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Notes to Accounts of Mercury Laboratories Ltd.

Mar 31, 2015

1. General Information of the Company.

Mercury Laboratories the registered partnership firm started its business activity in the year 1962. Subsequently it converted into Private Ltd. Company, & incorporated in the year 1982. Later it further converted into Limited Company in the year 1992 in state of Maharashtra. The company has obtained ISO 9001:2008 registration and engaged in the business of Pharmaceutical items. The company is profit making and dividend paying Public Limited Company.

The Company made its public issue in the year 1992 and is listed on the OTC Stock Exchange.

2. Note on amalgamation:

Mercury Laboratories Limited (MLL) (Transferee Company) was incorporated in the year 1992 and engaged in the business of manufacturing, exporting & importing of Pharmaceutical Drugs & Medicines. Mercury Antibiotics Private Limited (MAPL) (Transferor Company) was incorporated in the year 1989 and it is engaged in the business of manufacturing, importing, exporting of pharmaceutical Drugs, Medicines formulations, Bulk Drugs including a wide variety of Oral Dosage Products such as Liquids, Syrups and Dry Powder based medicinal products. Both the Companies have been promoted by Shri Dilip R. Shah & Shri Rajendra R. Shah having a several decades of experience and standing in the pharmaceutical companies.

The Board of Directors of MAPL (Transferor Company) & the Board of Directors of MLL (Transferee Company) have respectively passed the resolutions on 05th January, 2012 to amalgamate both the companies. The scheme of amalgamation has been presented under Section 391 to Section 394 of the Companies Act, 1956 to Honorable High Court at Mumbai (Maharastra).

The Board of Directors has passed the resolution dated 3rd April, 2014 after due deliberation and decided to withdraw the application made to Honorable High Court of Mumbai for amalgamation of the two companies decided in the earlier year.

3. Share Capital

(a) The Company has a single class of equity shares which are having par value of Rs. 10 per equity share. All shares rank pari passu with reference to all rights relating thereto. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportions to their shareholding.

4. SECURED LOAN

The State Bank of India has sanctioned various credit facilities which are working capital finance, Export Credit facility & FCNRB which is secured by way of Equitable mortgage over factory, land & building at Vadodara & at Jarod, District Vadodara & against Hypothecation charged over Plant & Machinery at Baroda & Jarod & against the stock of inventories & book-debts of the company.

UNSECURED DEPOSITS

The amount taken as deposits from directors and members are unsecured and are for the period of 36 months. Interest on unsecured deposits has been paid at the rate of 8 percent.

5. Micro and Small Enterprises

With reference to amounts shown as payable to Micro, Small and Medium Enterprises, the information has been compiled in respect of parties to the extent they could be identified as Micro, Small and Medium Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors. The Company deals with various Micro Small and Medium Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company.

Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro, Medium and Small Enterprises has not been compiled and presented.

6. CONTINGENT LIABILITIES AND COMMITMENTS :

31/03/2015 31/03/2014 (Rs) (Rs.)

Contingent Liabilities

Claims against the Company not 21,82,587 29,59,359 acknowledged as debt

Guarantees (Bank Gurantee) 68,88,570 65,29,253

Other Moneys for which Company is - - contingently liable

TOTAL Rs. 90,71,157 94,88,612

Commitments

Estimated amounts of contracts remaining to be executed on capital - - account and not provided for

Uncalled liability on shares or - - investments partly paid

Other Commitments - -

TOTAL Rs. - -

7. In the opinion of the Board, all assets which are considered good ( other than Fixed Assets and Non- Current Investments) are expected to realised at least the amount at which they are stated, if realised in the ordinary course of business. Further in the opinion of the Board, provision for all known liabilities has been adequately made in the accounts and as per management experience and estimates, no additional provisions are required.

8. POST EMPLOYMENT BENEFITS :

Providend Fund and ESI dues paid during the year being defined contributions have been charged to the Profit and Loss Account.

