Notes to Accounts of Smruthi Organics Ltd.

Mar 31, 2018

1. Background:

Smruthi Organics Limited (the company’) is a company limited by shares, incorporated and domiciled in India. The company is engaged in the manufacture of Active Pharmaceutical ingredients (API’s) i.e. Bulk Drugs and Drug Intermediates.

2. During the year, the company has paid to BSE Ltd of Rs. 28,75,000 for initial listing fees and other necessary and other necessary charges and same is debited to Profit And Loss account .

3. Contingent Liability and Commitments:

- A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

- A present obligation arising from past events, when no reliable estimate possible;

- A possible obligation arising from the past events, unless the probability of outflow of resources is remote.

4. Critical estimates and Judgments:

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Managements also needs to exercise judgment in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of item which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statement.

The areas involving critical estimates or judgments are :

I. Estimation of current expense and payable

II. Estimation of defined benefit obligations

III. Allowance for uncollected accounts receivable and advances-Trade receivable do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrevocable amounts. Individual trade receivable are written off when management deems them not to be collectible.

Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

5. Corporate Social Responsibility (CSR) Expenditure

The Company has incurred a total expenditure of Rs 476467 during the year under audit.

6. Risk Exposure

Through its defined benefit plans, the company is exposed to a number of risk, the most significant of which are detailed below ;

Interest rate risk : The plan exposes the Company to the risk of change in interest rate of the borrowings

Salary Escalation Risk: The present value of the defined benefit is not calculated with the assumption of salary increase rate of plan participants in future.

Demographic Risk : The Company has to use certain mortality and attrition in assumption in valuation of the liability. The company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Asset Liability Mismatching or Market Risk :

The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and purchases from overseas suppliers in various foreign currencies. Market Risk is the risk that changes in market prices such as foreign exchange rates will effect groups income or value of its holding financial assets / instruments.

Financial Risk Management Objectives and Policies

The Company’s activities expose it to a variety of financial risks, market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables and other receivables etc. that arise from its operations

Credit Risk

Credit risk refers to the risk of default on its obligation by the customer / counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets. Trade receivables and unbilled revenue are typical unsecured and are derived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109 the Company uses expected credit loss model to assess the impairment loss or gain.

Liquidity Risk

The Company’s principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding.

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Mar 31, 2016

*1st mortgage / hypothecation charge on pari-passu basis with Axis Bank on Land & building and Plant and Machinery owned by the company situated at Plot No.273 & 274 MIDC,Akkalkot Road, Solapur 413006 & Plot No.A-27, MIDC Chincholi, Solapur- 413 255, First Charge on company''s - Flat No 5, Rahul Neha Apt. Solapur , Flat No T/1 , Balaji Apt. Solapur,Holiday Resaurt at Plot No 31, Nakoda Constr. at village. Pakani Solapur, N.A. Plots GAT No. 230/2/B/2, 233/2/B, 231/2/B, 230/2/A/2 situated at Village Chincholi, Taluka Mohol, Dist. Solapur. First pari- passu charges on the above assest for Term Loan of Rs. 15.75 crores from Axis Bank Pune. The Term Loan of Axis Bank Rs 15.75 crore is repayable in 60 months equal installment along with interest from 01.01.2013. Additional l collatoral Security of Mumbai Flat and eight Flats located at Solapur in the name of Company and one flat in the name of Mr. E.Purushotham, Managing Director of the Company in favour of State bank of India. Axis bank, Pune has sanctioned Term Loan-II of Rs. 3.50 crores repayable in 28 months after One year Moratorium by various installments. State Bank of India has restructure the account and sanctioned Rs. 6.00 Crores Working Capital Term Loan repayable from Apr 2016 to Mar 2020 by various installments.

*Personal guarantee of Mr E Purushotham , Managing Director and Mrs. E Vaishnavi Director.

