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Notes to Accounts of Plethico Pharmaceuticals Ltd.

Mar 31, 2014

1.1 The said Investor as on the date of conversion that is 13th August, 2012 did not exercise the option for the conversion hence the initial amount received has been forfeited.

1.2 Provision for Premium Payable made from General Reserve of Rs. NIL during the current period and Rs. 778.44 Million of Previous Year.

1.3 Income Tax Provision provided from 2004-2005 (AY 2005-06) to 2009-10 (AY 2010-11) of Rs. NIL for current period and Rs. 320 million made during previous year.

1.4 The Term Loans taken from EXIM Bank, Mumbai is Secured by :

(a) Exclusive first charge by way of equitable mortgage of company''s land and building situated at Khasra No.821/2, Village Dharawara, Depalpur Tehsil, Indore

(b) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/2, Village Dharawara, Depalpur Tehsil, Indore

(c) Pledge of equity shares of the company by a director of the company.

(d) Personal Guarantee of two directors of the company.

1.5 The Term Loan taken from IDBI Bank is Secured by :

(a) First charge by way of equitable mortgage over company''s land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(b) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the director of the company.

1.6 Vehicle Loan is Secured by hypothecation against related vehicle of the company.

1.7 Terms of Repayment of Secured Term Loans from Banks and others are given below:

1.8 The working capital loans taken from Bank of Baroda are secured by :

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company''s land and building situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore. (ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1,Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the company.

1.9 The working capital loans taken from IDBI Bank are secured by :

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) Second charge by way of equitable mortgage over company''s land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(d) Personal Guarantee of one of the director of the company.

1.10 The working capital loan taken from State Bank of India is secured by :

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the director of the company.

1.11 The working capital loan taken from Punjab National Bank is secured by :

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the Company.

1.12 The working capital loan taken from Allahabad Bank is secured by :

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, 364/1,813/2/1,823/1,823/3 Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, 1/4,1/5,285/3,286/3,286/4,285/2/1 Village Gari Pipliya, Manglia, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore (c) Personal Guarantee of two directors of the Company.

1.13 Amount overdue as on 31st March, 2014 on account of Principal Rs. 537.97 million & Interest Rs. 29.68 million the outstanding is according to the Debt Restructuring Scheme proposed for the Company. Refer Note No. 41 B.2 The company does not have significant influence in any of the above companies as defined under AS18 "Related Party Disclosure" and AS23 "Accounting for Investment in Associates in consolidated financial statements" and as such, all above companies are neither related party nor associate companies within the meaning of above accounting standards. Consequently consolidation of accounts has not been done for the above companies. Refer Note No. 36F.

1.14 The company is duly applying, wherever applicable, to the competent authority for getting extension with respect to the overdue export proceeds in accordance with the provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Export of goods and services) Regulations, 2000.

1.15 Trade Receivables are net of Bill discounting facilities availed by the Company. Bill discounting facility is availed from SICOM for which following is offered as securities:

1) Land Bearing Survey No.285/2/2 admeasuring 51109 sq.ft. bearing Patwari Halka No.26,New No.24 at Village Gram Pipalya, Tehsil Sanwer, Indore along with R & D block i.e. Ground plus two storied building thereon approximately 18000 sq.ft situated in the Registration District and sub-District of Indore.

2) Land bearing Survey Nos 823/2,823/4 & 823/6 at village Dharawara, Tehsil Depalpur, Indore.

3) Plant & Machinery comprising of R&D equipment,etc at the R&D block situate on land bearing Survey No.285/2/2 admeasuring 51109 sq.ft bearing Patwari Halka No.26,New No.24 at Village Gram Pipalya, Tehsil Sanwer, District Indore.

2. Balances with non-scheduled bank

There is no balance in current period (previous year Nil) with non-scheduled bank.

3. Balance Confirmation of Parties

Debtors, Loans & Advances, Creditors and Bills Payable are subject to confirmation by the parties. The company has issued confirmation letters to such parties and differences if any shall be reconciled in the current Period.

4. Current Assets and Liabilities

In opinion of the Board, the provisions for known liabilities are adequate and current assets in the ordinary course of business have a value at least equal to the amount at which they are stated.

31. Regrouping of Figures

The figures of previous year have been regrouped / reclassified wherever necessary to confirm to the current period''s presentation.

