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Notes to Accounts of Parabolic Drugs Ltd.

Mar 31, 2015

(A) TERMS/ RIGHTS ATTACHED TO EQUITY SHARES

The Company has only One Class of Equity Shares having par value of Rs. 10 each. Each holder of Equity share is entitled to one vote per share with a right to receive per share dividend declared by the company. The company declares and pays dividend in Indian rupees.The Dividend proposed by Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder 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.

1) All the Fixed Assets have been physically verified by the management as on 31st March, 2015.

2) During the Year, the depreciation has been provided on the basis of useful life of assets as prescribed under schedule- II of the companies Act,2013.

3) Pursuant to the enactment of Companies Act 2013, the company has applied the useful lives as specified in Schedule II. Accordingly the unamortized carrying value is being depreciated /amortized over the revised/ remaining useful lives of assets.

4) The value of assets whose lives have not yet expired as on 1st April 2014 as per Schedule II of Companies act, 2013 and excess depreciated as per companies act, 1956 upto 31st March 2014 have been adjusted in fixed asset chart through Reserve & Surplus .

(B) Additional Notes to the Financial Statements:

(1) Debit or Credit Balances on whatever account are subject to confirmation/ reconciliation.

(2) The work-in-process / semi - finished goods and by product etc. have been grouped as closing stock and the variation is stock has been worked out accordingly.

(3) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account and vice-versa.

(4) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities.

(5) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited. Hence the information required to be given in accordance with section 22 of the said act is not ascertainable and not disclosed .

(6) Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents, including conclusion of underlying sales contracts.

(7) Stock of stores and consumables amounting to Rs. 4.38 mn comprises spares and others consumable items. The value as estimated and certified by the management has been considered.

(8) Fixed Deposit with banks of Rs. 26.46 mn (Previous year Rs. 57.62 mn) are pledged as margin money with banks.

(9) The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientific and Industrial Research, Govt, of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala upto 31.03.2016 vide letter No. TU/IV-RD/2502/2013 dated 18th September,2013. The total revenue expenditure incurred during the year on Research &Development(including Barwala Unit) amounted to Rs. 28.05 mn have been treated as deferred revenue expenditure and will be written off over the period of 5 years as per policy of the company followed in proceeding years.

(10) Other Operating revenue in Note-17 of financial statements includes FPS License income amounting to Rs 15.40 mn represents Export Incentive under Foreign Trade Policy.

(11) The Inventory valuing Rs 3153.83 mn comprises of raw material, stores & spares, packing material, stock of work in progress, semi finished goods including recovery stock and material at shop floor as physically verified as on 31st March 2015, valued and certified by the management has been considered.

(12) S ince the company has not sent any balance confirmation letters to Sundry parties (Including Debtors, Creditors, Advance to Suppliers and Advance from Customers) as on 31st March, 2015, the balances have been taken as per records of the company.

(13) During the F.Y.2012-13 the company has made application for restructuring of debts under CDR Mechanism which has been approved and stands implemented, the cutoff date being 30th September 2012.The CDR Package broadly includes waiver of penal interest and liquidated damages from cutoff date till implementation of package , reschedulements of term loans , Funding of interest on term loan ,working capital, WCTL, and rupee tied ECB loan for period of 2 years and pledge of 100% of Promoters's share during the currency of restructuring scheme i.e. 37.92 % of the paid up capital of the company and corporate guarantee of group companies. As per CDR Package, the installment for various Term Loans i.e. WCTL,T/L, FITL and interest of various credit facilities were to start from October, 2014. However company has not been able to fulfill obligation towards repayment of installment & Interest as the case may be.

(14) A sum of R.s.260 mn received by company as share application money from Promoters/ Promoters' Associates, to comply a critical condition to infuse an amount of Rs 260 mn in the form of Equity Share Capital of the Company, as stipulated under CDR package sanctioned to the Company pursuant to a scheme approved under the Corporate Debt Restructuring Framework of Reserve Bank of India .Now, the said amount of subscription money of Rs 260 mn has been received by the Company. The special resolution to this effect has been passed by the shareholders of the company by postal ballot on 31st January, 2014, however, the allotment of shares to the proposed allottees is pending awaiting the In-Principle approval of the Stock Exchanges required under the Listing Agreements. The said approval has been pending by stock exchanges due to non furnishing of an undertaking by the lending banks with whom the pre-preferential holdings of the proposed allottees are pledged, pursuant to the conditions of CDR.

