Home  »  Company  »  Zenotech Laboratorie  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Zenotech Laboratories Ltd.

Mar 31, 2016

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certificates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential financial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c). As of 31 March 2016, the net worth of the Company continues to be negative. During the year, the Company’s reference to the Board for Industrial and Financial Reconstruction (BIFR) had already been registered as case no. 115/2015 under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985.

1. Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs. 3,000 thousands payable to Late B. K. Raizada, erstwhile co-Managing Director for the period from 19 March 2011 to 18 March 2013. This has conditionally approved by MCA on 27 February, 2012. Pending compliance with the conditional approval by the Company, no adjustment in this regard has been made in the accompanying financials.

b. The current Management had filed a case in the Court of the Hon’ble Chief Judge City Civil Court at Hyderabad for recovery of managerial remuneration aggregating to Rs. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

d. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e. Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

2. Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2016 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 -Accounting for taxes on income.

3 Employee Stock Option Scheme

Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs. 1.22 lakhs received towards this was grouped under " Share application money pending allotment" until last year. During the year this money has been refunded to the respective holders.

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

4. Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

5 Segment information

The Company is engaged in a business of manufacture and trading of pharmaceuticals products and is governed by a similar set of risks and returns. The operations of the Company substantially are confined to in India. Hence, in the view of the management the entity operates in only one business segment, ‘Pharmaceuticals’ and in one geographical segment, ‘In India’. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

6 Pursuant to the Companies Act 2013 ( the ‘Act’), being effective from 1st April 2014, the Company has reassessed useful life of its fixed assets which coincide with the useful life specified in Part ‘C’ of Schedule II of the Act. As a result of this change, the deprecation charge for the year ended 31st March 2015 is higher by Rs 5,094. In respect of those assets whose useful life is already exhausted as on 1 April 2014, deprecation of Rs 924 has been adjusted in Reserves and Surplus in accordance with the requirements of Schedule II of the Act.

7 During the current and previous years, the company has accrued certain amounts to Rs 144,626 towards expenses relating to fees for the USFDA for 2013 and 2014 and unfulfilled export obligation under the Export Promotion Capital Goods Scheme. The Company has accrued these amounts based on the best estimates of the potential obligation based on the information available with it currently.

8 Previous year figures have been reworked, regrouped, reclassified and rearranged wherever necessary to make them comparable with the current year figures.


Mar 31, 2015

1. a) Update on the events and circumstances relating to ongoing differences with Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company.

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited (a division of Sun Pharmaceutical Industries Limited effective from 24 March 2015 pursuant to a merger scheme) and Daiichi Sankyo Company Limited (herein after referred to as the "current promoters") there were disagreements on various accounts between the erstwhile promoters and the current promoters resulting in various legal cases being filed by both the parties before various forums. The current Management was denied and, therefore, could not gain access to the factory and other premises of the Company due to which a legal case was filed before the Company Law Board (CLB), Chennai, for taking over the physical possession of the factory premises from Dr. Jayaram Chigurupati, the erstwhile Promoter and Managing Director of the Company. Owing to the protracted legal case, the physical possession of the factory premises could be taken over on November 13, 2011 in the presence of CLB appointed Advocate Commissioner, in pursuance to an Order passed by the CLB. Subsequent to the gaining of the possession of the factory premises, further assessment by the current Management revealed that, among others, certain books and records, supplementary documents and statutory register till the period 12 November 2011 were missing and which are still not in the possession of the current Management. The Honorable Company Law Board vide order dated 8 October 2012 further directed Erstwhile Promoter and Managing Director of the Company to return all the documents and provide written details of all missing documents/assets/statutory records/equipment of the Company. The Honorable High Court of Andhra Pradesh has also passed a similar order. The Company has not yet been provided with these documents/information.

The current Management, therefore, based on the available limited records, statutory returns filed, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956, listing agreement and Foreign Exchange Management Act, etc post 12 November 2011, reconstructed financial statements for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several financial and non financial irregularities are sub-judice and various legal proceedings are ongoing, any further adjustments/disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments/disclosures are identifiable/ determinable.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile Managing Director on the queries raised regarding details pertaining to these subsidiaries and seeking documents/certificates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential financial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c) As of 31 March 2015, total net worth of the Company has been completely eroded. The Board of Directors has formed an opinion that the Company has become a Sick Industrial Company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and necessary reference shall be made to the Board for Industrial and Financial Reconstruction (BIFR) in due course of time.

2. Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs. 3,000 thousands payable to Late B. K. Raizada, erstwhile co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had filed a case in the Court of the Hon'ble Chief Judge City Civil Court at Hyderabad for recovery of managerial remuneration aggregating to Rs. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

a. During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the previous year, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferred to TDB which were pledged as security.

b. In addition to the legal claim as mentioned in note 2.26 (b) above, the Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and managing director with regard to loss of vehicles, missing records including intellectual property, unauthorized use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy Laboratories Limited (now a division of Sun Pharmaceutical Industries Limited) in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs. 113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder filed a petition in the Hon'ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon'ble High Court of Madras and subsequently it was quashed by the Hon'ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company fi led a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters' complaint. SAT directed DS to price the open offer at Rs 160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs 113.62 per share.

In June 2012, Erstwhile promoter has fi led a writ petition before Honorable Andhra Pradesh High Court against interlaid Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

d. In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The Company's Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company's results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

e. Other than those disclosed, the Company has not received any significant claims post 31 March 2011.

3. Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realization, the Company has not recorded the cumulative deferred tax asset as on 31 March 2015 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 – Accounting for taxes on income.

4. Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs. 1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

5. Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Offi ce Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after fi ling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2015 has been made in the fi nancial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

6. During the year, the Company has accrued certain amounts aggregating to Rs. 129,058 towards expenses relating to fees for US FDA for 2013 and 2014 and unfulfilled export obligation under the Export Promotion Capital Goods scheme. The Company has accrued these amounts based on the best estimates of the potential obligation based on the information available with it currently.

7. Pursuant to the Companies Act 2013 (the 'Act'), being effective from 1st April 2014, the Company has reassessed useful life of its fixed assets which coincide with the useful life specified in Part 'C' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended 31 March 2015 is higher by Rs. 5,094. In respect of those assets whose useful life is already exhausted as on 1 April 2014, depreciation of Rs. 924 has been adjusted in Reserve and Surplus in accordance with the requirements of Schedule II of the Act.

8. Segment information

The Company is engaged in a business of manufacture and trading of Pharmaceutical products and is governed by a similar set of risks and returns. The operations of the Company substantially are confi ned to in India. Hence, in the view of the management the entity operates in only one business segment, 'Pharmaceutical' and in one geographical segment, 'In India'. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

9. The Company has reclassifi ed the previous year fi gures to confi rm to current year's classifi cation.


Mar 31, 2014

1.1 Managerial Remuneration

a. The Company had filed an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs.3,000 thousands payable to Mr. B. K. Raizada, co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had filed a case in the Court of the Hon''ble Chief Judge City Civil Court at Hyderabad to for recovery of managerial remuneration aggregating to Rs.7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

1.2 Contingent liabilities and commitments

As at As at 31 March 2014 31 March 2013

Contingent liabilities

i) Claims against the company not acknowledged as debt 12,064 12,064

ii) Bank guarantees 8,135 11,688

iii) Other matters* *Legal cases filed by/against the Company

a. During the year ended 31 March 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement.The Arbitrator has issued an order with direction to the Company and erstwhile Co-Managing Director to pay individually or jointly the outstanding dues to TDB. During the year, 600,000 equity shares of the Company held by erstwhile Co-Managing Director was transferrd to TDB which were pledged as security.

b. In addition to the legal claim as mentioned in note 2.26 (b) above, the Company has filed certain legal cases before the appropriate forum against the erstwhile promoter and managing director with regard to loss of vehicles, missing records inlcuding intellectual property, unauthorised use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs.113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder filed a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition filed by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters'' complaint. SAT directed DS to price the open offer at Rs.160 per share. DS has filed an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs.113.62 per share.

In June 2012, Erstwhile promoter has filed a writ petition before Honorable Andhra Pradesh High Court against ineralia Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

1.3 Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense under cancellable operating leases was Rs.Nil (previous year: Rs.217) which has been disclosed as ''Rent'' in the statement of profit and loss.

1.4 Deferred Taxation:

The Company has significant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2014 and for the year arising on account of timing differences, as stipulated in Accounting Standard (AS) 22 – Accounting for taxes on income.

1.5 Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs.1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

Provision for indirect taxes are in respect of which the claims are pending before various tax authorities for a considerable period of time and based on management''s estimate of claims provision is made on prudent basis that possible outflow of resources may arise in future.