5. Related Party Disclosure : As per Accounting Standard -18

A. Name of Related Parties and Description of Relationship

Name Country Relationship

Plazma Laboratories Pvt. Ltd. India Significant influence of Director

Plethico Laboratories Pvt. Ltd. India Significant influence of Directors / Relatives

Plethico Products India Significant influence of Directors / Relatives

Wiscon Pharmaceuticals Pvt. Ltd India Significant influence of Directors / Relatives

Rezcom Realty Pvt Ltd India Significant influence of Directors

Passion Indulge Pvt. Ltd. India Significant influence of Directors

Plethico Global Holdings BV Netherland Wholly owned subsidiary

Plethico International Ltd. UAE Wholly owned subsidiary

Plethico US Holdings KFT Hungary Wholly owned subsidiary (step-down)

Natrol INC USA Wholly owned subsidiary (step-down)

Natrol Global FZ-LLC UAE Wholly owned subsidiary (step-down)

B. Key Managerial Personnel

Name Designation

Mr. Shashikant A. Patel Chaiman Cum Managing Director

Mr. Chirag S. Patel Whole Time Director and CEO

Mrs. Gauravi Parikh Exceutive Director

Mr. Aditya Moona VP - International Marketing & Business

Mr. Anil K Mohta Chief Techincal Officer

Mr. A. K. Rungta Associates VP- Operations

Mr. Kamal Anand VP- CPD

Mr. John Philip Roy VP - International Sales

Mr. Mangesh Joshi VP - Human Resource

The above parties are not treated as Related Parties due to following reasons:

1) The Company or any of its Key Management Personnel ("KMP") do not have any representation on the Board of Directors / Governing Board of any of the aforesaid enterprises

2) The Company or any of its KMP do not even remotely control the appointment and / or constitution of the Board of Directors / Governing Board of any of the aforesaid enterprises

3) The Company do not have any dependence information from any of the aforesaid enterprises

4) The Company has not employed any of its representative or KMP as employee or KMP in any of the aforesaid enterprises

5) The Company or any of its KMP or employees are not involved in the day to day operations or in making policy decisions of any of the aforesaid enterprises

6) The Company has never undertaken any material transactions with any of the aforesaid enterprises

6. Disclosure on Lease as per Accounting Standard 19 on "Accounting for Lease":

"The company has entered into operating lease agreement for office premises, Guest house, warehouse and vehicle renewable on periodic basis and is cancelable. The rental expenses for operating lease are amounting to Rs.28.07 million (Previous year Rs.21.77 million) have been recognized in the P&L account."

7. Employee Benefit

The company has an Employees'' Gratuity Fund managed by Life Insurance Corporation of India. As required by AS-15, the status of the present value of the obligations under the gratuity plan at the end of the period was Rs. 32.19 Million (Previous year Rs. 31.12 Million)whereas fair value of plan assets at the end of the period was of Rs. 38.92 Million (Previous year Rs. 35.00 Million). The total benefit of Rs. 4.31 Million (Previous year Rs. 2.67 Million) has been paid during the period. The return on plan assets during the period was Rs. 3.11 Million (Previous year Rs. 3.02 Million), however there was no excess / short amount over estimated return on plan assets.

8. For Winding up

The Company had issued Foreign Currency Convertible Bonds (FCCB) on 22nd October, 2007 which was due for repayment on 23rd October, 2012 or alternatively, the same was required to be converted into equity shares of the Company. Since the Company had proposed the restructuring of the FCCB to the Bond holders, it had applied to the Reserve Bank of India through Authorized Dealer for seeking approval for elongation of the maturity period of the FCCBs on 22nd October, 2012 and accordingly the Reserve Bank of India granted the approval for elongation of maturity period of the FCCB up to 23rd April, 2013. The Company had applied to Reserve Bank of India vide its letter dated 18th April, 2013, seeking approval for elongation of the maturity period of the FCCB by a period of twelve months . Reserve Bank of India vide its letter dated 15th January, 2014, extended the maturity till 23rd April, 2014. Since the company was unable to obtain the approval of all the bondholders with the restructuring proposal, the Company had again applied for seeking approval for elongation of the maturity period of the FCCB by a period of twelve months through letter dated 22nd April, 2014 which is pending for disposal by the Reserve Bank of India.

The Company had on various occasions requested the Trustees viz. Citibank, in writing, to perform various duties under offering circular. However, the Trustee was negligent in performance of its duties under the said offering circular and did not comply with the requisition made by the company which included circulating the proposal for restructuring to all the bondholders and calling for the meeting of all the bondholders to discuss the same and also furnishing of details of all the bondholders and the details of the beneficial holders of the bonds. In the meantime, disputes had arisen between the Company, Trustee and Bond holders and pursuant to which the Company had filed a suit for damages against Trustees for USD 150 Million and a suit for damages against one of the purported Bond holder for USD 250 Million at District Court, Indore Madhya Pradesh. In consequence thereof, the Trustees had filed a winding up Petition against the Company which is pending for admission. The company has disputed the amount claimed by the Trustee on various grounds and responded to the demands made by the Trustee in this behalf.

The liability of the Company for payments towards principal and maturity premium of the FCCBs would depend upon the outcome of the aforesaid suit filed by the Company and also on the outcome of the winding up petition that has been filed against the company. The winding up petition filed against the Company and the suits filed by the Company against the Trustee and the Bondholder are pending disposal. In spite of the above the financial statements are prepared on going concern basis.

