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Notes to Accounts of Source Natural Foods & Herbal Supplements Ltd.

Mar 31, 2015

1 44,50,000 Equity Share are held by Sumeru Ayurveda Private Limited, the holding company as on 31st March, 2015 (Previous Year 35,50,000 Equity Shares)

2 Contingent Liabilities Rs. In Lakhs

As on 31.03.2015 As on 31.03.2014

a. Bank guarantee against where Nil Nil counter Guarantee have been given

b. Claims against the Company not Nil Nil acknowledged as debt

3 The Deputy Commissioner (C.T.) had vide his Assessment order No. 2467/199-2000 has confirmed the action of C.T.O. Gowliguda and had issued a revised order to collect additional sales tax of Rs. 6,81,265 for the year 1999-2000. The company has effected payment of Rs. 3,40,633 towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000 pursuant to the order from Additional Commissioner. The Company received an order dated November 07, 2013 from the Deputy Commissioner that Rs. 343,633/- needs to be paid by the Company towards the sales tax collected during the period 1999-2000. The Company is yet to receive sales tax recovery order from the department for the same.

4 ESI Department has issued a show cause notice for Rs, 5,51,907 on adhoc basis vide their letter No. AP/Ins. 1/52-5639-34/359 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance Court, Andhra Pradesh, Hyderabad on 12.03.2009 and obtained stay order. Company has filed a petition challenging the order passed under section 45-A of the ESI Act and the subsequent recovery order issued by the department.

5 Commissioner of Central Excise, Hyderabad - IV has appealed to CESTAT against Order No. 7/2006 dated 31.10.2006 of Commissioner (Appeals-II). The Appellate tribunal dismissed the case in favour of the Company vide order passed on 21/11/2013 against which the department has went for an appeal in the tribunal. The Company had filed memorandum of objections against the appeal made by the department. Amount involved in the case is Rs. 13,42,727/-

6 The Assessment Order No. 2944 under CST Act 1956 was served on the Company on July 02, 2013 pertaining to the FY 2009-10. The order mentioned that net turnover of Rs. 16,30,835/-was not covered by C Forms and tax at 12.5% is payable on the same which amounts to Rs. 196,769/- along with the tax on inter state sales. The Company had not received any prior communication before serving the Assessment Order and has filed an appeal before the Appeal Deputy Commissioner by making a deposit of 12.5% on August 01, 2013. Company has deposited Rs. 26719/- for the appeal. Final order from the department is awaited for.

Further Re Assessment order vide No.55926 under CST Act 1956 on dated 28/11/2013 pertaining to the FY 2009-10. The order mentioned only Balance tax payable is Rs.5133/-. The

Company has to file the letter at department for Adjustment against which is excess credit of Rs.21,586 /- available during the year.

7 The ongoing revenue/civil matter with PIL (Pochiraju Industries Limited) has not progressed for redressal of resolution. Hence the financial implications of the same are not ascertainable.

8 The Company had received order from Additional Commissioner of excise department for having availed cenvat credit without having any supporting documents during the month of October 2007 for an amount of Rs. 5,11,930/- even though the Company later submitted photocopies of all the invoices. The Company had filed a petition before Commissioner (Appeals) against the order of Additional Commissioner on April 30, 2013. The Commissioner (Appeals) passed an order in favour of the Company on September 20, 2013. The department later has appealed to the Central Excise Tribunal against the order passed by the Commissioner (Appeals). The Company has filed the memorandum of objections against the appeal with the tribunal.

9 The Company has received notice from Income Tax Department vide letter no. AAAC14536Q/1-101/07-08 proposing to disallow the deduction of work in progress for an amount of Rs. 30,62,512. The Company had filed appeal before the Commissioner of Income Tax Appeals-2 which was dismissed vide order dated April 13, 2015. The Company will be filing an appeal against the same with Income Tax Appellate Tribunal. If the said amount is eventually disallowed, the company's loss as per Income Tax will be reduced and there is no constitutionally liabilities . The company has prepared for file the appeal before IT return.

10. Segment Reporting as per Accounting Standard -17

Business Segment: The company is operating in a single segment ie. Ayurvedic Medicines and Health Supplements.

Geographical Segment: The company presently caters the needs of Indian public and the company is not operating in different economic environments and hence no information is provided under this standard.