1.6 Employee benefit plans

The Company has a defined benefit gratuity plan which is presently unfunded. The components of net gratuity expense recognised in the statement of profit and loss and amounts recognised in the balance sheet for the gratuity plans is as provided below.

Discount rate: The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

1.7 Related party transactions

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

a) Name of the Related Party* Relationship

Ranbaxy Laboratories Limited Entity holding more than 20%

Daiichi Sankyo Company Limited Entity holding 20%

Zenotech Farmaceutica Do Brasil Limiteda, Brazil Subsidiary Zenotech Laboratories Nigeria Limited, Nigeria Subsidiary

Zenotech, Inc., USA Subsidiary

Dr. Jayaram Chigurupati – Co-Managing Director*** Erstwhile Promoter and Key Management Personnel** Mr. Bimal K Raizada – Co-Managing Director Key Management Personnel

* The Company did not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from one of its directors namely Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 for the previous year ended 31 March 2013. Parties identified and disclosed related to these is based on earlier years audited financial statements.

** Consequence to completion of open offer formalities by Daiichi Sankyo Company Limited in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters.

*** Ceased to be as Managing Directors w.e.f 1 October 2012 on completion of the five year term as per reappointment approved in the Annual General Meeting dated 8 November 2007 and ceased to be as Director of the Company w.e.f. 28 December 2012.

1.8 Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2014 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

1.9 Segment information

The Company is engaged in a business of manufacture and trading of pharmaceuticals products and is governed by a similar set of risks and returns. The operations of the Company substantially are confined to in India. Hence, in the view of the management the entity operates in only one business segment, ''Pharmaceuticals'' and in one geographical segment, ''In India''. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

1.10 The Company has reclassified the previous year figures to confirm to current year''s classification.


Mar 31, 2013

1.1 a) Update on the events and circumstances relating to ongoing differences with the erstwhile co- Managing directors

Post acquisition of stake in the Company by Ranbaxy Laboratories Limited and Daiichi Sankyo Company Limited (herein after referred to as the "Current promoters") there were disagreements on various accounts between the erstwhile promoters and the current promoters resulting in various petitions/cases being fi led by both the parties at various forums. The petition resulted in a protracted legal case with the Company Law Board (CLB) for taking physical possession of the factory premises on 13 November 2011.

As a result, certain books and records, supplementary documents and statutory register till the period 12 November 2011 are still not in the possession of the current Management. The Honorable Company Law Board vide its order dated 8 October 2012 also directed Erstwhile Promoter to return all the documents and provide written details of all missing documents/ assets/ statutory records / equipment of the Company. The Honorable High Court of Andhra Pradesh has also passed similar order.

The current Management therefore had based on the available limited records, statutory return fi led, supplementary documents, invoices, external corroborative evidence and after considering the various non compliances under the Companies Act, 1956 and listing agreement etc reconstructed fi nancial statement for the years ended 31 March 2011 and 2012. Management is also in the process of regularizing and compounding such non compliances with the various authorities concerned.

Since matters relating to several fi nancial and non fi nancial irregularities are sub-judice and various legal proceedings are ongoing, any further adjustments / disclosures to the fi nancial statements, if required, would be made in the fi nancial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identifi able/ determinable.

b) Investment in subsidiaries:

Upon obtaining control of the Company, the current Management observed that no books of account and records were available regarding its overseas subsidiaries. The current management is yet to receive any response from the erstwhile co-managing director on the queries raised regarding details pertaining to these subsidiaries and seeking documents / certifi cates related to forex transactions with these subsidiaries including certain loans and investment made in the same. Provision has not been made for potential fi nancial consequences arising out of such ongoing evaluations, the outcome of which will depend on the nature and extent of non compliances which is currently not determinable.

c) The Company has fi led required declaration under the Sick Industrial Companies (Special Provisions) Act, 1985 with the Board of Industrial and Financial Reconstruction (BIFR) for potential sickness as the net worth of the Company has been eroded by more than fi fty percent. The Management is in the process of taking all required steps to revive the Company and to increase the net worth including other steps as may be suggested by the BIFR from time to time.