**Deferred Sales Tax Loan is interest free and payable in yearly in 5 installment of each financial year after completion of 10 years and the final installment will due on 26.04.2022 *1st registered mortgage / hypothecation charge on pari-passu basis with Axis Bank on Land & building and Plant and Machinery owned by the company situated at Plot No.273 & 274 MIDC,Akkalkot Road, Solapur 413006 & Plot No.A-27, MIDC Chincholi, Solapur- 413 255, First Charge on company''s - Flat No 5, Rahul Neha Apt. Solapur , Flat No T/1 , Balaji Apt. Solapur,Holiday Resaurt at Plot No 31, Nakoda Constr. at village. Pakani Solapur, N.A. Plots GAT No. 230/2/B/2, 233/2/B, 231/2/B, 230/2/A/2 situated at Village Chincholi, Taluka Mohol, Dist. Solapur. Company has also offered additional collatoral Security of Mumbai Flat and eight Flats located at Solapur in the name of Company and one flat in the name of Mr. E.Purushotham, Managing Director of the Company in favour of State bank of India as per revised sanction letter. During the last year State Bank of India has restructuring of Working Capital Limit sanctioned Rs. 6.00 Crores repayable from Apr 2016 to Mar 2020 by various installments.

*Personal guarantee of Mr E Purushotham , Managing Director and Mrs. E Vaishnavi, Director.

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Mar 31, 2015

1. Segment Reporting :

The company operates in only one segments viz. Bulk Drugs & Drug Intermediates

2. Contingent Liabilities:

Sales tax appeal is pending with JCST (Appeal ) Solapur for FY 2009-10 and 2011-12 for Rs. 21.83 lacs. Cenvat setoff of EOU unit appeal is pending with Additional Commissioner of Central Excise, Pune for 2007 to 2011 four years amounting to Rs. 57.44 lacs and with Tribunal Pune for FY 2009-10 for Rs. 1.09 lacs

3. The company computed the expenditure to be i ncurred on Corporate Social Responsibility at Rs. 22.14 lacs in accordance with the provisions of Section 135 of the Companies Act, 2013.

4. Previous year's figures are regrouped and reclassified wherever considered necessary.

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Mar 31, 2014

1. Corporate Information :

Smruthi Organics Ltd is a public company domiciled in India and incorporates under the provisions of the Companies Act, 1956. It'' s shares are listed on Stock Exchange of Pune, Hyderabad, Ahmadabad and Mumbai as permitted by security in India. The company is engaged in the manufacturing and selling Bulk Drugs and Intermediates, Fine chemicals (APIs). The company caters to both domestic and international market.

2. Basis of Preparation :

The Financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statement to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for land and building acquired before 1 April 2007 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

(3) The company has drawn Foreign L/cs of Rs. 1954.00 lacs towards import of raw materials to various parties and outstanding of L/cs at closing day of the year are Rs. 756.00 lacs. (Previous Year Rs. 271.00 Lacs)

(4) The bank guarantee of Rs. 23.87 lacs is issued to MPCB, Government Authorities during the year.(Previous Year Rs. 11.00 Lacs) . MPCB has levied penalty Rs. 5.00 lacs for non compliances of norms within stipulated period.

(5) The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current year''s Financial statements.

(6) Sundry debtors in schedule includes Rs. 2301.35 lacs due for a period of more than six months. Provision for debts considered as a doubtful aggregating to Rs. 2301.35 lacs has not been made as recovery efforts are under progress.

(7) In the opinion of the Board, Current Assets, Loans and Advances including capital advances as on 31.03.2014 have a value on realization in the ordinary course of the business at least equal to the amount which they are stated.

(8) As regards the disclosure of particulars of amounts owned by the company to small scale industrial under-taking that are required to be disclosed in the Balance Sheet in pursuance of amendment to Schedule VI of the Companies Act 1956 vide Notification No. GSR-129 (E), dated 22.02.1999 issued by the Department of Company Affairs, the Company is in possession of information as to the business, industrial status of its creditors. The name of Small Scale Industrial undertakings to whom the Company owes a sum exceeding Rs. 1.00 Lac which is outstanding for not more than 30 days included in Sundry Creditors is Rs 1388055/-

(9) The Company is primarily engaged in the segment of "Bulk Drugs and Drug Intermediates" and there is no reportable segments as per Accounting Standard (AS-7>

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Mar 31, 2013

1. Corporate Information

Smruthi Organics Ltd is a public company domiciled in India and incorporates under the provisions of the Companies Act, 1956. It''s shares are listed on Stock Exchange of Pune, Hyderabad, Ahmadabad & Mumbai as permitted by security in India. The company is engaged in the manufacturing and selling Bulk Drugs and Intermediates, Fine chemicals (APIs). The company caters to both domestic and international market.