In accordance with the policy for accounting for Gratuity Obligation, Gratuity Fund Contribution to the tune of Rs. 4,93,069/- (being current service cost) has been debited to the Profit and Loss Account for the year.

Further in terms of Actuarial Valuation carried out by the Insurer, the Present Value of Obligations as at the year end comes to Rs. 77,43,743/- (PY Rs. 67,61,967/-) against which the Fair Value of Plan Assets comes to Rs. 8580272/- (PY Rs.78,82,799/-) resulting a net asset of Rs. 8,36,529/- (PY Rs. 11,20,833/-).

Method Used Projected Unit Credit Method

Actuarial Assumptions Used

Mortality Rate LIC (1994-96)

Discount Rate 8%

Expected Return on Plan Assets 9%

Salary Escalation Rate 7%

Withdrawal Rate 1% to 3% depending

Major Categories of Plan Assets Insurer Managed Funds -100%

9. RELATED PARTY TRANSCATIONS

The Company has identified all the related parties having transactions during the year in line with Accounting Standard 18. Details of the same are as under

(a) LIST OF RELATED PARTIES :

Name of Related Parties Nature of Relationship

Mr. R .R. Shah Managing Director

Mr. D.R. Shah Executive Director

Mercury Antibiotics Pvt. Ltd. An enterprise Managed by the Relatives of Directors

Bio- Med India A Concern in which Directors are Partner

Mercury Marketing & Consulting A Concern in which Directors are Services Partner

Kusumben R. Shah Relatives of Director

Kaumudiniben R. Shah Relatives of Director

Kishoriben D. Shah Relatives of Director

R.R. Shah( H.U.F) Relatives of Director

Adit D. Shah Relatives of Director

Janki R. Shah Relatives of Director

10. Impairment of Assets :

As a tool to measure to the value of fixed assets, the Company has considered the technical Valuation carried out by expert. In terms of the same and further in absence of any indications, external or internal, as to any probable impairment of assets, no provision has been made for same during year under report.

11. The figures in respect of previous year have been re-grouped / recast wherever necessary to confirm to the current year's classification.


Mar 31, 2014

1. General Information of the Company.

Mercury Laboratories the registered partnership firm started its business activity in the year 1962. Subsequently it converted into Private Ltd. Company, & incorporated in the year 1982. Later it further converted into Limited Company in the year 1992 in state of Maharashtra. The company has obtained ISO 9001:2008 registration and engaged in the business of Pharmaceutical items. The company is profit making and dividend paying Public Limited Company.

The Company made its public issue in the year 1992 and is listed on the OTC Stock Exchange.

2. Note on amalgamation:

Mercury Laboratories Limited (MLL) (Transferee Company) was incorporated in the year 1992 and engaged in the business of manufacturing, exporting & importing of Pharmaceutical Drugs & Medicines. Mercury Antibiotics Private Limited (MAPL) (Transferor Company) was incorporated in the year 1989 and it is engaged in the business of manufacturing, importing, exporting of pharmaceutical Drugs, Medicines formulations, Bulk Drugs including a wide variety of Oral Dosage Products such as Liquids, Syrups and Dry Powder based medicinal products. Both the Companies have been promoted by Shri Dilip R. Shah & Shri Rajendra R. Shah having a several decades of experience and standing in the pharmaceutical companies.

The Board of Directors of MAPL (Transferor Company) & the Board of Directors of MLL (Transferee Company) have respectively passed the resolutions on 05th January, 2012 to amalgamate both the companies. The scheme of amalgamation has been presented under Section 391 to Section 394 of the Companies Act, 1956 to Honorable High Court at Mumbai (Maharastra).

The Board has passed the resolution dated 3rd April, 2014 after due deliberation and decided to withdraw the application made to Honorable High Court of Mumbai for amalgamation of the two companies decided in the earlier year.

3. The Company has a single class of equity shares which are having par value of Rs. 10 per equity share. All shares rank pari passu with reference to all rights relating thereto. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportions to their shareholding.