(15) The company has incurred losses of Rs 3793.20 mn (PY Rs 1317.34 mn) during the current year and the company has net current liabilities of Rs 1041.11 mn (PY net current assets OF Rs 594.24 mn) as on 31.03.2015. Further the company's accumulated losses have resulted in erosion of its entire net worth. The continuous losses have adversely affected the cash flows of the company.

(16) Cheque payable as on 31st March 2015 amounting to Rs.3.99 mn shown under head "Other liabilities" Rs.0.81 mn of Canara bank cc a/c & Rs.3.18 mn of IDBI bank not cleared till date.

(17) The Company has not been advised about interest by the banks pertaining to the Financial Year 2014-15 after the borrowal accounts of the Company, i.e., credit limit, working capital term loan, term loans and funded interest term loan accounts, became sub-standard. During the year the Company has accounted interest @ 10.50% pa basis, i.e., Rs.496.20 mn on these loan accounts during the year which have been classified as NPA.

(18) During the Financial Year 2014-15 the Company has reversed Deferred Tax Asset (DTA) amounting to Rs. 1282.40 mn and charged the same to Statement of Profit & Loss as a below the Line entry. As per provisions of Accounting Standard-22, "Accounting for taxes on Income" the amount of DTA must be reviewed at each Balance sheet date, and DTA which cannot be realized on Balance Sheet date must not be carried forward. Since the management feels that the Company may not be able to earn substantial income in near future period, which may be able to absorb accumulated losses, the Company relying on concept of prudence and based on expert opinion, has reversed the entire amount of deferred tax hitherto carried forward as an asset and has not created any such asset during the year.

(19) The Company's application to DGFT seeking extension of time for meeting its commitments of export obligations under its advance licenses are pending disposal.

(20) During the year 2014-15, the company has paid Director remuneration to Shri Pranav Gupta &Shri Vineet Gupta at Rs 0.4 mn per month as per limits prescribed under Schedule-XIII of Companies act, 1956. Further in view of Circular issued by Ministry of Corporate affairs by Circular No. 07/2015 dated 10th April 2015 a managerial person may continue to receive remuneration for his remaining term in accordance with terms and conditions approved by company as per relevant provisions of Schedule XIII of earlier Act even if the part of his/her tenure falls after 1st April, 2014 which in case of this company is expiring on 30th August 2016.

(21) Disclosure in accordance with accounting standard (AS 29) Provisions, Contingent Liabilities and Contingent Assets:

(22) Taxation

1 In order to comply with the requirement of Accounting Standard -22 " Accounting for Taxes on Income, the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax for the current period amounting to Rs. 1303.25 mn in the Statement of Profit & Loss.

2 Deferred Tax Asset/ Liability are attributable to the following items:

(23) Fixed Assets possessed by PARABOLIC DRUGS LIMITED are treated as Corporate Assets and are not cash generating units as per Accounting Standard-28. In the opinion of Management, there is no impairment of fixed assets of the Company.

Consequent upon adoption ofAccounting Standard on Employee Benefits" (As 15) (Revised 2005), as required by the Standard, the following disclosures are made :

(As valued and certified by Actuary)

(24) Related Party Disclosures in accordance with the Accounting Standard-18 as notified by the Companies (Accounting Standard) Rules, 2006

Key Management Personnel with whom transactions have taken place during the Year

* 1. Shri Pranav Gupta Managing Director

* 2. Shri Vineet Gupta Whole Time Director

Relatives of Kev Management Personnel with whom transactions have taken place during the Year

1. J.D Gupta (HUF)

* 2. Smt. Rama Gupta

Subsidiary with whom transactions have taken place during the Year

1. Ziven Life Sciences Limited

2. Parabolic Research Labs Limited

Associates with whom transactions have taken place during the Year

* 1. Parabolic Infrastructure Private Limited.