1.2 Managerial Remuneration

a. The Company had fi led an application under the Companies Act, 1956 to the Ministry of Corporate Affairs (MCA), Government of India for approval of managerial remuneration of Rs.. 3,000 thousands payable to Mr. B. K. Raizada, co-Managing Director for the period from 19 March 2011 to 18 March 2013. This application pending approval.

b. The current Management had fi led a case in the Court of the Hon''ble Chief Judge City Civil Court at Hyderabad to for recovery of managerial remuneration aggregating to Rs.. 7,980 thousands (excluding interests) paid to erstwhile Co-Managing Director during the period from October 1, 2007 to March 31, 2011, in contravention of the provisions of the Companies Act, 1956.

* Legal cases fi led by/against the Company

a. During the year ended 31 March 2011, Technology Development Board (TDB) had fi led a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. TDB had issued a notice dated 3 April 2012 to erstwhile Co-Managing Director to settle the dues payable by the Company within 15 days failing which, TDB was to sell 600,000 equity shares of the Company held pledged as security by him. The said notice was stayed by Hon''ble Andhra Pradesh High Court until further orders, in view of his fi ling of Writ Petition. The Arbitrator has issued an order with direction to the Company and erstwhile Co Managing director to pay individually or jointly the outstanding dues to TDB.

b. In addition to the legal claim as mentioned in note 2.27 (b) above, the Company has fi led certain legal cases before the appropriate forum against the erstwhile promoter / erstwhile Co Managing Director with regard to loss of vehicles, missing records inlcuding intellectual property, unauthorised use of the name of the Company and certain missing mammalian clones.

c. Subsequent to Daiichi Sankyo Company Limited (DS) acquiring 63.92% stake in Ranbaxy in October 2008, DS announced an open offer to acquire 20% share of the Company at Rs.. 113.62 per share. Aggrieved by the pricing of the share, Promoters and one or two other shareholder fi led a petition in the Hon''ble High Court of Madras. The Company has been named as Respondent in the said case. An interim injunction in connection with the offer was given by the Hon''ble High Court of Madras and subsequently it was quashed by the Hon''ble Supreme Court based on a petition fi led by DS against the said injunction. Meanwhile some of the shareholders (excluding Ranbaxy) including promoter of the Company fi led a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company against the order of the SEBI turning down Erstwhile Promoters'' complaint. SAT directed DS to price the open offer at Rs. 160 per share. DS has fi led an appeal against the SAT order in the Supreme Court. The Supreme Court vide its order dated July 8, 2010 has ruled in favor of DS and allowed the open offer to be made at the price of Rs. 113.62 per share.

In June 2012, Erstwhile promoter has fi led a writ petition before Honorable Andhra Pradesh High Court against ineralia Foreign Investment Promotion Board and Daiichi Sankyo Limited challenging acquisition of 20% shares of the Company by DS through an open offer.

1.3 Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense under cancellable operating leases was Rs..217 (previous year: Rs.. 1,145) which has been disclosed as ‘Rent'' in the statement of profi t and loss.

1.4 Deferred Taxation:

The Company has signifi cant amount of outstanding business loss and unabsorbed depreciation. In the absence of virtual certainty of realisation, the Company has not recorded the cumulative deferred tax asset as on 31 March 2013 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 – Accounting for taxes on income.

1.5 Employee Stock Option Scheme

a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10, issued 2,500 shares and balance is pending for allotment. Accordingly Rs.. 1.22 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

1.6 Employee benefi t plans

The Company has a defi ned benefi t gratuity plan which is presently unfunded. The components of net gratuity expense recognised in the statement of profi t and loss and amounts recognised in the balance sheet for the gratuity plans is as provided below.

1.7 Related party transactions

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notifi ed by the Companies (Accounting Standards) Rules, 2006.

* The Company does not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from one of its directors namely Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 for the year ended 31 March 2013 and for the year ended 31 March 2012. Parties identifi ed and disclosed related to these is based on earlier years audited fi nancial statements.

** Consequence to completion of open offer formalities by Daiichi Sankyo Company Limited in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters.

*** Ceased to be as Managing Directors w.e.f 1 October 2012 on completion of the fi ve year term as per reappointment approved in the Annual General Meeting dated 8 November 2007 and ceased to be as Director of the Company w.e.f. 28 December 2012.