11. Related Party Disclosure

Disclosure as required by the Accounting Standard 18 ofthe Institute of Chartered Accountants of India are given below:

Sumeru Ayurveda Private Limited Holding Company

Mr. Arvind Varchaswi N. Key Managerial Personnel

Mr. Narayanan Narasimhan Director

Ms. Rashmi P.G. Company Secretary, Key Managerial Personnel

Sumeru Travel Solutions LLP Limited Liability Partnership

Sumeru Aviation LLP Limited Liability Partnership

Divine Services Partnership Firm

Madhurya Partnership Firm

Arvind Exports Partnership Firm

Broadvision Services Private Limited Private Limited Company

Advance Vital Enzymes Private Limited Private Limited Company

Advance Enzyme Technologies Limited Public Limited Company

Broadvision Perspectives India Private Limited Private Limited Company

Amar Bio Organics (India) Private Limited Private Limited Company

12. Figures for the previous year have been re-grouped, re-classified and rearranged wherever necessary.

13. Since the Company is not aware of the SSI Status of its creditors, the amounts due to them have not been identified.

14. Paisa have been rounded off to the nearest rupee.


Mar 31, 2014

1.1 Contingent Liabilities Rs. In Lakhs

As on 31.03.2014 As on 31.03.2013

a. Bank guarantee against where Nil Nil counter Guarantee have been given

b. Claims against the Company not Nil Nil acknowledged as debt

1.2 The Deputy Commissioner (C.T.) had vide his Assessment order No. 2467/199-2000 has confirmed the action of C.T.O. Gowliguda and had issued a revised order to collect additional sales tax of Rs. 6,81,265 for the year 1999-2000. The company has effected payment of Rs. 3,40,633 towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000 pursuant to the order from Additional Commissioner. The Company received a order dated November 07, 2013 from the Deputy Commissioner that Rs. 343,633/- needs to be paid by the Company towards the sales tax collected during the period 1999-2000.

1.3 ESI Department has issued a show cause notice for Rs, 5,51,907 on adhoc basis vide their letter No. AP/Ins. I/52-5639-34/359 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance Court, Andhra Pradesh, Hyderabad on 12.03.2009 and obtained stay order. Company has now filed a petition challenging the order passed under section 45-A of the ESI Act and the subsequent recovery order issued by the department.

1.4 Commissioner of Central Excise, Hyderabad – IV has appealed to CESTAT against Order No. 7/2006 dated 31.10.2006 of Commissioner (Appeals-II). The Appellete tribunal dismissed the case in favour of the Company vide order passed on 21/11/2013 against which the department has went for an appeal in the tribunal. The Company has filed memorandum of objections against the appeal made by the department. Amount involved in the case is Rs. 13,42,727/- 22.5 We received a notice dated March 28, 2014 from the EPF department on April 2014 stating that there were certain belated payments being made by the Company for a period from 01/04/2000 to 31/12/2013 and the total amount of penalty and interest were charged to the Company for Rs. 1,25,557/-. Out of which Rs. 463 pertains to the belated payments made in the period from 2010-2012. The Company replied to the department that penalty amount upto March 2000 was already paid and we are waiting for the reply from the department.

1.5 ESI Department also raised a demand for Rs.8479 on actual basis vide their letter No. AP/Ins. I/52-5639-34/540 dated 27.11.2007 towards short payment of contributions for the period 04/01 to 08/01, 10& 11/01, 01/02 to 03/02, 04/02 to 05/02, 10/02 to 02/03.

1.6 PIL (Pochiraju Industries Limited) filed a petition on 23.01.2008 at III Additional Chief Judge, City Civil Court vide O.P.No.138/2008 for arbitration and for not to open locks of the factory. The Hon''ble judge after hearing dismissed the case.

PIL demanded Rs. 71.00 lakhs (Rs. 60.00 lakhs Security Deposit and Rs.11.00 lakhs towards commission for providing Technical Know how) vide their notice dated 25.03.2008.

The Company had to receive an amount of Rs. 53,67,803 for the year 2007-08 and 2008-09 from PIL. Hence Inwinex had adjusted the said amount from Rs. 60.00 lakhs of Security Deposit during 2009-10. Further during 2009-10 the company had adjusted an amount of Rs.3.00 lakhs towards Rent.

As the case is under Arbitration, if the Company is unable to adjust the said amounts against Security Deposit then the loss of the company will increase by Rs. 56,67,803.