2. Mohali Green Environment Private Limited.

* Subscription money received from promoters towards discharge of their obligation to infuse funds in the company in the form of equity share capital, under the CDR package sanctioned to the company approved under the CDR frame work of RBI

25. Contingent Liabilities

(a) Foreign Letter of Credit/Inland Letter of Credit/Bank guarantee issued by bankers:

(Rs. in Millions)

For the year For the year ended 31st ended 31st Description March, 2015 March, 2014

Letter of Credit (Foreign/ Inland) * 56.16 892.83

Bank Guarantees 27.11 25.50

* Out of above material valuing Rs. 48.99 mn (Previous year Rs 810.85 mn) has been received by 31.03.2015 and credited to respective Creditor Account.

(b) In respect of Income Tax matters pending before appellate authorities/CIT (Appeals) which company expects to succeed, based on decisions of Tribunals/ Courts. There is contingent liability amounting to Rs 79.52 mn.

(c) In respect of Service Tax matters pending before appellate authorities/Commissioner (Appeals) which company expects to succeed, based on decisions of Tribunals/ Courts. There is contingent liability amounting to Rs 3.48 mn.

(d) In respect of Excise Duty matters pending before appellate authorities/Commissioner (Appeals) which company expects to succeed, based on decisions of Tribunals/ Courts. There is contingent liability amounting to Rs 676.15 mn.

(e) in respect of Legal cases against the company, there is contingent liability amounting to Rs 9.55 mn.

26. Segment Reporting:

There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.


Mar 31, 2014

1.(a) Terms/ Rights Attached to Equity Shares

The Company has only One Class of Equity Shares having par value of Rs. 10 each. Each holder of Equity share is entitled to one vote per share with a right to receive per share dividend declared by the company. The company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holder 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.

Terms of borrowings are as under:

Term Loans from Banks are secured by way of 1st pari passu charge on all existing & future fixed assets of the company at all locations with equitable mortgage of land & building, 2nd pari passu charge on all the current assets of the Company and pari passu charge on the collateral properties of M/s Parabolic Infrastructure P Ltd, M/s PNG Trading P Ltd & also personally guaranteed by Mrs. Rama Gupta, Mr. J. D. Gupta, Mr. T. N. Goel, Mr. Pranav Gupta and Mr. Vineet Gupta.

Working Capital borrowings from Banks are secured by way of first pari passu charge on hypothecation of entire present & future current assets of the Company, Second pari passu charge on all fixed assets of the Company and pari passu charge on the collateral properties of M/s Parabolic Infrastructure P Ltd, M/s PNG Trading P Ltd & also personally guaranteed by Mrs. Rama Gupta, Mr. J. D. Gupta, Mr. T. N. Goel, Mr. Pranav Gupta and Mr. Vineet Gupta.

(a) Debit or Credit Balances on whatever account are subject to confirmation/ reconciliation.

(b) The work-in-process / semi - finished goods and by product etc. have been grouped as closing stock and the variation in stock has been worked out accordingly.

(c) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account and vice-versa.

(d) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities.

(e) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.

(f) Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents.

(g) Stock of stores and consumables amounting to Rs. 5.25 mn comprises spares and others consumable items. The value as estimated and certified by the management has been considered.

(h) Fixed Deposit with banks Rs. 57.62 mn (Previous year Rs. 94.38 mn) are pledged as margin money with banks.

(i) The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 47.03 mn have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true financial position of the company as per policy of the company followed in preceding years.

(j) The DEPB Income comprises export benefit against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of Commerce, Govt. of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company.

(k) The Inventory valuing Rs. 36.76 mn comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop floor as physically verified as on 31st March 2014, valued and certified by the management has been considered.

(l) The company has circulated the balance confirmation letters for the balance confirmation from sundry Debtors and Creditors as on 31st March, 2014. However, in the absence of confirmation, the balances have been taken as per records of the company.

(m) During the F.Y. 2013-14, the company has received a sum of Rs. 137.2 mn as share application money from Promoters/ Promoters'' Associates, to comply a critical condition to infuse an amount of Rs. 26 Crore in the form of Equity Share Capital of the Company, as stipulated under CDR package sanctioned to the Company pursuant to a scheme approved under the Corporate Debt Restructuring Framework of Reserve Bank of India .Now, the said amount of subscription money of Rs. 26 Crore has been received by the Company. The special resolution to this effect has been passed by the shareholders of the company by postal ballot on 31st January, 2014. However, the allotment of shares to the proposed allottees is pending awaiting the In-Principle approval of the Stock Exchanges required under the Listing Agreements.