2. Basis of Preparation

The Financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statement to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for land and building acquired before 1 April 2007 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

A) The company has drawn Foreign L/cs of Rs.2014.00 lacs towards import of raw materials to various parties and outstanding of L/cs at closing day of the year are Rs.271.00 lacs. (Previous Year Rs.891.00 Lacs)

B) The bank guarantee of Rs. 11.00 lacs is issued to MPCB Government Authorities during the year.(Previous Year Rs. 15.00 Lacs) . MPCB has levied penalty Rs. 5.00 lacs for non compliances of norms within stipulated period.

C) The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current year''s Financial statements.

D) The Company has availed the benefit of DEPB License for the Financial year 2012-13 of Rs. 51.45 Lacs The said benefit has been treated as income of the year under audit. Out of this income, Rs. 17.87 Lacs, debited to raw material consumption, and Rs. 33.58 Lacs DEPB incentive to be claimed for CENVAT respectively.

E) Event Occurred after Balance Sheet : During the year under audit, the Company has provided loss against sales returns up to the date of audit of Rs.62.00 lacs as per Accounting Standard 4 and reduced the value of closing stock of Metformin due to destroyed worth of Rs. 27.08 lacs.

F) Sundry debtors in schedule includes Rs.5.73 lacs due for a period of more than six months. Provision for debts considered as a doubtful aggregating to Rs. 5.73 lacs has not been made as recovery efforts are under progress.

G) Related Party Disclosures : AS-18

i) Name of Related Party : Smruthi Chemicals & Intermediates

Proprietor : Mrs. E.Vaishnavi

Relationship : Director in Company & Wife of Managing Director Nature of the Transaction a) Job-work Charges (done by SC & I)

b) Job-work Charges (done by SOL)

c) Raw Mat. Pur. (High-seas/Local from SOL)

d) Interest paid on Unsecured Loan Transaction value (Rs.) a) Rs. 4278630

b) Rs. 190800

c) Rs. 2249956

d) Rs. 745900 Balance Outstanding Rs. NIL Receivable/Payable(-)

As on Balance Sheet Date

ii) Name of Related Party : Mr. Eaga Swapnil

Relationship : Director of the Company & Son of Managing Director Nature of the Transaction a) Car Rent Paid

b) Interest paid on Unsecured Loan Transaction value (Rs.) a) Rs. 492000/-

b) Rs. 259857/- Balance Outstanding Rs. NIL Receivable/Payable(-) As on Balance Sheet Date

iii) Name of Related Party : Mr. Eaga Yadgiri

Relationship : Brother of Managing Director : Nature of the Transaction a) Tractor Rent Paid Transaction value (Rs.) Rs. 125000/-

Balance Outstanding Rs. NIL

Receivable/Payable(-) As on Balance Sheet Date

iv) Name of Related Party : Mr. Eaga Madanmohan Relationship : Nephew of Managing Director Nature of the Transaction a) Tempo Rent Paid Transaction value (Rs.) Rs. 742250/-

Balance Outstanding Rs. NIL

Receivable/Payable(-) As on Balance Sheet Date

v) Name of Related Party : Mr. Eaga Purushotham Relationship : Managing Director of Comapny

Nature of the Transaction a) Unsecured Loan Interest paid Interest Paid (Rs.) Rs. 1931455/-

Balance Outstanding Rs. NIL

Receivable/Payable(-) As on Balance Sheet Date

H) In the opinion of the Board, Current Assets, Loans and Advances including capital advances as on 31.03.2013 have a value on realization in the ordinary course of the business at least equal to the amount which they are stated.