SECURED LOAN

The State Bank of India has sanctioned various credit facilities which are working capital finance, Export Credit facility & FCNRB which is secured by way of Equitable mortgage over factory, land & building at Vadodara & at Jarod, District Vadodara & against Hypothecation charged over Plant & Machinery at Baroda & Jarod & against the stock of inventories & book-debts of the company.

UNSECURED LOAN The amount to taken as unsecured loan from directors are usually payable on demand but the company reserves it right to differ the payment of the some for a period exceeding 12 months. Interest on unsecured loan''s has been paid at the rate of 8 percent.

Micro and Small Enterprises:

With reference to amounts shown as payable to Micro, Small and Medium Enterprises, the information has been compiled in respect of parties to the extent they could be identified as Micro, Small and Medium Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors. The Company deals with various Micro Small and Medium Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company.

Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro, Medium and Small Enterprises has not been compiled and presented.

4. CONTINGENT LIABILITIES AND COMMITMENTS :

31/03/2014 31/03/2013 (Rs.) (Rs.)

Contingent Liabilities

Claims against the Company not 2,959,359 2,810,369 acknowledged as debt

Guarantees (Bank Gurantee) 6,529,253 4,274,966

Other Moneys for which Company is - 1,961,125 contingently liable

TOTAL Rs. 9,488,612 9,046,460

Commitments

Estimated amounts of contracts remaining to be executed on capital account and not provided for - - Uncalled liability on shares or investments partly paid - - Other Commitments - -

TOTAL Rs. - -

5. In the opinion of the Board, all assets which are considered good (other than Fixed Assets and Non- Current Investments) are expected to realised at least the amount at which they are stated, if realised in the ordinary course of business. Further in the opinion of the Board, provision for all known liabilities has been adequately made in the accounts and as per management experience and estimates, no additional provisions are required.

6. POST EMPLOYMENT BENEFITS :

Providend Fund and ESI dues paid during the year being defined contributions have been charged to the Profit and Loss Account.

In accordance with the policy for accounting for Gratuity Obligation, Gratuity Fund Contribution to the tune of Rs.4,79,170 /- (PY Rs. 4,83,404/-) (being current service cost) has been debited to the Profit and Loss Account for the year.

Further in terms of Actuarial Valuation carried out by the Insurer, the Present Value of Obligations as at the year end comes to Rs. 67,61,967/- (PY Rs. 65,61,627/-) against which the Fair Value of Plan Assets comes to Rs. 78,82,799/- (PY Rs.76,54,631 /-) resulting a net asset of Rs. 11,20,833/- (PY Rs. 10,93,004/-).

Method Used Projected Unit Credit Method

Actuarial Assumptions Used

Mortality Rate LIC (1994-96) Ultimate

Discount Rate 8%

Expected Return on Plan 9% Assets

Salary Escalation Rate 7%

Withdrawal Rate 1 % to 3% depending on age

Major Categories of Plan Insurer Managed Funds - 100% Assets

7. Impairment of Assets :

As a tool to measure to the value of fixed assets, the Company has considered the technical Valuation carried out by expert. In terms of the same and further in absence of any indications, external or internal, as to any probable impairment of assets, no provision has been made for same during year under report.

8. The figures in respect of previous year have been re-grouped / recast wherever necessary to confirm to the current year''s classification.


Mar 31, 2013

1. General Information of the Company.

Mercury Laboratories the registered partnership firm started its business activity in the year 1962. Subsequently it converted into Private Ltd. Company, & incorporated in the year 1982. Later on further converted into Limited Company in the year 1992 in state of Maharashtra. The company has obtained ISO 9001:2008 registration and engaged in the business of Pharmaceutical items. The company is profit making and dividend paying Public Limited Company.

The Company made its public issue in the year 1992 and is listed on the OTC Stock Exchange.