(n) During the F.Y. 2012-13 the company has made application for restructuring of debts under CDR Mechanism which has been approved and stands implemented, the cutoff date being 30th September 2012. The CDR Package broadly includes waiver of penal interest and liquidated damages from cutoff date till implementation of package, reschedulements of term loans, Funding of interest on term loan ,working capital,WCTL,and rupee tied ECB loan for period of 2 years and pledge of 100% of Promoters'' share during the currency of restructuring scheme i.e. 37.92 % of the paid up capital of the company and corporate guarantee of group companies.

(o) There was income tax liability of Rs. 93.2 mn for the AY 2011-2012 on protective basis on account of R & D Expenditure for want of approval , which now has been received and for AY 2012-13 , the company has filed revised return during the FY 2012-13 and there is refund due for the above two Assessment years . During the FY 2013-14, the necessary adjustments have been made under Income Tax adjustment account in the Profit & Loss statement.

(q) Taxation

1. In order to comply with the requirement of section 211(3c) of the Companies Act, 1956 consequent to Accounting Standard -22 " Accounting for Taxes on Income, the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax assets for the current period amounting to Rs. 613.06 Mn in the Statement of Profit & Loss.

(2) The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientific and Industrial Research, Govt. of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala upto 31.03.2016 vide letter No. TU/IV-RD/2502/2013 dated 18th September, 2013.

(3) During the year 2013-2014, the company charged off the un-realizable debit balances amounting to Rs. 839.90 Mn., which has been approved by Audit Committee in it''s meeting held on 29th May 2014 and by the Board of Directors in its meeting held on 30th May 2014.

Notwithstanding, the above recovery process to recover the said amount shall continue.

(4) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfilment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

(5) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O. 301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an ''export oriented company'' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i) (a), 3(ii)(a), 3 (ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

(6) Contingent Liabilities

Letter of Credit (Foreign/ Inland) * 892.83 279.77

Bank Guarantees 25.49 24.04

* Out of above material valuing Rs. 810.85 Mn (Previous year Rs. 260.97 Mn) has been received by 31.03.2014 and credited to respective Creditor Account

(7) Segment Reporting:

There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.


Mar 31, 2013

(a) The company has regrouped/ reclassifi ed the previous year fi gures to correspond with the current year''s classifi cation/ disclosure.

(b) Debit or Credit Balances on whatever account are subject to confi rmation/ reconciliation.

(c) The work-in-process / semi - fi nished goods and by product etc. have been grouped as closing stock and the variation is stock has been worked out accordingly.

(d) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account and vice-versa.

(e) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities.

(f) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Smal and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.

(g) Commission on sales and rebate & discount are accounted for when accounts are fi nally settled with the agents.

(h) Stock of stores and consumables amounting to Rs. 4.33 mn. comprises spares and others consumable items. The value as estimated and certifi ed by the management has been considered.

(i) Fixed Deposit with banks Rs. 94.38 mn. (Previous year Rs. 312.67 mn.) are pledged as margin money with banks.

(j) The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 566.07 mn. have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true fi nancial position of the company as per policy of the company followed in proceeding years.

(k) During the F.Y. 2012-13 the company has received a sum of Rs.122.8 mn. as share application money from Promoters and its Group of Companies being one of the critical condition stipulated under package pursuant to a scheme approved under the Corporate Debt Restructuring Framework of Reserve Bank of India The special resolution to this effect is pending to be passed by shareholders of the company in its meeting/by postal ballet.

(l) During the F.Y. 2012-13 the company has made application for restructuring of debts under CDR Mechanism which has been approved and stands implemented, the cutoff date being 30th September 2012. The CDR Package broadly includes waiver of penal interest and liquidated damages from cutoff date till implementation of package, reschedulement of term loans, Funding of interest on term loan, working capital, WCTL,and rupee tied ECB loan for period of 2 years and pledge of 100% of Promoters''s share during the currency of restructuring scheme i.e. 37.92 % of the paid up capital of the company and corporate guarantee of group companies.