The Court has dismissed the money suit case amounting to Rs. 11 lakhs since the other party did not submit the relevant documents.

1.7 The Company had received order from Additional Commissioner of excise department for having availed cenvat credit without having any supporting documents during the month of October 2007 for an amount of Rs. 5,11,930/- even though the Company later submitted photocopies of all the invoices. The Company had filed a petition before Commissioner (Appeals) against the order of Additional Commissioner on April 30, 2013. The Commissioner (Appeals) passed an order in favour of the Company on September 20, 2013. The department later has appealed to the Central Excise Tribunal against the order passed by the Commissioner (Appeals). The Company has filed the memorandum of objections against the appeal with the tribunal.

1.8 The Company has received notice from Income Tax Department vide letter no. AAAC14536Q/1-101/07-08 proposing to disallow the deduction of work in progress for an amount of Rs. 30,62,512. If the said amount is eventually disallowed, the company''s loss as per Income Tax will be reduced.

1.09 Deposits under Other Current Assets include amounts aggregating to Rs. 4,84,619 paid during the year towards arrear APGST for the years 1996-97, 1997-98 and 1998-99 against arrear notice dated 20.10.2009.

1.10 Deferred Revenue Expenditure:

During 2009-10 the company had incurred certain expenditure of non recurring nature like payment of underwriting commission, capital reduction scheme expenses, etc which were deferred for a period of five years commencing from 2009-10.

1.11 The Company has adopted AS 22 – Accounting for Taxes on Income. The accumulated net deferred tax asset on account of timing difference between book and tax loss has not been recognised due to virtual uncertainty that there will be future taxable income in near future available to realise such losses.

2. Segment Reporting as per Accounting Standard – 17

Business Segment: The company is operating in a single segment ie. Ayurvedic Medicines and Health Supplements.

Geographical Segment: The company presently caters the needs of Indian public and the company is not operating in different economic environments and hence no information is provided under this standard.

3. Figures for the previous year have been re-grouped, re-classified and rearranged wherever necessary.

4. Since the Company is not aware of the SSI Status of its creditors, the amounts due to them have not been identified.

5. Paisa have been rounded off to the nearest rupee.


Mar 31, 2013

1.1 The Deputy Commissioner (C.T.) had vide his Assessment order No. 2467/199-2000 has confirmed the action of C.T.O. Gowliguda and had issued a revised order to collect additional sales tax of Rs. 6,81,265 for the year 1999-2000. The company has effected payment of Rs. 3,40,633 towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000 pursuant to the order from Additional Commissioner. The Company later appealed to Sales Tax Appellate Tribunal wherein the tribunal has allowed appeal against the revision orders of the department vide STAT''s order dated 01-12-2010 vide TA No. 936/2001 and has directed the revisional authority to The Company received a notice from the Deputy Commissioner that Rs. 17,320 payable for which the Company replied that Tribunal Order needs to be considered and Rs. 342,633/- which is deposited before appeal needs to be refunded.

1.2 ESI Department has issued a show cause notice for Rs, 5,51,907 on adhoc basis vide their letter No. AP/Ins. I/52- 5639-34/359 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance Court, Andhra Pradesh, Hyderabad on 12.03.2009 and obtained stay order. Company has now filed a petition challenging the order passed under section 45-A of the ESI Act and the subsequent recovery order issued by the department.

1.3 ESI Department also raised a demand for Rs.8479 on actual basis vie their letter No. AP/Ins. I/52-5639-34/540 dated 27.11.2007 towards short payment of contributions for the period 04/01 to 08/01, 10& 11/01, 01/02 to 03/02, 04/02 to 05/02, 10/02 to 02/03.

1.4 PIL (Pochiraju Industries Limited) filed a petition on 23.01.2008 at III Additional Chief Judge, City Civil Court vide O.P.No.138/2008 for arbitration and for not to open locks of the factory. The Hon''ble judge after hearing dismissed the case.

PIL demanded Rs. 71.00 lakhs (Rs. 60.00 lakhs Security Deposit and Rs.11.00 lakhs towards commission for providing Technical Know how) vide their notice dated 25.03.2008.

Inwinex had to receive an amount of Rs. 53,67,803 for the year 2007-08 and 2008-09 from PIL. Hence Inwinex had adjusted the said amount from Rs. 60.00 lakhs of Security Deposit during 2009-10. Further during 2009-10 the company had adjusted an amount of Rs.3.00 lakhs towards Rent.