1.8 Micro and Small Enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Offi ce Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after fi ling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2013 has been made in the fi nancial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

1.9 Segment information

The Company''s business activity falls within a single primary business segment viz. ‘Pharmaceuticals'' and in India only. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

1.10 The Company has reclassifi ed the previous year fi gures to confi rm to current year''s classifi cation.


Mar 31, 2011

1. Fixed assets impaired

2. Capital work in progress impaired

3. Corporate costs incurred

4. Investments written down

5. Doubtful loans and advances provided for

6. Doubtful debtors provided for and

7. Provisions for demands towards disputed matters

The current management based on the steps taken by it, disclosures made, and supporting documents, evidence available from subsequent events believes that in its assessment the risk that the financial statements are materially misstated is not significant. These financial statements has been considered and approved by the Board of Directors in their meeting conducted in Hyderabad, India on May 19, 2012.

c. Legal cases filed by the Company on account of the ongoing dispute with the co-managing director

i. The current Management has filed a case with the Hon'ble Metropolitan Magistrate with regard to the loss of vehicles / technical data / missing records etc., against certain employees of the Company including Co- Managing Director under applicable provisions of the Indian Penal Code for which the complaints have been registered with the concerned police authorities and the investigation is under process.

ii. The current Management has filed a case against Co-Managing Director in the Court of the Hon'ble Chief Judge City Civil Court at Hyderabad for receipt of managerial remuneration aggregating to Rs. 7,980 thousands during the period from October 1, 2007 to March 31, 2011 from the Company, in contravention of the provisions of the Companies Act.

iii. The current management has filed a suit against Co- Managing Director for passing off and illegal use of the name 'Zenotech' in his personally owned entity 'Zenotech LLC', a US incorporated LLC.

iv. The Company received a letter dated January 9, 2012 from Bombay Stock Exchange (BSE) stating, inter- alia, that the Company had defaulted in compliance with various clauses of listing agreement and requiring the Company to show cause as to why appropriate action including suspension of trading of securities of the Company should not be taken against it. The Company informed to BSE about reason of non compliance and corrective measures taken by it. However, BSE, vide its public notice dated March 27, 2012 proposed to suspend the trading of the Company's scrips effective from April 20, 2012, unless all the compliances under listing agreement were made good subject to the satisfaction of BSE. The Company filed a writ petition before Hon'ble Andhra Pradesh High Court wherein the Hon'ble Court suspended the operation of the above public notice, in so far it relates to the suspension of the trading of the shares of the Company. As a result the trading of the Company's scrip was restored from April 23, 2012 on the BSE.

Note: Having regards to the fact that Gratuity is a defined benefit accrued based on actuarial valuation the amount applicable to an individual employee is not ascertainable and accordingly, has not been considered in the above computation.

8. Contingent liabilities:

Particulars As at As at March 31, 2011 March 31, 2010

i. Liability in respect of Bank guarantees 11,688 11,888

ii. Legal cases filed against Company by Technology Development Board

During the year ended March 31, 2011, Technology Development Board (TDB) had filed a claim petition under Arbitration and Conciliation Act, 1996 for recovery of dues payable by the Company as per loan agreement. The matter had been heard and the Arbitrator has reserved the Award. In the mean time, TDB has issued a notice dated April 3, 2012 to Co Managing Director to settle the dues payable by the Company within 15 days failing which, TDB will sell 600,000 equity shares of the Company held pledged as security by him. The said notice was stayed by Hon'ble Andhra Pradesh High Court until further orders, in view of his filing of Writ Petition and the matter is expected to be heard in June 2012.

iii. Arbitration matter against Ranbaxy Pharmaceuticals Inc.

During the year ended March 31, 2011, the Company initiated arbitration matter against Ranbaxy Pharmaceuticals Inc., USA under development and supply contract of certain Injectible products. The arbitration matter was dismissed vide interim order dated November 14, 2011 by arbitrator and the Company was ordered to pay administrative fees, costs and expenses including the fees and expenses of legal counsel incurred etc. vide final adjudication on March 20, 2012. The Company is awaiting for the final claim. Currently, the Company is not able to quantify amount of claim. Further, the management will initiate proceeding to recover the said amount as and when same is determined, from Co-Managing Director of the Company. Accordingly no provision has been made in the books of account.

09. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31, 2011 is Rs. Nil (March 31, 2010: Rs. Nil).