I) As regards the disclosure of particulars of amounts owned by the company to small scale industrial under-taking that are required to be disclosed in the Balance Sheet in pursuance of amendment to Schedule VI of the Companies Act 1956 vide Notification No. GSR-129 (E), dated 22.02.1999 issued by the Department of Company Affairs, the Company is in possession of information as to the business, industrial status of its creditors. The name of Small Scale Industrial undertakings to whom the Company owes a sum exceeding Rs. 1.00 Lac which is outstanding for not more than 30 days included in Sundry Creditors is Rs 3936561/-

J) Balance Sheet Abstract and Company''s General Business Profile.

K) Registration details

Registration No. : 52562 State Code : 11

Balance Sheet Date : 31.03.2013

II) Capital raised during the year (Amount in thousands)

Public Issue : NIL Rights Issue : NIL

Bonus Issue : NIL Private Placement : NIL

L) The Company is primarily engaged in the segment of "Bulk Drugs and Drug Intermediates" and there is no reportable segments as per Accounting Standard (AS-17)

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Mar 31, 2012

1. Corporate Information

Smruthi Organics Ltd is a public Company domiciled in Indian and incorporate under the provisions of the Companies Act, 1956. It' s shares are listed on Stock Exchange of Pune, Hyderabad, Ahmedabad and Mumbai as permitted by security in India. The Company is engaged in the manufacturing and selling Bulk Drugs and Intermediates, Fine chemicals (APIs). The Company caters to both domestic and international market.

2. Basis of Preparation

The Financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these Financial statement to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The Financial statements have been prepared on an accrual basis and under the historical cost convention, except for land and building acquired before 1st April, 2007 which are carried at revalued amounts.

The accounting policies adopted in the preparation of Financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

A) The Company has drawn Foreign L/c's of Rs.2051 Lacs towards import of raw materials to various parties and outstanding of L/c's. at closing day of the year are Rs. 891 Lacs. (Previous Year Rs. 322 Lacs)

B) The bank guarantees of Rs.15.00 Lacs are issued to various Government Authorities.(Previous Year Rs. 14.00 Lacs)

C) The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current year's Financial statements.

D) The Company has availed the benefit of DEPB License of the Financial year 2011-12 of Rs.96.48 Lacs The said benefit has treated as income of the year under audit. Out of this income, Rs. 34.78 Lacs, debited to raw material consumption, and Rs. 61.69 Lacs DEPB incentive to be claim for CENVAT respectively.

E) Sundry debtors in schedule includes Rs.9.37 Lacs due for a period of more than six months. Provision for debts considered as a doubtful aggregating to Rs. 9.37 Lacs has not been made as recovery efforts are under progress.

No amounts in respect of related parties have been written off / written back during the year.

Related party relationship have been identified by the management and relied upon by the Auditors.

F) In the opinion of the Board, Current Assets, Loans and Advances including capital advances as on 31.03.2012 have a value on realization in the ordinary course of the business at least equal to the amount which they are stated.

G) As regards the disclosure of particulars of amounts owned by the Company to Small Scale Industrial under-taking that are required to be disclosed in the Balance Sheet in pursuance of amendment to Schedule VI of the Companies Act 1956 vide Notification No. GSR-129 (E), dated 22.02.1999 issued by the Department of Company Affairs, the Company is in possession of information as to the business, industrial status of its creditors. The name of Small Scale Industrial undertakings to whom the Company owes a sum exceeding Rs. 1.00 Lac which is outstanding for not more than 30 days included in Sundry Creditors is Dhanashree Polymers Pvt Ltd 440075/-.

H) Till the year ended 31 March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation & presentation of its Financial statements. During the year ended 31 March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to Company. The Company has reclassified previous year figures to conform to this year's classification.

I) The Company is primarily engaged in the segment of "Bulk Drugs and Drug Intermediates" and there is no reportable segments as per Accounting Standard (AS-17)

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Mar 31, 2011

(A) The company has drawn Foreign L/cs of Rs.2024 lacs towards import of raw materials to various parties and outstanding of L/cs. at closing day of the year are Rs. 322 Lacs. (Previous Year Rs.760 Lacs)

(B) The bank guarantees of Rs. 14.00 lacs are issued to various Government Authorities.(Previous Year Rs. 14.00 lacs)

(C) The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current years financial statements.

