reclassified wherever necessary.


Mar 31, 2014

1) CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

As on 31st As on 31st March, 2014 March, 2013 i) Guarantees given by the company''s bankers on behalf of the company 1,69,59,099 1,19,49,698

ii) Bills discounted with banks 43,28,85,659 45,14,13,635 iii) Disputed tax matters

a) Service tax demand disputed in appeal 34,04,819 32,95,000

b) Excise duty demand disputed in appeal 38,69,299 43,88,272

c) Demand under drug price control order -95 (DPCO - 95 ) demand disputed in appeal 5,91,34,474 5,91,34,474

2) Estimated amount of contracts remaining to be executed on capital account not provided for Rs. 1,09,17,451/- ( Previous year Rs. 23,93,185/- )

3) EMPLOYEE BENEFITS :

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made :

4) The company has unabsorbed depreciation and carry forward of losses under Income tax laws. Hence deferred tax assets have not been recognised as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable income against which such deferred tax assets can be realised.

5) The Company has made an investment of Rs. 5,00,60,750/- and has also advanced a sum of Rs. 47,29,01,907/- to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the company, for research and development (R & D) activities. The accumulated losses of KRLL has exceeded its paid up capital and reserves. The said subsidiary has been awarded numerous patents in India and abroad for its novel Anti-Ulcer molecule KNC-6 and other molecule KNC-1206. KRLL has also developed enteric coating technology and has also been awarded Indian Patent for novel process of synthesis of Rofecoxib and Sildenafil Citrate. KRLL has, vide an agreement, agreed to give the company the right to exploit the patents, intellectual properties and all rights appurtenant thereto in any manner so as to recover the dues- current and future.

Considering that the investments are strategic and for long term the provision for diminution in value has not been considered necessary by the management.

6) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Wholly Owned Subsidiary

a) Kopran Research Laboratories Ltd.

b) Kopran (H.K) Ltd.

c) Kopran Lifesciences Ltd.

II) Key Management Personnel

Shri Surendra Somani - Executive Vice Chairman Shri Ajit Jain -Director and Chief Operating Officer

III) The Company has entered into transactions with related parties as listed below during the period under consideration. Full disclosure has been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties. Details of transactions, with related parties are as follows :

Note:Remuneration paid to Mr. Ajit Jain, executive director and COO exceeds the prescribed limit as prescribed under schedule XIII to the Companies act,1956 by Rs.4,53,600/- for the year. The company is exempt from seeking approval of central government under the provisions by General Circular no. 46/2001 dated july 14, 2011 issued by ministry of corporate affairs. The prescribed remuneration has been duly approved by the shareholders in annual general meeting held on 14th september, 2013.

7) In the opinion of the board, current assets and loans and advances are approximately of the value stated if realised in the ordinary course of business. The provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required. The Balances of few creditors are subject to their confirmation.

8) a) The Company has taken certain office/factory premises on operating lease basis. Lease payments in respect of such leases recognised in statement of profit and loss account Rs.. 2,05,64,605/- ( Previous year Rs. 1,83,60,000/- )

b) Except for escalation contained in certain lease arrangements providing for increase in the lease payment by specified percentage / amounts after completion of specified period. Further the lease terms do not contain any exceptional / restrictive covenants other than prior approval of the leasee before the renewal of lease.

c) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lesser is required for further leasing. There is no contingent rent payment.


Mar 31, 2013

1) The disclosure as per accounting standard 17 (AS-17) "Segment Reporting" issued by the institute of chartered accountants of india:

(a) Business Segment:

The company is engaged primarily in pharmaceuticals business and there are no separate reportable segments as per AS-17

(b) Geographical Segment:

2) The company has unabsorbed depreciation and carry forward of losses under Income tax laws. Hence deferred tax assets have not been recognised as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable income against which such deffered tax assets can be realised.

3) The Company has made an investment of Rs. 5,00,60,750/- and has also advanced a sum of Rs. 47,31,95,556/- to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the company, for research and development (R & D) activities. The accumulated losses of KRLL has exceeded its paid up capital and reserves.The said subsidiary has been awarded numerous patents in India and abroad for its novel Anti-Ulcer molecule KNC-6 and other molecule KNC-1206. KRLL has also developed enteric coating technology and has also been awarded Indian Patent for novel process of synthesis of Rofecoxib and Sildenafil Citrate. KRLL has, vide an agreement, agreed to give the company the right to exploit the patents, intellectual properties and all rights appurtenant thereto in any manner so as to recover the dues- current and future.