9. Corporate Debt Restructuring

The Lead Bank of the Company has proposed admission of the Company to Corporate Debt Restructuring ("CDR") forum on 29th March, 2014 for providing debt restructuring scheme. The proposed debt restructuring scheme is pending approval of CDR Empowered Group for admission to the CDR forum.

10. Income Tax: (in Contingent Liabilities)

(*) Relates to the demand raised by the Income Tax Department, Indore, for the assessment year 2005-06 to 2011-12, including penal interest and penalties. The Company has preferred appeals before the Commissioner of Income Tax (Appeals), against the said demand. Appeals preferred by the Company are pending for disposal.

in Million AS AT AS AT Particulars 31.03.2014 31.12.2012

11. CONTINGENT LIABILITIES NOT PROVIDED FOR

i Pending Bank Guarantee - 0.16

ii Corporate Guarantee against third party Loan 448.40 2,150.00

iii Pending Letter of Credit 440.11 111.70

iv Estimated amount of contract remaining unexecuted on capital account 2.66 -

v Interest on FCCB not provided for the overdue period 629.24 81.81

12. Deferred Tax Liabilities

The deferred tax liability of Rs. 4,38 million for the period ended 31st March, 2014 has been debited to the profit & loss account.

in Million

Year end Deferred tax Liability comprises

Excess of Book W.D.V Over Tax W.D.V. 4.38 8.40

13. The current accounting period is for a period of 15 Months. The same is in conformity with the amendment of the Companies Act 2013. Hence the financial year of the Company has changed from January-December to April-March.


Dec 31, 2012

1.1 Subscribed and paid up share capital including 2,91,09,060 Equity Shares (Previous year 2,91,09,060) Equity Shares of Rs. 10 each allotted as fully paid bonus shares by way of capitalisation of General Reserve and Share Premium.

2.1 The said Investor as on the date of conversion that is 13th August, 2012 did not exercise the option for the conversion hence the initial amount received has been forfeited.

2.2 Provision for Premium Payable made from General Reserve of Rs. 403.49 Million during the current year and Rs. 374.94 Million of Previous Year.

2.3 Income Tax Provision provided from 2004-2005 (AY 2005-06) to 2009-10 (AY 2010-11) of Rs. 320.00 Million

3.1 The corporate term loan of Punjab National Bank is secured by:

(a) Pledge of company''s equity shares held by one of the Director

(b) Personal Guarantee of one of the Director of the company.

3.2 The term loans taken from EXIM Bank, Mumbai is secured by:

(i) Exclusive first charge by way of equitable mortgage of company''s land and building situated at Khasra No.821/2, Village Dharawara, Depalpur Tehsil, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/2, Village Dharawara, Depalpur Tehsil, Indore

(iii) Pledge of equity shares of the company by a director of the company

(iv) Personal Guarantee of two directors of the company.

3.3 The Term loan of IDBI Bank is secured by:

(a) First charge by way of equitable mortgage over company''s land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(b) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the director of the company.

3.4 Vehicle Loan is secured by hypothecation against related vehicle of the company.

3.5 Provision of Rs. 403.45 Million (Previous year Rs. 540.02 Million) has been made during the year on account of premium payable on redemption of FCCB in terms of the Offering Circular dated 18th October, 2007, which has been charged to the General Reserve Account. The Company has outstanding bonds at face value of USD 75 Million. Till date neither bonds have been converted nor redeemed or cancelled. The term of the bonds are 0% coupon, premium 7.7% YTM, Reset conversion price is Rs. 484/-. The said FCCB had fallen due on 23rd October, 2012 and the company is seeking approval of restructuring of said FCCBs from Bondholders and concern authorities. RBI has approved extension of maturity period in respect of said FCCB up to 23rd April, 2013.

4.1 The working capital loans taken from Bank of Baroda are secured by:

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by:

(i) Equitable mortgage of company''s land and building situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the company.

4.2 The working capital loans taken from IDBI Bank are secured by:

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) Second charge by way of equitable mortgage over company''s land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(d) Personal Guarantee of one of the director of the company.

4.3 The working capital loan taken from State Bank of India is secured by:

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by:

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the director of the company.

4.4 The working capital loan taken from Punjab National Bank is secured by:

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by:

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the company.

4.5 The working capital loan taken from Allahabad Bank is secured by:

(a) Hypothecation of company''s entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by:

(i) Equitable mortgage of company''s land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the director of the company.

5.1 There is no amount due and outstanding to be credited to Investor Education and Protection Fund

5.2 Inter Corporate deposit against Pledge of company''s equity shares held by one of the Directors.

6.1 The company does not have significant influence in any of the above companies as defined under AS18 "Related Party Disclosure" and AS23 "Accounting for Investment in Associates in consolidated financial statements" and as such, all above companies are neither related party nor associate companies within the meaning of above accounting standards. Consequently consolidation of accounts has not been done for the above companies.

7.1 The company is duly applying to the competent authority for getting extension with respect to the overdue export proceeds in accordance with the provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.