2. Note on amalgamation:

Mercury Laboratories Limited (MLL) (Transferee Company) was incorporated in the year 1992 and engaged in the business of manufacturing, exporting & importing of Pharmaceutical Drugs & Medicines. Mercury Antibiotics Private Limited (MAPL) (Transferor Company) was incorporated in the year 1989 and it is engaged in the business of manufacturing, importing, exporting of pharmaceutical Drugs, Medicines formulations, Bulk Drugs including a wide variety of Oral Dosage Products such as Liquids, Syrups and Dry Powder based medicinal products. Both the Companies have been promoted by Shri Dilip R. Shah & Shri Rajendra R. Shah having a several decades of experience and standing in the pharmaceutical companies.

The Board of Directors of MAPL (Transferor Company) & the Board of Directors of MLL (Transferee Company) have respectively passed the resolutions on 05th January, 2012 to amalgamate both the companies. The scheme of amalgamation has been presented under Section 391 to Section 394 of the Companies Act, 1956 to Honorable High Court at Mumbai (Maharastra).

The proposed amalgamation will create the synergy of Operations, minimize the Cost, Cost & Administrative expenses & generate the higher profitability for the companies. In terms of the scheme of amalgamation, all the assets & liabilities of MAPL will get transferred to MLL with effect from 01st April, 2011 as appointed date & all the transactions carried out by MAPL on & after the said Date will be to the account of MLL.

Consequent upon the receipt of approval from the Honorable High Court at Bombay (Maharastra), MAPL will stand merged with MLL with effect from 01st April, 2011 & will stand extinguished & the account of MLL for the year 2011-12 & 2012-13 will be re-stated for giving the effect to the said scheme.

The Company has a single class of equity shares which are having par value of Rs. 10 per equity share. All shares rank pari passu with reference to all rights relating thereto. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportions to their shareholding.

Micro and Small Enterprises :With reference to amounts shown as payable to Micro, Small and Medium Enterprises, the information has been compiled in respect of parties to the extent they could be identified as Micro, Small and Medium Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors. The Company deals with various Micro Small and Medium Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company.

Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro, Medium and Small Enterprises has not been compiled and presented.

3. CONTINGENT LIABILITIES AND COMMITMENTS

31/03/2013 31/03/2012

(Rs) (Rs.)

Contingent Liabilities

Claims against the Company not 2,810,369 2,698,386 acknowledged as debt

Guarantees ( Bank Gurantee ) 4,274,966 2,585,785

Other Moneys for which Company is 1,961,125 2,766,328 contingently liable

TOTAL RS. 9,046,460 8,050,499

Commitments

Estimated amounts of contracts remaining to be executed

on capital account and not provided for - 78,900,000

Uncalled liability on shares or - - investments partly paid

Other Commitments - -

TOTAL RS. - 78,900,000

4. In the opinion of the Board, all assets which are considered good ( other than Fixed Assets and Non- Current Investments ) are expected to realised at least the amount at which they are stated, if realised in the ordinary course of business. Further in the opinion of the Board, provision for all known liabilities has been adequately made in the accounts and as per management experience and estimates, no additional provisions are required.

5. POST EMPLOYMENT BENEFITS

Providend Fund and ESI dues paid during the year being defined contributions have been charged to the Profit and Loss Account.

In accordance with the policy for accounting for Gratuity Obligation, Gratuity Fund Contribution to the tune of Rs.4,83,404 /- (PY Rs. 4,05,162/-) (being current service cost) has been debited to the Profit and Loss Account for the year.

Further in terms of Actuarial Valuation carried out by the Insurer, the Present Value of Obligations as at the year end comes to Rs. 65,61,627/- (PY Rs. 46,62,791/-) against which the Fair Value of Plan Assets comes to Rs. 76,54,631/- (PY Rs. 66,86,360/-) resulting a net asset of Rs. 10,93,004/- (PY Rs. 20,23,569/-). The Company has not recognized this asset following the concept of prudence.