10. Capital work-in-progress includes capital advances of Rs. Nil (March 31, 2010 Rs. Nil)

11. Amounts payable to Micro, Small and Medium enterprises:

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2011 has been made in the financial statements based on information received and available with the Company. Further as per the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

12. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India. Hence, in the view of the management the entity operates in only one business segment, 'Pharmaceutical manufacturing and trading' and in one geographical segment, 'In India'. Consequently, no information under the requirements of the Accounting Standard 17 on segment reporting has been provided.

13. Deferred taxation:

In view of the brought forwards losses and no taxable income for the current year, the company has not recorded the cumulative deferred tax liability/asset as on March 31, 2011 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 - Accounting for taxes on income.

* The Company does not have a complete list of related parties due to absence of non receipt of form 24AA "Notice by the Interested Directors" from two of its directors namely Mr. A Raghu Vasu and Dr. Jayaram Chigurupati under Section 299 of the Companies Act, 1956 during the year. Parties identified and disclosed related to these is based on previous year audited financial statements.

** Consequence to completion of open offer formalities by Daiichi in September 2010, Dr. Jayaram Chigurupati and Associates ceased to be promoters, however, Dr. Jayaram Chigurupati continues to be Co-Managing Director of the Company.

14. Employee stock option scheme:

a) Under the Zenotech Employee Stock Option Scheme 2005, the Company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year 2009-10. Of these, the Company allotted 2,500 shares and balance is pending for allotment. Accordingly Rs. 122 thousands received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the fair value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share-based Payment issued by the Institute of Chartered Accountants of India.

* Department of Industrial Policy and Promotion, Ministry of Commerce and Industry vide its Notification S.O.1386 (E) dated September 23, 2005 has omitted Drugs and Pharmaceuticals from the Scheduled List. Licensed capacity as given above is based on Licenses/Letter of Intent obtained earlier.

15. Previous year Figures of the previous year have been regrouped / recast wherever necessary to compare with current year's classification. The figures of previous year were audited by a firm of Chartered accountants other than B S R & Associates. Current year financial statements are prepared under old Schedule VI as Revised Schedule VI is applicable for financial year commencing on or after April 1, 2011.


Mar 31, 2010

1. Contingent liabilities Rs. in lakhs

As at As at March 31, 2010 March 31,2009

Liability in respect of Bank guarantees 118.88 116.96

Liability in respect of Letter of credits - 48.33

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31, 2010 is Rs. Nil (March 31, 2009: Rs. 20.56 lakhs).

3. Capital work-in-progress includes capital advances of Rs. Nil (March 31, 2009 Rs.24.44 lakhs)

4. Sundry Creditors:

The Company has not received any confirmation from "suppliers" regarding their status under the Micro and Small Enterprises Development Act 2006 and hence disclosures, if any, relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

5. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India, which in the context of Accounting Standard (AS) 17 - "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006 is considered the only business segment.

6. Taxation:

In view of the brought forwards losses and no taxable income for the current year, the company has not recorded the cumulative deferred tax liability/asset as on March 31, 2009 and for the year arising on account of timing differences, as stipulated in Accounting Standard(AS) 22 - Accounting for taxes on income.

7. Related Party Disclosures:

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL) "I

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) > Subsidiary

Zenotech, Inc., USA J

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Entity holding more than 20%

Hemarus Therapeutics Limited (HTHL)

(Formerly known as Credence Clinical Promoter Group companies

Research Private Limited) where common control exists

Rite Diagnostics Private Limited (RDPL) and with which the company

Hemarus Technologies Limited (HTL) had transactions

Credence Power Projects Limited (CPPL)

Credence Infrastructure Limited (CIL)

Hemarus Biologicals Limited (HBL)

Dr. Jayaram Chigurupati, Promoter and Key

Managing Director Management Personnel

8. The Company has investments of Rs. 105.60 lakhs (31.03.2009 - Rs. 105.60 lakhs) in Zenotech Inc., USA (Subsidiary) and has advance (including towards share capital Rs.110.55) aggregating to Rs.366.04 lakhs (31.03.2009 - Rs.398.93 lakhs) to Zenotech Inc., USA. The networth of the subsidiary based on management accounts as at March 31, 2009 has been completely eroded. However having regard to the long term involvement of the Company, management is of the view that no provision is required on this account at this stage.