(m) There was income tax liability of Rs.93.2 mn. and Rs.132.9 mn. for the Ay 2011-12 and Ay 2012-13 against which the company has fi led revised return during the fy 2012-13 by taking expert opinion on the issue and there is refund due for the above two assessment year Further proceedings for last 6 years have been completed under section 153A/143(3) of Income Tax Act 1961 during the fy 2012-13 and there is disputed demand of Rs. 63 mn. raised by the department against which the company has fi led an appeal with the appellate authority.

(n) The DEPB Income comprises export benefi t against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of commerce, Govt. of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company.

(o) Export Incentive have been accounted on accrual basis.

(p) The Inventory comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop fl oor as physically verifi ed as on 31st March 2013, valued and certifi ed by the management has been considered.

(q) The company has circulated the balance confi rmation letters for the balance confi rmation from sundry Debtors and Creditors as on 31st March, 2013. However, in the absence of confi rmation, the balances have been taken as per records of the company.

(r) Taxation

1. In order to comply with the requirement of section 211(3c) of the Companies Act, 1956 consequent to Accounting Standard "22 "˜'' Accounting for Taxes on Income, the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax for the current period amounting to Rs. 552.54 mn. in the Statement of Profi t & Loss.

2. Deferred Tax Asset/ Liability are attributable to the following items:

(s) Fixed Assets possessed by PARABOLIC DRUGS LIMITED are treated as Corporate Assets and are not cash generating units as per Accounting Standard-28. In the opinion of Management, there is no impairment of fi xed assets of the Company.

(t) Employee Benefi ts:

Consequent upon adoption of Accounting Standard on Employee Benefi ts" (As 15) (Revised 2005), as required by the Standard, the following disclosures are made :

(u) Related Party Disclosures in accordance with the Accounting Standard-18 as notifi ed by the Companies (Accounting Standard) Rules, 2006

Key Management Personnel with whom transactions have taken place during the Year

1. Shri Pranav Gupta Managing Director

2. Shri Vineet Gupta Whole Time Director Relatives of Key Management Personnel with whom transactions have taken place during the Year

1. Shri J.D Gupta (HUF)

2. Smt. Rama Gupta

3. Mrs. Deepali Gupta

Subsidiary with whom transactions have taken place during the Year

1. Parabolic Research Lab Limited

2. Ziven Life Sciences Limited

Associates with whom transactions have taken place during the Year

1. PNG Trading Private Limited

2. Parabolic Infrastructure Private Limited

3. Vineet Packaging Industries

4. Parabolic Estates Private Limited

5. Saj Infrastructure Private Limited

6. Trackball Technology Private Limited

7. Kenam Education Services Private Limited

8. Spar Engineering & Infrastructure Limited

9. Mohali Green Environment Private Limited

(v) The following expenses incurred during the year as attributable to the fi xed assets (including Capital Work in Progress) have been capitalized:

(w) The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientifi c and Industrial Research, Govt. of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala. The exemption from Director General of Income Tax (Exemption) is extended upto 31.3.2015 for Derabassi and up to 31.03.2013 for Barwala unit.

(wa) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfi llment of conditions stipulated in the circular. The Company has satisfi ed the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

(wb) There is a sum of Rs. 0.59 million outstanding on account of excise duty out of which a sum of Rs. 0.34 mn. has been deposited and balance of Rs. 0.25 million has not been deposited on account of dispute for which appeal is pending.

(wc) The Ministry of Corporate Affairs, Government of India vide its General Notifi cation No. S.O. 301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profi t and loss account. The Company being an "˜export oriented company'' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i) (a), 3(ii)(a), 3 (ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

(wd) Additional information pursuant to the provision of paragraph 3 and 4 of Part-II of Schedule-VI of the Companies Act, 1956. [As certifi ed by the Management and accepted by the Auditors]

(we) Segment Reporting:

There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.


Mar 31, 2012

1 ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS:

(a) During the year ended 31st March 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation for financial statements. However, it has significant impact on presentation and disclosures made in financial statements. The company has also regrouped/ reclassified the previous year figures to correspond with the current year's classification/ disclosure.

(b) Debit or Credit Balances on whatever account are subject to confirmation/ reconciliation.

(c) The work-in-process / semi - finished goods and by product etc. have been grouped as closing stock and the variation is stock has been worked out accordingly.

(d) The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account.

(e) In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities.

(f) The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.