Method Used Projected Unit Credit Method

Actuarial Assumptions Used

Mortality Rate LIC (1994-96) Ultimate

Discount Rate 8%

Expected Return on Plan Assets 9%

Salary Escalation Rate 7%

Withdrawal Rate 1% to 3% depending on age

Major Categories of Plan Assets Insurer Managed Funds - 100%

6. RELATED PARTY TRANSACTIONS :-

The Company has identified all the related parties having transactions during the year in line with Accounting Standard 18. Details of the same are as under (a) List of Related Parties

Name of Related Parties Nature of Relationship

Mr. R .R. Shah Managing Director

Mr. D.R. Shah Executive Director

Mercury Antibiotics Pvt. Ltd. An enterprise Managed by the Relatives of Directors

Bio- Med India A Concern in which Directors are Partner

Mercury Marketing & Consulting A Concern in which Directors Services are Partner

Kusumben R. Shah Relatives

Kaumudiniben R. Shah Relatives

Kishoriben D. Shah Relatives

R.R. Shah( H.U.F) Relatives

Adit D. Shah Relatives

Janki r shah Relatives

7. Impairment of Assets

As a tool to measure to the value of fixed assets, the Company has considered the technical Valuation carried out by expert. In terms of the same and further in absence of any indications, external or internal, as to any probable impairment of assets, no provision has been made for same during year under report.

8. The figures in respect of previous year have been re-grouped / recast wherever necessary to confirm to the current year''s classification.


Mar 31, 2012

2. General Information of the Company.

Mercury Laboratories the registered partnership firm started its business activity in the year 1962. Subsequently it converted into the Private Ltd. Company & incorporated in the year 1982. Later on further converted into Limited Company in the year 1992 in the state of Maharashtra. The company has obtained ISO 9001:2008 registration and engaged in the business of Pharmaceutical items. The company is profit making and dividend paying Public Limited Company.

The Company made its public issue in the year 1992 and is listed on the OTC Stock Exchange.

3. Notes on Amalgamation :

Mercury Laboratories Limited (MLL) (Transferee Company) was incorporated in the year 1992 and engaged in the business of manufacturing, exporting & importing of Pharmaceutical Drugs & Medicines. Mercury Antibiotics Private Limited (MAPL) (Transferor Company) was incorporated in the year 1989 and it is engaged in the business of manufacturing, importing, exporting of pharmaceutical Drugs, Medicines formulations, Bulk Drugs including a wide variety of Oral Dosage Products such as Liquids, Syrups and Dry Powder based medicinal products. Both the Companies have been promoted by Shri Dilip R. Shah & Shri Rajendra R. Shah having a several decades of experience and standing in the pharmaceutical business.

The Board of Directors of MAPL (Transferor Company) & the Board of Directors of MLL (Transferee Company) have respectively passed the resolutions on 10th December, 2011 to amalgamate both the companies. The scheme of amalgamation has been presented under Section 391 to Section 394 of the Companies Act, 1956 to Honorable High Court at Mumbai (Maharastra).

The proposed amalgamation will create the synergy of Operations, minimize the Cost, Cost & Administrative expenses & will generate the higher profitability for the companies. In terms of the scheme of amalgamation, all the assets & liabilities of MAPL will get transferred to MLL with effect from 01st April, 2011 as appointed date & all the transactions carried out by MAPL on & after the said Date will be to the account of MLL.

Consequent upon the receipt of approval from the Honorable High Court at Mumbai (Maharastra), MAPL will stand merged with MLL with effect from 01st April, 2011 & will stand extinguished & the account of MLL for the year 2011-12 will be re-stated for giving the effect to the said scheme.

(4) The Company has a single class of equity shares which are having par value of Rs. 10 per equity share. All shares rank pari passu with reference to all rights relating thereto. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportions to their shareholding.

(5) Micro and Small Enterprises :

With reference to amounts shown as payable to Micro, Small and Medium Enterprises, the information has been compiled in respect of parties to the extent they could be identified as Micro, Small and Medium Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors. The Company deals with various Micro Small and Medium Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company.

Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro, Medium and Small Enterprises has not been compiled and presented.