8. EXTRA ORDINARY ITEM

The Foreign Exchange loss of Rs. 141.75 million (Previous year loss of Rs. 630.00 Million) arising out of revaluation in respect of outstanding FCCB of USD 75.00 Million as on 31st December,2012 has been recongnised and debited to the Profit and Loss Account of the year as an Extra Ordinary item.

9. EARNING PER SHARE

Basic and Diluted Earning per share (''EPS'') computed in accordance with Accounting standard ( AS ) 20 "Earning per Share"

10. BALANCES WITH NON-SCHEDULED BANK

There is no balance in current year (previous year Rs. Nil) with non-scheduled bank.

11. BALANCE CONFIRMATION OF PARTIES

Debtors, Loans & Advances, Creditors and Bills Payable are subject to confirmation by the parties. The company has issued confirmation letters to such parties and differences if any shall be reconciled in the current Year.

12. CURRENT ASSETS AND LIABILITIES

In opinion of the Board, the provisions for known liabilities are adequate and current assets in the ordinary course of business have a value at least equal to the amount at which they are stated.

13. REGROUPING OF FIGURES

The figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year''s presentation.

14. DISCLOSURE TO MSME ACT.

The company is obtaining confirmation from suppliers regarding the registration under the MSME Act "Micro Small and Medium Enterprises Development Act 2006", which came into effect from 2nd October, 2006. The suppliers are not registered wherever the confirmations are received and in other cases, the company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

15. DISCLOSURE ON LEASE AS PER ACCOUNTING STANDARD 19 ON "ACCOUNTING FOR LEASE"

The company has entered into operating lease agreement for office premises, Guest house, warehouse and vehicle renewable on periodic basis and is cancelable. The rental expenses for operating lease are amounting to Rs. 21.77 Million (Previous year Rs. .21.86) have been recognized in the P&L account.

16. DISCLOSURE REGARDING DERIVATIVE INSTRUMENTS AND UNHEDGED CURRENCY EXPOSURE

There were no foreign exchange derivatives or forward contracts outstanding as on 31st December,2012. The year end foreign currency exposures that have not been hedged by a forward cover or derivative instrument or otherwise are given below

17. EMPLOYEE BENEFIT

The company has an Employees'' Gratuity Fund managed by Life Insurance Corporation of India. As required by AS-15, the status of the present value of the obligations under the gratuity plan at the end of the year was Rs. 31.12 Million whereas fair value of plan assets at the end of the year was of Rs. 35.00 Million. The total benefit of Rs. 2.67 Million has been paid during the year. The return on plan assets during the year was Rs. 3.02 Million; however there was no excess / short amount over estimated return on plan assets.

18 DEFERRED TAX LIABILITIES

The deferred tax liability of Rs. 8.40 Million for the year ended 31st December, 2012 has been debited to the profit & loss account.


Dec 31, 2011

1. Contingent Liabilities not provided for :

(Rs. in Millions)

Particulars 31.12.2011 31.12.2010

i Pending Bank Guarantee 17.92 0.00

ii Corporate Guarantee against 2150.00 125.00 third party loan

iii Pending Letter of Credit 69.97 97.12

iv Estimated amount of contract remaining unexecuted on capital account and not provided for (Advance given Rs. 1.26 million) (Previous Year Rs. 1.03 million). 3.76 2.10

2. The working capital loans taken from Bank of Baroda are secured by :

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(c) Personal Guarantee of two directors of the company.

3. The working capital loans taken from IDBI Bank are secured by :

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) Second charge by way of equitable mortgage over company's land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(d) Personal Guarantee of one of the directors of the company.

5. The working capital loan taken from State Bank of India is secured by :

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(c) Personal Guarantee of a director of the company.

4. The working capital loan taken from Punjab National Bank is secured by:

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis.

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(c) Personal Guarantee of two directors of the company.

5. The working capital loan taken from Allahabad Bank is secured by :

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(c) Personal Guarantee of a director of the company.

6. The corporate term loan of Punjab National Bank is secured by (a) Pledge of company's equity shares held by one of the Directors.

(b) Personal Guarantee of one of the Directors of the company

7. The term loans taken from EXIM Bank, Mumbai is secured by

(i) Exclusive first charge by way of equitable mortgage of company's land and building situated at Khasra No.821/2, Village Dharawara, Depalpur Tehsil, Indore (ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/2, Village Dharawara, Depalpur Tehsil, Indore.

(iii) Pledge of equity shares of the company by a director of the company.

(iv) Personal Guarantee of two directors of the company.

8. The Term loan of IDBI Bank is secured by

(a) First charge by way of equitable mortgage over company's land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(b) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the directors of the company.

9. VehicleHouse Loans are secured by hypothecation of related Vehicle House Property.

10. Term Loan repayable within one year is Rs. 409.21 million (Previous year Rs. 488.00 million).

11. The Foreign Exchange loss of Rs. 630.00 million (previous year gain of Rs. 136.88 Million) arising out of revaluation in respect of outstanding FCCB of USD 75 Million as on 31.12.2011 has been recognized and credited to the Profit and Loss Account of the year as an Extra Ordinary Item.