As the case is under Arbitration, if the Company is unable to adjust the said amounts against Security Deposit then the loss of the company will increase by Rs. 56,67,803.

The Court has dismissed the money suit case amounting to Rs. 11 lakhs since the other party did not submit the relevant documents.

1.5 The Company has received order from Additional Commissioner of excise department for having availed cenvat credit without having any supporting documents during the month of October 2007 for an amount of Rs. 5,11,930/- even though the Company later submitted photocopies of all the invoices. The Company has filed a petition before Commissioner (Appeals) against the order of Additional Commissioner on April 30, 2013.

1.6 The Company has received notice from Income Tax Department vide letter no. AAAC14536Q/1-101/07-08 proposing to disallow the deduction of work in progress for an amount of Rs. 30,62,512. If the said amount is eventually disallowed, the company''s loss as per Income Tax will be reduced.

1.7 Deposits under Other Current Assets include amounts aggregating to Rs. 4,84,619 paid during the year towards arrear APGST for the years 1996-97, 1997-98 and 1998-99 against arrear notice dated 20.10.2009.

1.8 Deferred Revenue Expenditure:

During 2009-10 the company had incurred certain expenditure of non recurring nature like payment of underwriting commission, capital reduction scheme expenses, etc which were deferred for a period of five years commencing from 2009-10.

1.9 The Company has adopted AS 22 – Accounting for Taxes on Income. The accumulated net deferred tax asset on account of timing difference between book and tax loss has not been recognised due to virtual uncertainty that there will be future taxable income in near future available to realise such losses.

2. Segment Reporting as per Accounting Standard – 17

Business Segment: The company is operating in a single segment ie. Ayurvedic Medicines and Health Supplements.

Geographical Segment: The company presently caters the needs of Indian public and the company is not operating in different economic environment and hence no information is provided under this standard.

3. Related Party Disclosure

Disclosure as required by the Accounting Standard 18 of the Institute of Chartered Accountants of India are given below:

Sumeru Ayurveda Private Ltd Holding Company

Mr. Arvind Varchaswi N. Key Managerial Personnel

Mr. Narayanan Narasimhan Relative of Key Managerial Personnel

Sumeru Travel Solutions LLP Limited Liability Partnership

Sumeru Aviation Private Ltd Associate Company

Divine Services Partnership Firm

Madhurya Partnership Firm

Arvind Exports Partnership Firm

Broadvision Services Private Ltd Associate Company

Advance Vital Enzhymes Limited Associate Company

Advance Enzyme Technologies Limited Associate Company

Broadvision Prospective India Private Limited Associate Company

Amar Bio Organics (India) Private Limited Associate Company

Sri Sri Ayurveda Trust Associate Entity

4. Figures for the previous year have been re-grouped, re-classified and rearranged wherever necessary.

5. Since the Company is not aware of the SSI Status of its creditors, the amounts due to them have not been iden

6. Paisa have been rounded off to the nearest rupee.


Mar 31, 2012

A) 28,50,000 Equity Shares are held bv Sumeru Ayurveda Private Limted, the holdinq company as on March 31, 2012 (Previous Year 28,50,000 Equity Shares)

1.1 Contingent Liabilities Rs. In Lakhs

As on 31.03.2012 As on 31.03.2011

a. Bank guarantee against where counter Nil Nil Guarantee have been given

b. Claims against the Company not Nil Nil acknowledged as debt

C. The Deputy Commissioner (C.T.) has vide his Assessment order No. 2467/199-2000 has confirmed the action of C.T.O. Gowliguda and has issued a revised order to collect additional sales tax of Rs. 6,81.265 for the year 1999-2000. The Additional Commissioner (C.T.) legal vide his order LI 1(1 )564/2004 dated 22.03.2004 passed on a order staying the collection as the disputed tax subject to the condition that the Company shall pay 50% before 30.03.2004 pending disposal of the main appeal before STAT. The company has effected payment of Rs. 3,40,633 towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000. Pending final disposal of the disputed liability, the same has been reflected under loans and advances.

1.2 ESI Department has issued a show cause notice for Rs, 5,51,907 on adhoc basis vide their letter No. AP/Ins. 1/52-5639-34/359 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance Court, Andhra Pradesh, Hyderabad on 1203.2009 and obtained stay order.