(6) Sundry Creditors and Sundry Debtors are as per books and have not been corroborated by circulation / confirmation of balances / reconciliation of accounts. Confirmations of parties concerned, for the amount receivable / due to them as per accounts of the company, are under process of reconciliation and adjustments required, if any, will be made as and when the accounts are settled.

(7) In the opinion of the Board, the Current Assets, Loans and Advances which are considered good are expected to realise at least the amount at which they are stated, if realized in the ordinary course of business. Further, in the opinion of the Board and as per management, provision of all known liabilities has been adequately made in the accounts.

(8) Contingent Liabilities (to the extent not provided for)

Guarantees:

Bank Guarantees outstanding as on 31st March, 2012, amounted to Rs 25,85,785/- (p.y Rs 8,50,620/-) and Letters of Credit outstanding as at 31st March 2012, amounted to Rs 27,66,328/- (p.y. Rs. 21,59,730/-) against which the company has kept the Margin Money in the form of Fixed Deposit worth Rs. 63,13,215/- (p.y Rs. 1,03,13,997/-).

Claims against the Company not acknowledged as debt:

The company has disputed the following statutory liabalities & pending with following authorites as mentioned below :

Disputed Sales Tax Liabilities : 2,08,608/- Disputed Service Tax Liabilities : 18,48,486/- Disputed Central Excise Liabilities : 6,41,292/-

(9) Commitments (to the extent not provided for)

Estimated amt. of contracts remaining to be executed on capital account: Rs.789 lacs (p.y. Rs. Nil) Other Commitments : Nil

(10) Proposed Dividend :

Amount of Rs. 1.50 per Equity Share aggregating to Rs. 18,00,000/- is being proposed as dividend on equity shares.

There are no arrears of dividends.

(11) Post Employment Benefits

Provident Fund & ESI dues amounting to Rs.16,84,214 (PY Rs.21,83,038) paid during the year being defined contributions has been charged to the Statement of Profit and Loss.

The value of obligation towards entitlement of employees accumulating earned leave and eligibility of compensation or encashment of the same is measured at the expected amount required to be paid as a result of actual unused entitlement standing to the credit of the employees as at end of the year based on current salary standards. Accordingly a sum of Rs. 3,30,821 (p.y. Rs.3,08,619) has been determined as obligation as at the year end. The differential of Rs. 1,28,240 (p.y. 41,655) between the obligation as at the end of previous year, compensation paid during the year and the obligation as the year end has been charged to the Statement of Profit and Loss.

The Company has a defined benefit gratuity plan. As per the Payment of Gratuity Act, 1972, every employee who has completed five or more years of service is eligible for gratuity @ 15 days salary (last drawn) for every completed year of service with an overall ceiling of Rs. 10,00,000 (PY Rs. 3,50,000) at the time of separation from the Company or retirement whichever is earlier. The Company has taken a Group Gratuity cum Life Insurance Policy from Life Insurance Corporation of India (a qualifying policy) and makes annual contributions to the same to create a fund to meet this defined benefit gratuity obligation.

(12) Segment Reporting

With respect to Accounting Standard-17on segment reporting issued by the Institute of Chartered Accountants of India, the Management of the Company is of the view that the products offered by the Company are in the nature of Pharmaceuticals Formulations. Hence, the business of production and sale of Pharmaceuticals Formulations belong to one business segment only.

(13) The Company has not made any forward contracts during the year.

(14) To comply with the International standard of regulatory market the company has undertaken the project to construct the factory building and availed the Term Loan in foreign currency (FCNRB) from State Bank of India Baroda. The undertaken project will take substantial period of time. The Company has capitalized the borrowing cost of Rs. 14,56,041/- in terms of the accounting practice followed by the Company in consonance with Accounting Standard-16 Borrowing Costs.

(15) There are no amounts pending to be transferred to the Investors Education and Protection Fund as at the end of the year.

(16) These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous periods figures have been recast / restated.