(D) The Company has availed the benefit of DEPB License of the Financial year 2009-10 and 2010-11 of Rs. 15.51 lacs and Rs. 54.51 lacs respectively the total amounting to Rs.70.02 lacs. The said benefit has treated as income of the year under audit. Out of this income, Rs. 19.03 lacs, Rs.27.85 lacs and Rs. 23.14 lacs is debited to raw material comsumption, CENVAT account, and DEPB incentive to be claim for CENVAT respectivelay.

(E) Sundry debtors in schedule includes Rs. 13.63 lacs due for a period of more than six months. Provision for debts considered as a doubtful aggregating to Rs. 13.63 lacs has not been made as recovery efforts are under progress.

No amounts in respect of related parties have been written off / written back during the year.

Related party relationship have been identified by the management and relied upon by the Auditors.

(F) In the opinion of the Board, Current Assets, Loans and Advances including capital advances as on 31.03.2011 have a value on realization in the ordinary course of the business at least equal to the amount which they are stated.

(G) As regards the disclosure of particulars of amounts owned by the company to small scale industrial under-taking that are required to be disclosed in the Balance Sheet in pursuance of amendment to Schedule VI of the Companies Act 1956 vide Notification No. GSR-129 (E), dated 22.02.1999 issued by the Department of Company Affairs, the Company is in possession of information as to the business, industrial status of its creditors.

The name of Small Scale Industrial undertakings to whom the Company owes a sum exceeding Rs. 1.00 Lac which is outstanding for not more than 30 days included in Sundry Creditors is S.M. Labs Pvt Ltd 227279/-

(H) The figures of the previous year have been re-grouped and re-arranged wherever necessary.

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Mar 31, 2010

(A) The company has drawn Foreign L/cs of Rs.1616 lacs towards import of raw materials to various parties and outstanding of L/cs. at closing day of the year are Rs. 760 Lacs. (Previous Year Rs.841 Lacs)

(B) The bank guarantees of Rs. 14.00 lacs are issued to various Government Authorities.(Previous Year Rs. 20.00 lacs)

(C) The accounts of certain sundry debtors, sundry creditors, advances are subject to confirmation / reconciliation and adjustments if any. The management does not expect any material difference affecting the current years financial statements.

(D) Non-Convertible Cumulative Redeemable Preferance Shares of Rs. 10/- each aggregating to Rs. 5.00 Crores are not subscribed by the Promoters till the date of audit.

(E) During the year, the Company has transferred the Octroi Duty receivable from WMDC, Pune to Profit and Loss Account as WMDC has reject the claim of Octroi Duty.

(K) Sundry debtors in schedule includes Rs. 13.63 lacs due for a period of more than six months. Provision for debts considered as a doubtful aggregating to Rs.13.63 lacs has not been made as recovery efforts are under progress.

(L) Related Party Disclosures AS-18

i) Name of Related Party Smruthi Chemicals & Intermediates

Relationship Director in Company & Wife of Managing Director

Nature of the Transaction a) Job-work Charges (done by SC &I)

b) Job-work Charges (done by SOL)

c) Raw Mat. Purchase (High-seas/Local from SOL)

Transaction value (Rs.) a) Rs. 4981095

b)Rs. 0.00 c) Rs. 0.00

(N) Installed capacity is as certified by the management and accepted by auditors being, a technical matter.

(O) In the opinion of the Board, Current Assets, Loans and Advances including capital advances as on 31.03.2010 have a value on realization in the ordinary course of the business at least equal to the amount which they are stated.

(P) As regards the disclosure of particulars of amounts owned by the company to small scale industrial under-taking that are required to be disclosed in the Balance Sheet in pursuance of amendment to Schedule VI of the Companies Act 1956 vide Notification No. GSR-129 (E), dated 22.02.1999 issued by the Department of Company Affairs, the Company is in possession of information as to the business, industrial status of its creditors.