1.3 ESI Department also raised a demand for Rs.8479 on actual basis vie their letter No. AP/Ins. 1/52- 5639-34/540 dated 27.11.2007 towards short payment of contributions for the period 04/01 to 08/01, 10& 11/01, 01/02 to 03/02, 04/02 to 05/02, 10/02 to 02/03.

1.4 Commissioner of Central Excise, Hyderabad -IV has appealed to CESTAT against the Order No.7/2006 dated 31.10.2006 of Commissioner (Appeals-II) for stay and set aside the order of the Commissioner (Appeals -II). Amount involved in the Appeal is Rs. 13,42,727.

1.5 PIL (Pochiraju Industries Limited) filed a petition on 23.01.2008 at III Additional Chief Judge, City Civil Court vide O.P.No. 138/2008 for arbitration and for not to open locks of the factory. The Hon'ble judge after hearing dismissed the case.

PIL demanded Rs. 71.00 lakhs (Rs. 60.00 lakhs Security Deposit and Rs. 11.00 lakhs towards commission for providing Technical Know how) vide their notice dated 25.03.2008.

Inwinex had to receive an amount of Rs. 53,67,803 for the year 2007-08 and 2008-09 from PIL. Hence Inwinex had adjusted the said amount from Rs. 60.00 lakhs of Security Deposit during 2009-10. Further during 2009-10 the company had adjusted an amount of Rs.3.00 lakhs towards Rent.

As the case is under Arbitration, if the Company is unable to adjust the said amounts against Security Deposit then the loss of the company will increase by Rs. 56,67,803.

1.6 The Company has received a show cause notice from the excise department for having availed cenvat credit without having any supporting documents during the month of October 2007 for an amount of Rs. 5,11,930/-. However, the Company later submitted photocopies of all the invoices. Reply from the department has been awaited.

1.7 Deposits under Other Current Assets include amounts aggregating to Rs. 4,84,619 paid during the year 1 towards arrear APGST for the years 1996-97, 1997-98 and 1998-99 against arrear notice dated 20.10.2009.

1.8 Deferred Revenue Expenditure:

During 2009-10 the company had incurred certain expenditure of non recurring nature like payment of underwriting commission, capital reduction scheme expenses, etc which were deferred for a period of five years commencing from 2009-10.

1.9 The Company has adopted AS 22 - Accounting for Taxes on Income. The accumulated net deferred tax asset on account of timing difference between book and tax loss has not been recognised due to virtual uncertainty that there will be future taxable income in near future available to realise such losses.

2. Segment Reporting as per Accounting Standard - 17

Business Segment: The company is operating in a single segment ie. Ayurvedic Medicines and Health

Supplements.

Geographical Segment: The company presently caters the needs of Indian public and the company is not

operating in different economic environment and hence no information is provided under this standard.

3. Figures for the previous year have been re-grouped, re-classified and rearranged wherever necessary.

4. Since the Company is not aware of the SSI Status of its creditors, the amounts due to them have not been identified.

5. Paisa have been rounded off to the nearest rupee.


Mar 31, 2010

Rs in Lacs

1. Contingent Liabilities As on As on 31.03.10 31.03.09

a. Bank guarantee against where counter Guarantee Nil Nil has been given

b. Claim against the Company not acknowledge as debt Nil Nil

c. State subsidy subject to compliance of certain Nil 20.00 Conditions

d. The Deputy Commissioner (C.T.) has vide his Assessment order No. 2467/1999-2000 has confirmed the action of C.T.O. Gowliguda and has issued a revised order to collect additional sales tax of Rs.6,81,265/- for the year 1999-2000. The Additional Commissioner (C.T.) legal vide his order LIl(l)/564/2004 dated 22.03.2004 passed an a order staying the collection as the disputed tax subject to the condition that the company shall pay 50% before 30.03.2004 pending disposal of the main appeal before STAT. The company has effected payment of Rs.3,40,633/- towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000. Pending final disposal of the disputed liability, the same has been reflected under loans and advances.

2. ESI Department has issued a show cause notice for Rs.551,907 on adhoc basis vide their letter No.AP/Ins.I/52-5639-34/539 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance court, Andhra Pradesh, Hyderabad on 12.03.2009 & obtained stay order.