Mar 31, 2011

1 a. Contingent Liabilities not provided for in respect of: (Rs. In Thousand)

31/03/2011 31/03/2010

Bank guarantees pending to be redeemed 850.62 1114.34

Pending Letters of Credit 2159.73 13063.90

Sales tax matters in dispute 208.61 208.61

b. There is no claim against company to be acknowledged as debt.

c. Estimated amount of contracts to be executed on capital account not provided for Rs. NIL

3 Sundry Debtors includs Rs. 29.23 lacs outstanding for more than six months and considered to be doubtful of recovery. However, no provision has been made in the accounts for the same and to that extent the Profits/Reserves are reflectef on the higher side.

4 In cases where letters of confirmation have been received from the parties, book balance have been generally reconcilled and adjusted. In other cases, balances in the account of sundry debtors, sundry creditors and loans and advances or deposits are taken as per the books of accounts.

5 In case of Sundry Debtors and Loans & Advances which are considered good, the Company holds no security other than the personal security of the parties.

6 The Company has aviled the Finance from State Bank of India which is secured by way of hypothecation charges on all types of stocks, whether lying in the premises of the Company or elsewhere, books-debts, inland and Foreign bills in course of collection. The loans are further secured by way of first charge on the Plant & Machinery, equipments and all other movable assets,both present or future and also by way of Equitable Mortgage of Company''s Land & Building at Vadodara and also the Building at Jarod. These loans are also personally guaranteed by the Directors of the Company.

7 In the opinion of the Board, the Current Assets, Loans & Advances, are expected to realize at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

8 With reference to amounts shown as payable to Micro & Small Enterprises, the information has been complied in respect of parties to the extent they could be identified as Micro and Small Enterprises on the basis of information collected and available with the company and same has been relied upon by the auditors. The Company deals with various Micro and Small Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company. Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro and Small Enterprises has not been compiled and presented.

9 Post Employment Benefits :

The Company, during the year, has adopted Accounting Standard 15(Revised) "Employee Benefits" issued by the ICAI in accordance with stipulations of the Standard.

Provident Fund dues during the year being defined contributions have been charged to the Profit and Loss Account.

Long Term Employee Benefits on account of compensated absences have been accounted for on actuarial basis using the Projected Unit Credit Method.

10 Impairment of Assets :

As a tool to measure to the value of fixed assets, the Company has considered the technical Valuation carried out by expert. In terms of the valuation report and further in absence of any indications, external or internal, as to any probable impairment of assets, no provision has been made for the same during the year under report.

11 There are no amounts pending to be transferred to the Investors Education and Protection Fund as at the end of the year.

12 Segment Reporting:

With respect to Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the management is of the view the products of the Company can be classified into only one category i.e. "Pharmaceutical Formulations". Thus, the business of production and sales of pharmaceutical products belong to one segment only.

13 Deferred Taxes :

In compliance with Accounting Standerd 22 on Taxes on income issued by the institute of Chartered Accounttants of India, the Company has disclosed net deferred tax liability of Rs.6476.31 Thousand for the year ended 31st March 2011 after charging net deferred tax liability for the year under report of Rs.68.61 Thousand to the profit and loss account.

(b) In respect of the transactions entered with releted entities by the Company till 31st December, 2010 to which section 297(1) of the Companies Act 1956, were attracted, as an abudant caution, the Company has submitted its SUO MOTTO application to the Registrar of Companies, Maharashtra, for compounding of offence to the Regional Director under Section 621-A of the Companies Act.1956, which is pending for Disposal. The transaction with releted entities after 1 st January, 2011 the Company has obtained the approval of Central Govt. through Regional Director, Westen Regional, Mumbai, vide approval letter No. RD/297/372/2374/12/2010/10066 dated 28/02/2011.

14 ContingenciesProvisions :

Contingencies which can be reasonably ascertained are provided for, if in the opinion of the Management,there is a probability that it will result in an outflow for the Company in the future. Other Contingencies,the outcome of which is not certain, have been disclosed in these notes as Contingent Liabilities. Contingent Assets have not been provided for.

 
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