Considering that the investments are strategic and for long term the provision for diminution in value has not been considered necessary by the management.

4) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Wholly Owned Subsidiary

a) Kopran Research Laboratories Ltd.

b) Kopran (H.K) Ltd.

c) Kopran Lifesciences Ltd.

II) Key Management Personnel

Shri Surendra Somani - Executive Vice Chairman Shri Ajit Jain -Director and Chief Operating Officer

5) In the opinion of the board, current assets and loans and advances are approximately of the value stated if realised in the ordinary course of business. the provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required. The balances of few creditors are subject to their confirmation.

6) a) The Company has taken certain office/factory primises on operating lease basis. Lease payments in respect of such leases recognised in statement of profit and loss account Rs. 1,83,60,000/- ( Previous year Rs. 1,91,67,540/- )

b) Except for escalation contained in certain lease arrangements providing for increase in the lease payment by specified percentage / amounts after completion of specified period. Further the lease terms do not contain any exceptional / restrictive covenants other than prior approval of the leasee before the renewal of lease.

c) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lesser is required for further leasing. There is no contingent rent payment.

7) PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/ reclassified wherever necessary.


Mar 31, 2012

1) SHARE CAPITAL

a) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

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.

b) Terms of redemption of preference shares

55,80,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10 each are redeemable at par on 15th March, 2025 or at any time after one year from 31st March, 2012 at the option of the company.

10,00,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10 each are redeemable at par on 28th June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

20,00,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10 each are redeemable at par on 22nd June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

c) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

None of the shares of the Company are held by the Subsidiaries, Associates or Joint Ventures of the Company.

2) LONG-TERM BORROWINGS

(a) Term loan carries interest base rate 5.75% p.a. and is repayable in 10 equal quarterly installments of Rs. 50 lacs from April, 2012. The loan is secured by first mortgage charge on the company's entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari-passu basis.

(b) WCTL carried interest base Rate 4.80% p.a. to 5.75% p.a. during the year 2011 -12 and is repayable in 41 equal monthly installments of Rs. 41 lacs from April, 2010. The loan is secured by a pari-passu first charge by way of mortgage on all the immovable properties and by way of hypothecation on all the movable fixed assets of the Company both present and future and Second Charge on current assets of the company and guaranteed by three Directors/Promoters jointly and severally also by a corporate guarantee of Kopran Research Laboratories Ltd. (subsidiary company).

(c) Vehicle Finance loan carries interest @ 12.40 % p.a. and is repayable in 35 equal monthly installments of Rs. 15,892 (Including Interest) from April 2011. The loans is secured by hypothecation of Vehicles.

3) SHORT-TERM BORROWINGS

* Cash credit/Packing credit facilities availed from banks are secured by hypothecation of inventories and book debts (present and future) also second charge by way of mortgage on all immoveable properties and by way of hypothecation on all the moveable fixed assets of the company both present and future and guaranteed by director/promoter jointly and severally. The said facility is repayable on demand.

4) TRADE PAYABLES

"The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"), hence disclosures required to be made under the Act has not be given."

5) CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

As on 31/03/12 As on 31/03/11 Rs. Rs.

i) Guarantees given by the Company's bankers on behalf of the Company 5,730,630 9,709,038

ii) Bills discounted with Banks 337,849,826 207,222,858 iii) Disputed Tax Matters

a) Sales Tax demand disputed in appeal - 3,912,977

b) Service Tax demand disputed in appeal 3,295,000 9,398,218

c) Excise Duty demand disputed in appeal 3,781,596 1,377,189

d) Demand under Drug Price Control Order - 95 ( DPCO - 95 ) demand disputed in appeal 59,134,474 59,134,474

1v) Claims against the Company not - 86,883,219 acknowledged as debts:

iv) Claims against the Company not acknowledged as debts: - 86,883,219

6) Estimated amount of contracts remaining to be executed on capital account not provided for Rs. 1,49,24,075/- (Previous year Rs. 1,10,70,744/-)

7) The disclosure as per Accounting Standard 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India: (a) Business Segment:

The Company is engaged primarily in Pharmaceuticals business and there are no separate reportable segments as per AS-17

8) The company has unabsorbed depreciation and carry forward of losses under Income Tax Laws. Hence deferred tax assets have not been recognised as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable inocme against which such deffered tax assets can be realised.