9. The company has a investment of Rs.0.24 lakhs (31.03.2009 - Rs.0.24 lakhs) in Credence Organics Private Limited (Associate Company) and has given loan of Rs.14.71 lakhs (31.03.2009 - Rs.14.71 lakhs) to the aforesaid entity which is outstanding from earlier years. The networth of the associate based on management accounts as at March 31, 2010 has been completely eroded. However having regard to the long term involvement of the Company, management is of the view that no provision is required on this account at this stage.

10. Capital work in progress shown under fixed assets includes Rs1040.03 lakhs (31.03.2009 - Rs.1041.65 lakhs) in respect of export oriented unit. The said unit has not yet been commissioned.

11. a) Under the Zenotech Employee Stock Option Scheme 2005, the company granted 17,000 options (net of options lapsed) of which 4,250 vested options have been exercised during year, and is pending allotment. Accordingly Rs. 2.96 lakhs received on exercise of options has been shown under "Share Application Money pending allotment".

b) The Company uses the intrinsic value method for accounting employee share based payments.

c) The company has not disclosed the impact on the net results and earnings per share (both basic and diluted) for the year using the fair value method as required in terms of the Guidance Note on Accounting for Employee Share- based Payment issued by the Institute of Chartered Accountants of India.

12. The Company has carried forward as at March 31, 2010 product development expenditure amounting to Rs. 152.32 lakhs to be written off in future years, notwithstanding the insignificant operations during the year and continuing operating losses and low utilization of plant, having regard to the Companys expectation of improving its future level of production and sales.

13. Figures of the previous year have been regrouped / recast wherever necessary to compare with current years classification.


Mar 31, 2009

1(a) The Company had applied vide its letter dated 4.09.2008 to the Registrar of Companies requested for an extension of time upto 31.12.2008 for the purpose of holding Annual General Meeting (AGM), on the ground that the accounts of one of the subsidiaries could not be completed as there was a major software problem, which was duly granted by Registrar of Companies Andhra Pradesh vide its order dated 9.09.2008. On lapse of the extension, the Company vide its letter dated 26.11.2008 to the Honorable Secretary, The Ministry of Corporate Affairs, New Delhi requested for extension of the financial year 2007-08 up to 31.12.2008, i.e. (for a period of 21 months) and also to pass such consequential orders for postponing the submission of accounts to Annual General Meeting or submission of accounts, annual returns etc,. As on date no approval has been received by the Company. Consequent to the AGM not being held by the Company the accounts for the year ended 31st March, 2008 has not been adopted by the members.

(b) Subsequent to Daiichy Sankyo Company Limited (Daiichi) acquiring 63.92% stake in Ranbaxy Laboratories Limited (Ranbaxy) in October 2008, Daiichi announced an open offer to acquire 20% shares of Zenotech Laboratories Limited (the Company) at Rs. 113.62 per share. Aggrieved by the pricing of the share, one of the shareholders filed a petition in the Honble High Court of Madras. The Company has been named as Respondent in the said case. An interim injuction in connection with the offer was given by the Honble High Court of Madras and subsequently it was quashed by the Honble Supreme Court based on a petiion filed by Daiichi against the said injuction. Meanwhile some the shareholders (excluding Ranbaxy) including Promoter and Managing Director of the Company filed a petition with Securities Appellate Tribunal (SAT) with respect to the pricing of the share of the Company. SAT directed Daiichi to price the open offer at Rs. 160 per share. Daiichi has filed an appeal against the SAT order in the Supreme Court.

2. Contingent liabilities (Amount in Rs. Lakhs)

As at As at March 31, 2009 March 31,2008

Liability in respect of Bank guarantees 116.96 90.63

Liability in respect of Letter of credits 48.33 257.20

3. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for, as at March 31st, 2009 is Rs. 20.56 lakhs (31.03.2008: Rs. 155.23 lakhs).

4. Secured loans:

i. Term loans taken by the Company from Andhra Pradesh State Financial Corporation (APSFC) are secured by way of hypothecation of plant and machinery and mortgage of land related to Biologies facility and R&D facility and personal guarantee of the Director of the Company.

ii. Term loan taken from the Technology Development Board (TDB) is secured by way of paripassu first charge on the whole of movable properties of the company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future and paripassu first charge on land or other immovable property of the company, present and future, and personal guarantee of the Director of the Company.

iii. Cash Credit/working capital loan from YES Bank is secured by first Pari Passu charge on current assets of the Company.

iv. Vehicle loans taken by the Company from Vijaya Bank and HDFC Bank Limited are secured by way of hypothecation of respective vehicles.

v. In respect of loans repaid to Axis Bank, the Company is in the process of filing satisfaction of charges.