3. ESI Department also raised a demand for Rs.8479/- on actual basis vide their letter No.AP/Ins.I/52- 5639-34/540 dated 27.11.2007 towards short payment of contributions for the period 04/01 to 08/01, 10 & 11/01, 01/02 to 03/02, 04/02 to 05/02, 10/02 to 02/03.

4. Commissioner of Central Excise, Hyderabad - IV has appealed to CESTAT against the Order No.7/2006 dated 31.10.2006 of Commissioner (Appeals -II) for stay & set aside the order of the Commissioner (Appeals-II). Amount involved in the Appeal is Rs. 13,42,727/-.

5. PIL (Pochiraju Industries Limited) filed a petition on 23.01.2008 at III Additional Chief Judge, City Civil Court vide O.P.No. 138/2008 for arbitration and for not to open locks of the factory. The Honble judge after hearing dismissed the case.

PIL demanded Rs.71.00 Lacs (Rs.60.00 Lacs Security Deposit & Rs. 11.00 Lacs towards Commission for providing Technical Know how) vide their notice dated 25.03.2008.

Inwinex has to receive an amount of Rs.5367803/- for the year 2007-2008 & 2008-2009 from PIL. Hence, Inwinex has adjusted the said amount from Rs.60.00 Lacs of Security Deposit.

Further during the financial year, company has adjusted an amount of Rs.300,000/- towards Rent.

As the case is under Arbitration, if the Company is unable to adjust the said amount against Security Deposit then the loss of the company will increase by Rs.56,67,803/-.

6. Excise Duty of Rs. 13,952/- is charged to Profit & Loss Account.

7. Deferred Revenue Expenditure:

During the year company has incurred certain expenditure of non recurring nature like payment of underwriting commission, capital reduction scheme expenses, etc which were deferred to current and subsequent four years equally.

8. During the year, the company has adjusted state subsidy of Rs.20,00,000 against Plant and Machinery.

9. The Company has adopted AS 22 - Accounting for Taxes on Income. The accumulated net deferred tax assets amounts to Rs. 146.65 Lacs on account of timing differences between book and tax losses as on 1.4.2010.

The Company has not recognized the above deferred tax assets due to virtual uncertainty that there will be future taxable income available to realize such losses.

10. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3, 4C & 4D OF PART II OF THE SCHEDULE VI OF THE COMPANIES ACT,1956.

A. CLASS OF GOODS CAPACITY AND PRODUCTION :

Class of goods manufactured : Allopathic & Ayurvedic Formulations

I. Licensed Capacity : NOT APPLICABLE

II. Installed Capacity : As certified by management

11. Prior period adjustments is Rs.Nil

12. Balance of Sundry Creditors, Sundry debtors, Loans, advances and deposits are subject to confirmation from parties concerned and reconciliation thereof.

13. Segment reporting as per Accounting Standard - 17

Business Segment : The Company is operating in two segments i.e. Allopathic and Ayurvedic Formulations. The revenue generated by the Allopathic formulations is Nil. Hence, it is not required to disclose figures for both the segments separately.

Geographical Segment : The Company presently caters the needs of the Indian public and the company is not operating in different economic environment and hence no information is provided under this standard.

14. RELATED PARTY DISCLOUSERS

Disclosures as required by the Accounting Standard 18 of the Institute of Chartered Accountants of India are given below:

a) Ionic Healthcare Private Ltd. Associate Company

Jenirik Products Partnership firm

Sumeru Ayurveda Pvt. Ltd Associate Company

Arvind Varchaswi Director, Sumeru Ayurveda Pvt. Ltd.