9) The Company has made an investment of Rs. 5,00,60,750/- and has also advanced a sum of Rs. 46,82,04,969/- to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the Company, for Research and Development (R & D) activities. The accumulated losses of KRLL has exceeded its paid up capital and reserves. The said subsidiary has been awarded numerous patents in India and abroad for its novel Anti-Ulcer molecule KNC-6 and other molecule KNC-1206. KRLL has also developed enteric coating technology and has also been awarded Indian Patent for novel process of synthesis of Rofecoxib and Sildenafil Citrate. KRLL has, vide an agreement, agreed to give the Company the right to exploit the patents, intellectual properties and all rights appurtenant thereto in any manner so as to recover the dues- current and future.

Considering that the investments are strategic and for long term the provision for diminution in value has not been considered necessary by the management.

10) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Wholly Owned Subsidiary

a) Kopran Research Laboratories Ltd.

b) Kopran (H.K) Ltd.

c) Kopran Lifesciences Ltd.

II) Key Management Personnel

Shri Surendra Somani - Executive Vice Chairman Shri Ajit Jain -Director and Chief Operating Officer (III) Company Under Common Control

a) Oricon Enterprises Ltd.

b) Oricon Properties Pvt Ltd.

11) In the opinion of the Board, Current Assets and Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required. The balances of few creditors are subject to their confirmation.

12) a) The Company has taken certain office/factory premises on operating lease basis. Lease payments in respect of such leases recognised in statement of profit and loss account Rs. 1,91,67,540/- (Previous year Rs. 1,93,64,670/-)

b) Except for escalation contained in certain lease arrangements providing for increase in the lease payment by specified percentage /amounts after completion of specified period. Further the lease terms do not contain any exceptional/restrictive covenants other than prior approval of the leasee before the renewal of lease.

c) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lesser is required for further leasing. There is no contingent rent payment.

13) PREVIOUS YEAR FIGURES

Till the year ended 31.03.2011, the company was using pre revised schedule VI to the Companies Act, 1956 for preparation and presentation of its financial statements. During the year ended 31.03.2012, the revised schedule VI notified under the Companies Act, 1956 has become applicable to the company. The company has reclassified previous year figures to confirm to this year's classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1) CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

(Rs. in Lacs)

i) Guarantees given by the Company's bankers on behalf of the Company 97.09

(97.15)

ii) Bills discounted with Banks 2072.23

(1335.78)

iii) Disputed Tax Matters

a) Sales Tax demand disputed in appeal 39.13

(39.13)

b) Service Tax demand disputed in appeal 93.98

(1029.68)

c) Excise Duty demand disputed in appeal 13.77

(13.77)

d) Demand under Drug Price Control Order - 95 ( DPCO - 95 ) demand disputed in appeal 591.34

(591.34)

iv) Claims against the Company not acknowledged as debts: 868.83

(868.83)

2) Estimated amount of contracts remaining to be executed on capital account not provided for Rs 110.71 Lacs ( Previous year Rs. 23.89 Lacs )

3) The disclosure as per Accounting Standard 17 (AS-17) "Segment Reporting" issued by the institute of Chartered Accountants of India:

a) Business Segment:

The Company is engaged primarily in Pharmaceuticals business and there are no separate reportable segments as per AS-17

4) The Board of Directors have not recommended any dividend on Cumulative Preference Shares amounting to Rs.32.58 lacs, during the year. The total liability of dividend on Cumulative Preference Shares as on 31st March, 2011 is Rs. 566.48 lacs.

5) The company has unabsorbed depreciation and carry forward of losses under Income Tax Laws. Hence deferred tax assets have not been recognised as there is no vitual certainty supported by convincing evidence that there will be sufficient future taxable inocme against which such deffered tax assets can be realised.

6) The Company has made an investment of Rs. 500.61 lacs and has also advanced a sum of Rs.4882.62 lacs to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the Company, for Research and Development (R & D) activities. The accumulated losses of KRLL has exceeded its paid up capital and reserves.The said subsidiary has been awarded numerous patents in India and abroad for its novel Anti-Ulcer molecule KNC-6 and other molecule KNC-1206. KRLL has also developed enteric coating technology and has also been awarded Indian Patent for novel process of synthesis of Rofecoxib and Sildenafil Citrate. KRLL has, vide an agreement, agreed to give the Company the right to exploit the patents, intellectual properties and all rights appurtenant thereto in any manner so as to recover the dues- current and future, Considering that the investments are strategic and for long term the diminution in value has not been considered necessary by the management.