The name of Small Scale Industrial undertakings to whom the Company owes a sum exceeding Rs.1.00 Lac which is outstanding for not more than 30 days included in Sundry Creditors is Ramesh Chemical Industries 195748/-.

(Q)The figures of the previous year have been re-grouped and re-arranged wherever necessary.

Accumulated Losses :

IV) Performance of Company (Amount in Thousand)

Turnover : 1269782 Total Expenditures : 1197233

Profit before Tax : 72549 Profit after Tax : 55491

Earning Per share in Rs. 14.60 Dividend Rate : 20 %

V) Generic Names of Three Principal Products / Services of Company (As per monetary terms)

Item Code No. : 2942.00

Products Description:

1) Diloxanide Furoate 2) Norfloxacin 3) Zidovudine 4) Ciprofloxacin 5) Pefloxacin 6) Metformin Hcl 7) Amlodipine 8) Chlorhexidine Base 9) Carbidopa 10) Enrofloxacin 11) Phthaloyl Amlodipine

(S)The Company is primarily engaged in the segment of "Bulk Drugs and Drug Intermediates" and there is no reportable segments as per Accounting Standard (AS-17)

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Mar 31, 2000

1. GENERAL :

a) The figures of the previous year have been re-grouped whereever necessary.

b) In accordance with the Companys usual practice, the Excise Duty on finished goods lying in its factory premises/bonds as on 31 -3-2000 amounting to Rs. 6,73,992-00 has neither been provided for nor included in the valuation of such stocks. The same would be accounted upon clearance of the goods. This, however, has no effect on the profit for the year.

c) For closing the Term Loan account of SICOM before maturity period, the SICOM has charged additional interest of Rs. 4.00 lacs.

d) The Company paid stamp duty and registration charge for creating charge in favour of SBI against Term Loan sanctioned of Rs. 6,00200/-

2. Contingent Liabilities not provided for in respect for :

i) No provision has been made for Sales Tax Claim of Rs. 16,70,000/- for the year 1991-92, 1995-96 & 1996-97 (R ;. 3,80,000 + Rs. 4,75,000 + Rs. 8,15000) these matter are pending in appeal and recovering of these amount is stayed by Appellate Authority. The Company is assurance in reducing said Sales Tax liabilities.

ii) The Company drawn foreign L/C of Rs. 41172444/- towards import of raw materials to various parties.

iii) The bank guarantees issued of Rs. 4087012/- to various Government Authorities.

iv) The Company has not availed Modvat Credit of Rs. 79,000/- on purchases of various raw materials due to technical mistake in invoices, non entry in the Part-I. The said is in the appeal.

3. Export obligation in repect of pre-exporf DEPB Licence having value of Rs. 23,74,703-00 obtained and utilised by the company for import of Raw Material and unutilised amount is Rs, 8,77,222.00 as on 31.3.2000.

4. No provision is made for Income-Tax due to unabsorbed depreciation amount is available for set-off of the net profit.

5. Balances of Sundry Debtors, Sundry Creditors are subject to confirmations, reconciliations and adjustments, if any.

6. Remittance in Foreigh Exchange : Rs. 5,23,89,875/-

7. Expenses in Foreign Currency in : Rs. 4,48,000/- Travelling of Directors

8. Earning in Foreign exchange : Rs. 108,91,556/-

9. Sundry Debtors in Schedule includes Rs. 8.46 lacs due for a period more than six months.

10. Provision for debts considered as doubtful aggregating to Rs. 5.05 lacs has not been made as recovery efforts are under progress.

11. Installed capacity is as certified by the mangement and accepted by auditors, being a technical matters.

Installed capacity is arrived based on the combination of production of different products and also it varies the capacity depends on the re-combination of products.

Additional information as required unde Schedule VI Part II of the Companies Act, 1956 (as certified by Managing Director)

12) Current Assets, Loans & Advances as of 31-03-2000 have" a-value on realization in the ordinery course of the business at least equal to the amount which are stated above and provision for all known liabilities have been made.