12. Provision of Rs. 540.02 Mn. (previous year Rs. 268.93 Mn.) has been made during the year on account of premium payable on redemption of FCCB in terms of the Offering Circular dated 18.10.2007, which has been charged to the Share Premium Account Rs. 165.07 Mn. and Profit & Loss Account Rs. 374.95 Mn. The Company currently has outstanding bonds at face value of USD 75 million. Till date no bonds have been converted nor redeemed or cancelled. The term of the bonds are: 0% coupon,7.7% YTM, Reset conversion price is Rs. 484/- and maturity date is October'2012.

13. The company holds 100% equity of Plethico Global Holding BV, Netherlands who in turn holds directly or indirectly 100% equity of Natrol INC, USA, Natrol Global, UAE and Plethico US Holding KFT, Hungary. Therefore, such companies are step down subsidiaries of our company. The company also holds 100% equity of Plethico International Ltd. UAE setting up medicated lozenges and solid dosage formulation manufacturing unit in UAE.

14. The company does not have significant influence in any of the above companies as defined under AS18 "Related Party Disclosure" and AS23 "Accounting for Investment in Associates in consolidated financial statements" and as such, all above companies are neither related party nor associate companies within the meaning of above accounting standards. Consequently consolidation of accounts has not been done for the above companies.

15. There is no Loan & advances outstanding from firms/companies in which director(s) are interested as a Partner or Director.

16. The company is duly applying to the competent authority for getting extension with respect to the overdue export proceeds in accordance with the provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Export of goods and services) Regulations, 2000.

17. Basic and Diluted Earning per share ('EPS') computed in accordance with Accounting standard ( AS ) 20 "Earning per Share"

18. Balance with a non-scheduled bank comprises balance of Rs. 0.00 million (Previous Year Rs. 0.01 Million) in current account with Karur Vysya Bank Ltd.

19. Debtors, Loans & Advances, Creditors and Bills Payable are subject to confirmation by the parties. The company has issued confirmation letters to such parties and differences if any shall be reconciled in the current Year.

20. In opinion of the Board, the provisions for known liabilities are adequate and current assets in the ordinary course of business have a value at least equal to the amount at which they are stated.

21. The figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year's presentation.

22. Computation of Net Profit under Section 349 read with Section 309 (5) and Section 198 of the Companies Act, 1956:

23. The company is obtaining confirmation from suppliers regarding the registration under the MSME Act "Micro Small and Medium Enterprises Development Act 2006", which came into effect from 2nd Oct, 2006. The suppliers are not registered wherever the confirmations are received and in other cases, the company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

24. Additional Information pursuant to provisions of Para 3, 4c of Part II of Schedule VI to the Companies Act, 1956.

25. Segment Information for the year ended 31st December, 2011 Information about Primary Business segment. The company is Exclusively in the healthcare business segments Information about Secondary Geographical segments.

B Key Managerial Personnel

1. Shashikant .A. Patel Chairman cum Managing Director

2. Chirag.S. Patel Whole Time Director and CEO

3. Gauravi.K.Parikh Executive Director

4. Sanjay Pai Chief Finance Officer

5. Anil K Mohta Chief Technical Officer

6. John Philip Roy VP - International Sales

7. Mangesh Joshi GM - HR

No amount have been written off/provided for or written back during the year in respect of debt due from or to related party.

26. Amount Receivable from Managerial Staff Rs. Nil (Max Balance Rs. Nil)

27. Disclosure on Lease as per Accounting Standard 19 on " Accounting for lease": The company has entered into operating lease agreement for office premises, Guest house, warehouse and vehicle renewable on periodic basis and is cancelable. The rental expenses for operating lease are amounting to Rs. 21.86 Mn. (Previous year Rs.21.95 Mn.) have been recognized in the P&L account.

28. The company has an Employees' Gratuity Fund managed by Life Insurance Corporation of India. As required by AS-15, the status of the present value of the obligations under the gratuity plan at the end of the year was Rs. 279.72 Mn. whereas fair value of plan assets at the end of the year was of Rs. 274.90 Mn. The total benefit of Rs.5.43 Mn. has been paid during the year. The return on plan assets during the year was Rs. 2.04 Mn., however there was no excess/short amount over estimated return on plan assets.


Dec 31, 2010

1. Contingent Liabilities not provided for :

(Amount in Millions)

Particulars 31.12.2010 31.12.2009

I Pending Bank Guarantee 0.00 19.71

ii Corporate Guarantee against third party loan 125.00 125.00

iii Pending Letter of Credit 97.12 74.65

iv Estimated amount of contract remaining unexecuted on capital account and not provided for (Advance given Rs.1.03 million) (Previous Year Rs. 1.34 million). 2.10 2.60

2. The working capital loans taken from Bank of Baroda are secured by

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by:

(i) Equitable mortgage of company's land and building situated at Khasra No. 821/1, Village - Dharavara, Tehsil - Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the company.