7) The Company has not paid any commission to the Managerial Personnel. Hence, the calculation under section 198/349 read with section 309 of the Companies Act, 1956 is not applicable.

Mr Ajit Jain has been appointed as Director and Chief operating officer with effect from 1st February, 2010. The remuneration paid to him is in excess of the limit under schedule XIII of the Companies Act, 1956 and was subject to approval at the Annual General Meeting and also subject to approval of the Central Government. The company has received the approval from the central Government vide letter dated 29th July, 2011.

8) Interest paid on term loans is net of interest received on Fixed / Margin Deposit Gross Rs.13.19 lacs, TDS Rs.1.32 lacs (Previous Year Rs. 22.86 lacs, TDS Rs. 1.94 lacs). Interest paid on others is net of interest received Gross Rs.99.17 lacs, TDS Rs.Nil (Previous year - Gross Rs. 52.17, TDS Rs. Nil)

9) The net Exchange Gain of Rs.235.24 lacs (Previous Period Gain of Rs.262.95 lacs) is included in the Profit and Loss Accounts.

10) The company has alloted 19,50,000 equity shares of Rs. 10/-each for cash at par to a promoter group company on 10th August, 2010, against conversion of 19,50,000 shares warrants alloted to the company on 24th September, 2009.

11) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Wholly Owned Subsidiary

a) Kopran Research Laboratories Ltd.

b) Kopran (H.K) Ltd.

c) Kopran Lifesciences Ltd. (w.e.f. 20th December, 2010)

II) Associate Enterprises

a) Pharmaceutical Business Group (I) Ltd. (up to 12th January, 2011)

b) Panorma Finvest Pvt. Ltd.

III) Key Management Personnel

Shri Surendra Somani - Executive Vice Chairman

Shri Ajit Jain -Director and Chief Operating Officer

12) In the opinion of the Board, Current Assets and Loans and Advances are approximately of the value stated if realised in the ordinary course of business.The provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required.

13) Conversion of dividend payable of Rs. 36 lacs for the year ending 31st March, 2002 to 31st March, 2004 on Preference Shares into Zero Coupon Debentures (ZCD) and repayable in 16 quarterly instalments commencing from 1st April, 2005 has been approved by Corporate Debt Restructuring (CDR) cell and same has been shown as unpaid dividend, pending conversion.

14) (a) The Company has taken certain office / factory on operating lease basis. Lease payments in respect of such leases recognised in profit and loss account Rs. 193.65 Lacs ( Previous year Rs. 148.30 Lacs ).

(b) Except for escalation contained in certain lease arrangements providing for increase in the lease payment by specified percentage/ amounts after completion of specified period. Further the lease terms do not contain any exceptional / restrictive covenants other than prior approval of the leasee before the renewal of lease.

(c) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lesser is required for further leasing. There is no contingent rent payment.

15) Previous year's figures have been regrouped and recasted wherever considered necessary.


Mar 31, 2010

1) CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

(Rs. in Lacs)

i) Guarantees given by the Companys bankers on behalf of the Company 97.15

(32.21)

ii) Bills discounted with Banks 1335.78

(1567.20)

iii) Disputed Tax Matters

a) Sales Tax demand disputed in appeal 39.13

(39.13)

b) Service Tax demand disputed in appeal 1029.68

(1029.68)

c) Demand under Drug Price Control Order - 95 ( DPCO - 95 ) demand 591.34

disputed in appeal (591.34)

iv) Claims against the Company not acknowledged as debts: 868.83

(868.83)

2) Estimated amount of contracts remaining to be executed on capital account not provided for Rs. 23.89 Lacs (Previous year Rs. 15.27 Lacs)

3) Employee Benefits :

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made :

4) The disclosure as per Accounting Standard 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India:

a) Business Segment:

The Company is engaged primarily in Pharmaceuticals business "and there are no separate reportuie segments as per AS-17

5) The Board of Directors have not recommended any dividend on Cumulative Preference Shares amounting to Rs.32.58 lacs, during the year. The total liability of dividend on Cumulative Preference Shares as on 31st March, 2010 is Rs. 533.90 lacs.

6) The company has unabsorbed depreciation and carry forward of losses under Income Tax Laws. Hence deferred tax assets have not been recognised as there is no virtual certainty supported by convincing evidence that there will be sufficient future taxable income against which such deferred tax assets can be realised.