(g) Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents.

(h) Stock of stores and consumables amounting to Rs.7.53 mn comprises spares and others consumable items. The value as estimated and certified by the management has been considered.

(i) Fixed Deposit with banks Rs.312.67 mn. (Previous year Rs.236.71 mn.) are pledged as margin money with banks.

(j) The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 933.38 mn. have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true financial position of the company as per policy of the company followed in proceeding years.

(k) The DEPB Income comprises export benefit against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of commerce, Govt. of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company.

(l) Export Incentive have been accounted on accrual basis.

(m) The Inventory comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop floor as physically verified as on 31st March 2012, valued and certified by the management has been considered.

(n) The company has circulated the balance confirmation letters for the balance confirmation from sundry Debtors and Creditors as on 31st March, 2012. However, in the absence of confirmation, the balances have been taken as per records of the company.

(t) Related Party Disclosures in accordance with the Accounting Standard-18 as notified by the Companies (Accounting Standard) Rules, 2006

Key Management Personnel with whom transactions have taken place during the Year

1. Shri Pranav Gupta Managing Director

2. Shri Vineet Gupta Whole Time Director

Relatives of Key Management Personnel with whom transactions have taken place during the Year

1. Shri J.D Gupta 2. J.D Gupta (HUF)

3. Smt. Rama Gupta 4. Dr. Deepali Gupta

Subsidiary with whom transactions have taken place during the Year

1. Parabolic Research Lab Limited 2. Ziven Life Sciences Limited

Associates with whom transactions have taken place during the Year

1. PNG Trading Private Limited 2. Parabolic Infrastructure Private Limited

3. Vineet Packaging Industries 4. Parabolic Estates Private Limited

5. Saj Infrastructure Private Limited 6. Trackball Technology Private Limited

(zb) Contingent Liabilities (Rs. in million)

As at 31.03.2012 As at 31.03.2011

Letter of Credit (Foreign/ Inland) * 2540.40 1451.41

Bank Guarantees 29.99 30.81

Custom Duty # 21.70 21.70

* Out of above material valuing Rs. 2413.88 Million (Previous year Rs 1232.21 million) has been received by 31.03.2012 and credited to respective Creditor Account.

# The Company has received show clause notices from the Jt. Director General of Foreign Trade towards the non-fulfilment of export obligation against the Advance Licences obtained for import of duty free raw material. Though the company has taken up the matter with appropriate authority for the extension of export obligation period. In this regard the estimated contingent liability is Rs. 21.7 million towards the custom duty.

(zc) Segment Reporting:

There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.


Mar 31, 2011

1. Debit or Credit Balances on whatever account are subject to confirmation/reconciliation.

2. The previousyearfigures have been regrouped/re-arranged wherever considered necessary.

3. The work-in-process / semi - finished goods and by product etc. have been grouped as closing stock and the variation in stock has been worked out accordingly.

4. The Gross Sale includes the element of Excise Duty thereon and the same has been shown as deduction separately.

5. The amount less received from the parties against sales made to them has been charged to Rebate & Discount Account.

6. In the opinion of the Board of Directors, all current assets and loans and advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provisions have been made for all the known liabilities.

7. The Company has called for the information from its suppliers as regard to disclosure required under Micro, Small and Medium Enterprises Development Act, 2006. The replies from most of the suppliers in this regard are still awaited.

8. Commission on sales and rebate & discount are accounted for when accounts are finally settled with the agents.

9. Stock of stores and consumables amounting to Rs. 7.35 million comprises spares and others consumable items. The value as estimated and certified by the management has been considered.

10. Fixed Deposit with banks Rs. 236.71 million (Previous year Rs.150.64 million) are pledged as margin money with banks.

11. The total revenue expenditure incurred during the year on Research & Development amounted to Rs. 640.17 million have been treated as deferred revenue expenditure and will be written off over the period of 5 years so as to depict the true financial position of the company as per policy of the company followed in preceeding years.

12. Export Incentive have been accounted on accrual basis.

13. The DEPB Income comprises export benefit against the DEPB Licenses realized from Director Gen. of Foreign Trade, Ministry of Commerce, Govt, of India on eligible export made by the company and the gain (i.e. the discount amount and resultant difference between the license value and purchase value) on purchase of DEPB License from exporter for the purpose of payment of Custom Duty on import of raw material by the company.