3. The working capital loans taken from IDBI Bank are secured by

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) Second charge by way of equitable mortgage over company's land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(d) Personal Guarantee of one of the directors of the company.

4. The working capital loan taken from State Bank of India is secured by

(a) Hypothecation of company's entire stocks and book debts on first pari passu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No.821/1, Village - Dharavara, Tehsil - Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore.

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of a director of the company.

5. The working capital loan taken from Punjab National Bank is secured by

(a) Hypothecation of company's entire stocks and book debts on first paripassu charge basis

(b) On first pari passu charge basis by :

(i) Equitable mortgage of company's land and building situated at Khasra No.821/1, Village - Dharavara, Tehsil - Depalpur, Indore and at Khasra No.285/1/2, Village Gari Pipliya, Manglia, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of two directors of the company.

6. The corporate term loan of Punjab National Bank is secured by

(a) Pledge of company's equity shares held by one of the Directors

(b) Personal Guarantee of one of the Directors of the company.

7. Corporate Loan taken from State Bank of India is secured by

(i) pledge of equity shares of the company held by one of the directors of the company

(ii) Personal Guarantee of one of the directors of the company.

8. The term loans taken from EXIM Bank, Mumbai is secured by

(i) exclusive first charge by way of equitable mortgage of company's land and building situated at Khasra No.821/2, Village Dharawara, Depalpur Tehsil, Indore

(ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/2, Village Dharawara, Depalpur Tehsil, Indore

(iii) pledge of equity shares of the company by a director of the company

(iv) Personal Guarantee of two directors of the company.

9. The Term loan of IDBI Bank is secured by

(a) First charge by way of equitable mortgage over company's land and building situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(b) Hypothecation of Plant and Machinery installed in the factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore

(c) Personal Guarantee of one of the directors of the company.

10. Vehicle House Loans are secured by hypothecation of related Vehicle House Property.

11. Term Loan repayable within one year is Rs. 488.00 million (Previous year Rs. 280.28 million)

12. The Foreign Exchange Gain of Rs.136.88 million (previous year gain of Rs. 163.50 Million) arising out of revaluation in respect of outstanding FCCB of USD 75 Million as on 31.12.2010 has been recognized and credited to the Profit and Loss Account of the year as an Extra Ordinary Item.

13. Provision of Rs.268.93 million (previous year Rs. 285.99 Million.) has been made during the year on account of premium payable on redemption of FCCB in terms of the Offering Circular dated 18.10.2007, which has been charged to the Share Premium Account. The Company currently has outstanding bonds at face value of USD 75 million. Till date no bonds have been converted nor redeemed or cancelled. The term of the bonds are: 0% coupon,7.7% YTM, Reset conversion price is Rs.484/- and maturity date is October, 2012.

14. The company holds 100% equity of Plethico Global Holding BV, Netherlands who in turn holds directly or indirectly 100% equity of Natrol INC, USA, Natrol Global, UAE and Plethico US Holding KFT, Hungary. Therefore, such companies are step down subsidiaries of our company. The company also holds 100% equity of Plethico International Ltd. UAE setting up medicated lozenges and solid dosage formulation manufacturing unit in UAE.

15. The company does not have significant influence in any of the above companies as defined under AS18 "Related Party Disclosure" and AS23 "Accounting for Investment in Associates in consolidated financial statements" and as such, all above companies are neither related party nor associate companies within the meaning of above accounting standards. Consequently consolidation of accounts has not been done for the above companies.

16. There is no amount outstanding or due from firms/companies in which director(s) are interested as a Partner or Director.

17. The company is duly applying to the competent authority for getting extension with respect to the overdue export proceeds in accordance with the provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Export of goods and services) Regulations, 2000.

18. During the year under review, the company was subject to search and seizure operations by the Income Ta x department (Investigation). During the course of the search, certain documents and articles were seized from different locations and statements of company's various executives including Chairman and Managing Directors were recorded. Pursuant to the ongoing proceedings, the final tax liability has not been determined hence provision made during the year for the tax liability is subject to final assessment.

19. Balance with a non-scheduled bank comprises balance of Rs.0.01 million (Previous Year 1.42 Million) in current account with Karur Vysya Bank Ltd.

20. Debtors, Loans & Advances, Creditors and Bills Payable are subject to confirmation by the parties. The company has issued confirmation letters to such parties and differences if any, shall be reconciled in the current Year.

21. In opinion of the Board, the provisions for known liabilities are adequate and current assets in the ordinary course of business have a value at least equal to the amount at which they are stated.