Narasimhan. N Director, Sumeru Ayurveda Pvt. Ltd

Ashok Kumar Agarwal Brother of Sri Ramesh Chandra Agarwal

b) Key Management Personnel

Ramesh Chandra Agarwal Managing Director

Manmohan Agarwal Executive Director

15. Figures for the previous year have re-grouped, re-classified and rearranged wherever necessary.

16. Since the Company is not aware of the SSI status of its creditors, the amounts due to them have not been identified.

17. Paise have been rounded off to the nearest rupee.


Mar 31, 2009

Rs in Lacs

1. Contingent Liabilities As on As on 31.03.09 31.03.08

a. Bank guarantee against where counter Guarantee has been given Nil Nil

b. Claim against the Company not acknowledge as debt Nil Nil

c. State subsidy subject to compliance of certain Conditions 20.00 20.00

d. The Deputy Commissioner (C.T.) has vide his Assessment order No. 2467/1999-2000 has confirmed the action of C.T.O. Gowliguda and has issued a revised order to collect additional sales tax of Rs.6,81,265/- for the year 1999-2000. The Additional Commissioner (C.T.) legal vide his order L11(l)/564/2004 dated 22.03.2004 passed an a order staying the collection as the disputed tax subject to the condition that the company shall pay 50% before 30.03.2004 pending disposal of the main appeal before STAT. The company has effected payment of Rs.3,40,633/- towards 50% payment in respect of disputed sales tax liability for the Assessment year 1999-2000. Pending final disposal of the disputed liability, the same has been reflected under loans and advances.

2. ESI Department has issued a show cause notice for Rs.551,907 on adhoc basis vide their letter No.AP/Tns.I/52-5639-34/539 dated 26.11.2007 towards omission of contribution on different heads for the period 1999-2000 to 2001-2002. In contest to the Show Cause Notice, company has filed petition for stay vide No.436/09 in Employees Insurance court, Andhra Pradesh, Hyderabad on 12.03.2009 & obtained stay order.

3. ESI Department also raised a demand for Rs.8479/- on actual basis vide their letter No.AP/Ins.I/52-5639-34/540 dated 27.11.2007 towards short payment of contributions for the period 04/01 to 08/01, 10 & 11/01, 01/02 to 03/02, 04/02 to 05/02, 10/02 to 02/03.

4. Commissioner of Central Excise, Hyderabad - IV has appealed to CESTAT against the Order No.7/2006 dated 31.10.2006 of Commissioner (Appeals -II) for stay & set aside the order of the Commissioner (Appeals-II). Amount involved in the Appeal is Rs. 13,42,727/-.

5. Contingent liability of Rs.358,701/- on account of delay in delivery of consignment to TNMSC with TVS Southern Roadways was settled on payment of Rs.200,000/- and the suit filed by TVS is withdrawn.

6. No Excise Duty is charged to Profit & Loss Account as there is no Sales during the year.

7. The Company has adopted AS 22 - Accounting for Taxes on Income. The accumulated net deferred tax assets amounts to Rs.146.40 Lacs on account of timing differences between book and tax losses as on 1.4.2009.

The Company has not recognized the above deferred tax assets due to virtual uncertainty that there will be future taxable income available to realize such losses.

8. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3,4C & 4D OF PART II OF THE SCHEDULE VI OF THE COMPANIES ACT,1956.

A. CLASS OF GOODS CAPACITY AND PRODUCTION :

Class of goods manufactured : Allopathic & Ayurvedic Formulations

I. Licensed Capacity : NOT APPLICABLE

II. Installed Capacity : As certified by management

9. Prior period adjustments is Rs.Nil

10. Balance of Sundry Creditors, Sundry debtors, Loans, advances and deposits are subject to confirmation from parties concerned and reconciliation thereof.

11.Segment reporting as per Accounting Standard - 17

Business Segment : The Company is operating in two segments i.e. Allopathic and Ayurvedic Formulations. The revenue generated by the Ayurvedic formulations is less than 10%. Hence, it is not required to disclose figures for both the segments separately.

Geographical Segment : The Company presently caters the needs of the Indian public and the company is not operating in different economic environment and hence no information is provided under this standard.

12. RELATED PARTY DISCLOUSERS

Disclosures as required by the Accounting Standard 18 of the Institute of Chartered Accountants of India are given below:

a) Ionic Healthcare Private Ltd. Associate Company

Jenirik Products Partnership firm

Sumeru Ayurveda Pvt. Ltd Associate Company

Arvind Varchaswi Director, Sumeru Ayurveda Pvt. Ltd.

Narasimhan. N Director, Sumeru Ayurveda Pvt. Ltd

Ashok Kumar Agarwal Brother of Sri Ramesh Chandra Agarwal

Praveen Kumar Agarwal Son of Sri Ramesh Chandra Agarwal

b) Key Management Personnel

Ramesh Chandra Agarwal Managing Director

Manmohan Agarwal Executive Director



13. Figures for the previous year have re-grouped, re-classified and rearranged wherever necessary.

14. Since the Company is not aware of the SSI status of its creditors, the amount due to them have not been identified.

15. Paise have been rounded of to the nearest rupee.

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