14. The Inventory comprises of raw material, stores & spares, packing material, stock of work in progress including recovery stock and material at shop floor as physically verified as on 31 st March 2011, valued and certified by the management has been considered.

15. Public Issue expenses amounting to Rs.128.40 million represent expenditure incurred by the company in respect of public issue amounting to Rs 2000 million opened for subscription in the month of June, 2010 and such expenses are adjusted against the security premium account.

16. The company has circulated the balance confirmation letters for the balance confirmation from sundry Debtors and Creditors as on 31 st March, 2011. However, in the absence of confirmation, the balances have been taken as per records of the company.

17. Contingent Liabilities (in million)

As at As at 31.3.2011 31.3.2010

(i) Letter of Credit (Foreign/Inland) * 1451.41 856.64

(ii) Bank Guarantees 30.80 10.89

(iii) Custom Duty # 21.70 21.70

* Out of above material valuing Rs. 1232.20 Million (Previous year Rs. 654.38 Million) has been received by 31.03.2011 and credited to respective Creditor Account.

# The Company has received show clause notices from the Jt. Director General of Foreign Trade towards the non-fulfilment of export obligation against the Advance Licences obtained for import of dutyfree raw material. Though the company has taken up the matter with appropriate authority for the extension of export obligation period. In this regard the estimated contingent liability is Rs. 21.70 Million towards the custom duty.

18. Taxation

(a) In order to comply with the requirement of section 211 (3c) of the Companies Act, 1956 consequent to Accounting Standard -22" Accounting for Taxes on Income", the company has followed the deferred tax method of accounting. Consequently the company has accounted the deferred tax for the current period amounting to Rs.21.21 Million in the Profit & Loss Account.

19. Related Party Disclosures

(a) Key Management Personnel:

1. Shri Pranav Gupta Managing Director

2. Shri Vineet Gupta Whole Time Director

3. Dr. Deepali Gupta Whole Time Director (upto Oct'10)

(b) Relatives of Key Management Personnel:

1. Shri J.D. Gupta

2. Sh. Sachin Gupta

.. J.D. Gupta (HUF)

4. Smt. Rama Gupta

(c) Subsidiary:

1. Parabolic Research Lab Ltd.

(d) Associates:

1. PNG Trading Pvt. Ltd.

2. Parabolic Infrastructure Pvt. Ltd.

3. Vineet Packaging Industries

20. Segment Reporting

There is not more than one reportable segment. Hence information as per AS-17 is not required to be disclosed.

21. Fixed Assets possessed by PARABOLIC DRUGS LIMITED are treated as Corporate Assets and are not cash generating units as per Accounting Standard-28 issued by the Institute of Chartered Accountants of India. In the opinion of Management there is no impairment of fixed assets of the Company.

22. The Company has been approved U/s 35 (2AB) of the Income Tax Act, 1961 by the Prescribed Authority i.e. The Secretary, Department of Scientific and Industrial Research, Govt, of India, New Delhi for co-operation in In-house Research and Development facility at Derabassi and Barwala. The exemption from Director General of Income Tax (Exemption) is extended upto 31.3.2015 for Derabassi and up to 31.03.2013 for Barwala unit.

23. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21 st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information of the subsidiaries has been included in the Consolidated Financial Statements.

24. The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O. 301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an 'export oriented company' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i) (a), 3(ii)(a), 3 (ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

(e) Earning in foreign currency

F.O.B. value of Exports Rs.1736.17 Million (Previous Year Rs. 1300.46 Million)

(f) Expenditure in foreign currency

Salary: Rs. 1.57 Million (Previous year Rs. NIL)

Consultancy Expenses: Rs. NIL (Previous year- Rs. 0.34 Million)

Travelling Expenses: Rs. 2.20 Million (Previous year- Rs. 2.02 Million)

Commission on Sales: Rs. 12.00 Million (Previous year - Rs. 16.60 Million)

Fee & Taxes: Rs. 1.50 Million (Previous year - Rs. NIL)

Business Promotion Expenses: Rs. 3.40 Million (Previous year-Rs. 1.49 Million)

Schedule 1 to 17 forms an integral part of Balance Sheet and Profit & Loss Account.

 
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