22. The figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year's presentation.

23. The company is obtaining confirmation from suppliers regarding the registration under the MSME Act "Micro Small and Medium Enterprises Development Act 2006", which came into effect from Oct 2,2006. The suppliers are not registered wherever the confirmations are received and in other cases, the company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

24. Additional Information pursuant to provisions of Para 3, 4c of Part II of Schedule VI to the Companies Act, 1956.

25. Segment Information for the year ended 31st December, 2 010 Information about Primary Business segment. The company is Exclusively in the health care business segments Information about Secondary Geograp

26. Amount Receivable from Managerial Staff Rs. Nil (Max Balance Rs Nil)

27. Disclosure on Lease as per Accounting Standard 19 on " Accounting for lease ":The company has entered into operating lease agreement for office premises, Guest house, warehouse and vehicle renewable on periodic basis and is cancelable. The rental expenses for operating lease are amounting to Rs.21.95 million (Previous year Rs.20.67 million) have been recognized in the P&L account.

28. The company has an Employees' Gratuity Fund managed by Life Insurance Corporation of India. As required by AS-15, the status of the present value of the obligations under the gratuity plan at the end of the year was Rs.28.99 million whereas fair value of plan assets at the end of the year was of Rs.33.14 million. The total benefit of Rs.0.85 million has been paid during the year. The return on plan assets during the year was Rs.2.05 million; however there was no excess / short amount over estimated return on plan assets.

29. The deferred tax liability of Rs. 10.54 million for the year ended Dec. 31,2010 has been debited to the profit & loss account.


Dec 31, 2009

(Amount in Millions

31.12.2009 31.12.2008

i Pending Bank Guarantee 19.71 0.330

ii Corporate Guarantee against third party loan 125.00 56.00

iii Pending Letter of Credit 74.65 44.33

iv Estimated amount of contract remaining unexecuted on 2.60 7.83 capital account and not provided for (Advance given Rs.1.34 million) (Previous Year Rs.3.58 million).

2 The working capital loans taken from Bank of Baroda are secured by (a) Hypothecation of companys entire stocks and book debts on first pari passu charge basis (b) On first pari passu charge basis by (i) Equitable mortgage of companys land and building situated at Khasra No. 821/1, Village Dharavara,Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore. (ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/1, Village Dharavara,Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore (c) Personal Guarantee of two directors of the company.

3 The working capital loans taken from State Bank of Indore are secured by (a) Hypothecation of companys entire stocks and book debts on first pari passu charge basis (b) First and exclusive charge by way of equitable mortgage over companys land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia, Indore (c) Hypothecation of Plant and Machinery installed in thefactory premises situated at Khasra No. 285/1 /I, Village Gari Pipliya, Manglia, Indore (d) Personal Guarantee of two directors of the company.

4 The working capital loan taken from State Bank of India is secured by (a) Hypothecation of companys entire stocks and book debts on first pari passu charge basis (b) On first pari passu charge basis by (i) Equitable mortgage of companys land and building situated at Khasra No.821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore. (ii) Hypothecation of Plant and Machinery installed in theaforesaid factory premises situated at Khasra No. 821/1, Village Dharavara,Tehsil Depalpur, Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore (c) Personal Guarantee of a director of the company.

5 The working capital loan taken from HSBC Bank is secured by (i) pledge of equity shares of the company by a director of the company (ii) Personal Guarantee of two directors of the company.

6 The non-funded Limit sanctioned by Bank of India is secured by (i) pledge of equity shares of the company by a director of the company (ii) second pari passu charge over the current assets and fixed assets other than those specifically charged to other lenders (iii) Personal Guarantee of two directors of the company.

7 The term loan taken from State Bank of Indore, Industrial Finance Branch, Indore is secured on first charge basis by (i) Equitable mortgage of companys land and building situated at Khasra No.285/1/1, Village Gari Pipliya, Manglia Indore (ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore (iii) Personal Guarantee of two directors of the company.

8 Corporate Loan taken from State Bankof India is secured by (i) pledge of equity shares of the company by a director of the company (ii) Personal Guarantee of a director of the company.

9The term loan taken from EXIM Bank, Mumbai is secured by (i) exclusive first charge by way of equitable mortgage of companys land and building situated at Khasra No.821/2, Village Dharawara, DepalpurTehsil, Indore (ii) Hypothecation of Plant and Machinery installed in the aforesaid factory premises situated at Khasra No. 821/2, Village Dharawara, DepalpurTehsil, Indore (iii) pledge of equity shares of the company by a director of the company (iv) Personal Guarantee of two directors of the company.

10 Term loan taken from Karur Vysya Bank is secured by (i) pledge of equity shares of the company by a director of the company (ii) Personal Guarantee of a director of the company.

11 Term loan taken from Allahabad Bank is secured by (i) pledge of equity shares of the company by a director of the company (ii) subservient charge on working capital securities.

12 Vehicle House Loans are secured by hypothecation of related Vehicle House Property.

13 Term Loan repayable within one year is Rs. 280.28 million (Previous year Rs.708.90 million)

14 The Foreign Exchange Gain of Rs.163.50 million (previous year loss of Rs.682.50 Million.) arising out of revaluation in respect of outstanding FCCB of USD 75 Million as on 31.12.2009 has been recognized and credited to the Profit and Loss Account oftheyear as an Extra Ordinary Item.