7) The Company has made an investment of Rs 500.61 lacs and has also advanced a sum of Rs.5612.43 lacs to Kopran Research Laboratories Ltd (KRLL), a wholly owned subsidiary of the Company, for Research and Development (R & D) activities. The accumulated losses of KRLL has exceeded its paid up capital and reserves.The said subsidiary has been awarded numerous patents in India and abroad for its novel Anti-Ulcor molecule KNC-6 and other molecule KNC-1206. KRLL has also developed enteric coating technology and has^lso been awarded Indian Patent for novel process of synthesis of Rofecoxib and Sildenafil Citrate. KRLL has, vide an agreement.agreed to give the Company the right to exploit the patents, intellectual properties and all rights appurtenant thereto in any manner so as to recover the dues- current and future.

Considering that the investments are strategic and for long term the diminution in value has not been considered necessary by the management.

The Company has not paid any commission to the Managerial Personnel. Hence, the calculation under section 198/349 read with section 309 of the Companies Act, 1956 is not applicable.

Mr. Ajit Jain has been appointed as Director and Chief Operating Officer with effect from 1st February 2010. The remuneration paid to him is subject to approval at the Annual General Meeting and also subject to approval of the Central Government. Pending such approval, the remuneration paid in excess of the limit under schedule XIII of the Companies Act, 1956 is being held in trust by him.

8) Interest paid on term loans is net of interest received on Fixed/ Margin Deposit Gross Rs.22.86 lacs, TDS Rs. 1.94 lacs (Previous Year Rs. 13.19 lacs, TDS Rs. 2.78 lacs). Interest paid on others is net of interest received Gross Rs.52.17 lacs, TDS Rs.Nil (Previous year- Gross Rs.Nil , TDS Rs. Nil)

9) The net Exchange Gain of Rs.262.95 lacs (Previous Period Gain of Rs. 18.96 lacs) is included in the Profit and Loss Accounts.

10) The company has forfeited deposit of Rs.106.83 lacs received against 41,46,500 share warrants issued in the earlier years. Further, the company has issued 19,50,000 share warrants to a promoter group company against which the company has received a deposit of Rs.48.75 Lacs which is shown under share holders funds.

11) Disclosure as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India

I) Wholly Owned Subsidiary

a) Kopran Research Laboratories Ltd.

b) Kopran (H.K.) Ltd.

II) Associate Enterprises

a) Pharmaceutical Business Group (I) Ltd.

b) Panorma Finvest Pvt. Ltd.

III) Key Management Personnel

Shri Surendra Somani - Executive Vice Chairman Shri Ajit Jain - Director and Chief Operating Officer

12 Exceptional Items:

Exceptional Items comprise of Rs. 675.00 Lacs received during the year on accounts of non-compete fees.

13) Small Scale Industrial undertakings (SSIs) to whom amounts are due have been determined based on the information available with the Company and are given below. The dues that are outstanding for more than 30 days are as follows:

Acid Industries, Agrawal Silicon Carbon & Chemicals Pvt Ltd, Century Industrial Carbons, Enar Chemie, Jayson ammonia & Chemicals Pvt Ltd, Maple Biotech Pvt Ltd, Modern Petro Packaging Ltd, Online Graphics Pvt Ltd, Paras Enterprise, P. R. Packaging, Ramdev Chemical Pvt Ltd, Saroj Print Arts, S. V. Enterprises, Saroj Press Pvt Ltd, Shreenath Packaging, Zafcan.

The Company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act,2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/ payable as required under the said Act have not been made.

14) In the opinion of the Board, Current Assets and Loans and Advances are approximately of the value stated if realised in the ordinary course of business.The provision for all known and determined liabilities are adequate and not in excess of the amounts reasonably required.

15) Balances of some of the Debtors, Creditors, Loans & Advances are subject to confirmation, reconciliation and consequent adjustment, if any. However, in the opinion of the management such adjustments, if any, will not be material.

16) Conversion of dividend payable of Rs. 36 lacs for the year ending 31st March, 2002 to 31st March, 2004 on Preference Shares into Zero Coupon Debentures (ZCD) and repayable in 16 quarterly instalments commencing from 1st April, 2005 has been approved by Corporate Debt Restructuring (CDR) cell and same has been shown as unpaid dividend, pending conversion.

17) Previous years figures have been regrouped and recasted wherever considered necessary.

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