15 Provision of Rs.285.99 million (previous year Rs.343.35 Million.) has been made during the year on account of premium payable on redemption of FCCB in terms of the Offering Circular dated 18.10.2007, which has been charged to the Share Premium Account. The Company currently has outstanding bonds at face value of USD 75 million. Till date no bonds have been converted nor redeemed or cancelled. The term of the bonds are: 0% coupon,7.7% YTM, Reset conversion price is Rs.484/-and maturity date is October2012.

16 The company holds 100% equity of Plethico Global Holding BV, Netherlands who in turn holds directly or indirectly 100% equity of Natrol INC, USA, Natrol Global, UAE and Plethico US Holding KFT, Hungary. Therefore, such companies are step down subsidiaries of our company. The company also holds 100% equity of Plethico International Ltd. UAE setting up medicated lozenges and solid dosageformulation manufacturing unit in UAE.

"The company does not have significant influence in ANY the above companies as defined under AS 18" Related Party Disclosure" and AS 23 " Accounting for Investment in Associates in consolidated financial statements" and as such, all above companies are neither related party nor associate companies within the meaning of above accounting standards. Consequently consolidation of accounts has not been doneforthe above companies. 19 There is no amount outstanding or due from firms/companies in which director(s) are interested as a Partner or Director

17 The company is duly applying to the competent authority for getting extension with respect to the overdue export proceeds in accordance with the provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Export of goods and services) Regulations, 2000.

18 Balance with a non-scheduled bank comprises balance of Rs.1.42 million (Previous Year 1.40 Million) in current account with KarurVysya Bank Ltd..

19 Debtors, Loans & Advances, Creditors and Bills Payable are subject to confirmation by the parties. The company has issued confirmation letters to such parties and differences if any, shall be reconciled in the current Year.

20 In opinion of the Board, the provisions for known liabilities are adequate and current assets in the ordinary course of business have a value at least equal to the amount at which they are stated.

21 The figures of previous year have been regrouped / reclassified wherever necessary to conform to the current years presentation.

22 The company is obtaining confirmation from suppliers regarding the registration under the MSME Act "Micro Small and Medium Enterprises Development Act 2006", which came into effect from Oct 2,2006.The suppliers are not registered wherever the confirmations are received and in other cases, the company is not aware of their registration status and hence information relating to outstanding balance or interest due is not disclosed as it is not determinable.

23 RELATED PARTY DISCLOSURE: AS PER ACCOUNTING STANDARD -18.

A Name of related parties and description of relationship

Sr.

No. Name Country Relationship

1 Plazma Laboratories Pvt. Ltd. India Significant influence of Director

2 Plethico Laboratories Pvt. Ltd. India Significant influence of Directors/Relatives

3 Plethico Products India Significant influence of Directors /Relatives

4 Wiscon Pharmaceuticals Pvt. Ltd India Significant influence of Directors / Relatives

5 Plethico Global Holdings BV Netherlands Wholly owned subsidiary

6 Plethico International Ltd. UAE Wholly owned subsidiary -Mm 7 Plethico US Holdings KFT Hungary Wholly owned subsidiary (step-down)

8 Natrol INC USA Wholly owned subsidiary (step-down)

9 Natrol Global FZ-LLC UAE Wholly owned subsidiary (step-down)

B Key Managerial Personnel

1. Shashikant .A. Patel Chairman cum Managing Director

2. Chirag.S. Patel Whole Time Director and CEO

3. Gauravi.K.Parikh Executive Director 4. Rajiv Bedi President

5. HemantModi Chief Operating Officer

6. SanjayPai Chief Finance Officer

24 Amount Receivable from Managerial Staff Rs. Nil (Max Balance Rs Nil)

25 Disclosure on Lease as per Accounting Standard 19 on" Accounting for lease":

The company has entered into operating lease agreement for office premises, Guest house, warehouse and vehicle renewable on periodic basis and is cancelable.The rental expenses for operating lease are amounting to Rs.20.67 million (PreviousyearRs.20.57 million) have been recognized in the profit and loss account.

26 There were no foreign exchange derivative or forward contracts outstanding as on 31.12.2009. The year end foreign currency exposures that have not been hedged by a forward cover or derivative instrument or otherwise are given below:

27 The company has an Employees Gratuity Fund managed by Life Insurance Corporation of India. As required by AS-15, the status of the present value of the obligations under the gratuity plan at the end of the year was Rs.21.39 million whereas fair value of plan assets at the end of the year was of Rs.22.52 million. The total benefit of Rs.0.83 million has been paid during the year. The return on plan assets during the year was Rs.1.79 million; however there was no excess / short amount over estimated return on plan assets.

28 The deferred tax liability of Rs. 1.19 million forthe year ended 31 "Dec, 2009 has been debited to the profit & loss account.

 
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