5. Capital work-in-progress includes capital advances of Rs.24.44 lakhs (31.03.2008: Rs.296.88 lakhs)

6. Sundry Creditors:

The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosures, if any, relating to amount unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

7. Segment reporting:

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals in India, which in the context of Accounting Standard (AS) 17 - "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006 is considered the only business segment.

8. Taxation:

Deferred Tax is accounted for by computing the tax effect of timing difference which arises during the year and reverse in subsequent periods. Deferred tax assets are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9. Related Party Disclosures:

Information relating to Related Party transactions as per "Accounting Standard (AS) 18" notified by the Companies (Accounting Standards) Rules, 2006.

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL) ]

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) [ Subsidiary

Zenotech, Inc., USA

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Major Shareholder

Credence Clinical Research Private Limited (CCRPL) Promoter Group companies

Rite Diagnostics Private Limited (RDPL) where common control exists

Hemarus Technologies Limited (HTL) > and with whom the company

Credence Power Projects Limited (CPPL) had transactions

Credence Infrastructure Limited (CIL) J Hemarus Biologicals Limited (HBL)

Dr. Jayaram Chigurupati, Promoter and Key

Managing Director Management Personnel


Mar 31, 2008

1. Contingent liabilities (Amount in Rs. Lakhs)

As at As at March 31, 2008 March 31,2007

In respect of matters under dispute:

- Customs Duty - 14.99

2. Estimated amount of contracts remaining to be executed on capital account not provided for, as at March 31, 2008 is Rs. 452.11 lakhs (Previous year: Rs. 245.16 lakhs).

3. Secured loans

i. Term loans taken by the Company from Andhra Pradesh State Financial Corporation (APSFC) are secured by way of hypothecation of plant and machinery and mortgage of land related to Biologies facility and R&D facility and personal guarantee of the Director of the Company.

ii. Term loan taken from the Technology Development Board (TDB) is secured by way of paripassu first charge on the whole of movable properties of the company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future and paripassu first charge on land or other immovable property of the company, present and future, and personal guarantee of the Director of the Company.

iii. Cash Credit/working capital loan from Axis Bank Limited is secured by way of hypothecation on first charge basis of all the current assets of the Company, present and future, and hypothecation on second charge basis of all movable plant and machinery, furniture and fixtures, present and future and personal guarantee of the Director.

iv. Cash Credit/ working capital taken from Andhra Bank are secured by way of first charge on the current assets ranking paripassu with Axis Bank and second charge on the fixed assets, present and future ranking paripassu with APSFC, TDB and Axis Bank Limited and personal guarantee of the Director of the Company.

v. Cash Credit/working capital loan from YES Bank is secured by first Pari Passu charge on current assets of the Company.

vi. Vehicle loans taken by the Company from ICICI Bank Limited and HDFC Bank Limited are secured by way of hypothecation of respective vehicles.

vii. In respect of loans repaid, the Company is in the process of filing satisfaction of charges.

4. Sundry Creditors

Sundry creditors (Schedule 8 - current liabilities) includes Rs. Nil due to Micro enterprises and small enterprises as defined under Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006). The Company has not received any memorandum (as required to be filed by the suppler with the notified authority under the MSMED Act, 2006) claiming their status as Micro or Small or Medium Enterprises.

5. Segment reporting

The Company has considered business segment as the primary segment for disclosure. The Company is engaged in the manufacture and trading of Pharmaceuticals, which in the context of Accounting Standard 17, issued by the Institute of Chartered Accountants of India, is considered the only business segment.

6. Taxation

i) There is no tax liability for the current financial year.

ii) Deferred Tax:

In the previous year the Company, in accordance with Accounting Standard (AS-22) on "Accounting for Taxes on Income", has taken credit of Rs. 290.14 lakhs in the profit and loss account recognising deferred tax asset in respect of carried forward business losses including unabsorbed depreciation after adjusting deferred tax liability on account of timing difference in depreciation.

The Company during the current financial year, has reviewed and reassessed the total deferred tax asset/ liability and in view of substantial brought forwarded unabsorbed depreciation and accumulated losses as on March 31, 2007 and no taxable income for the current year, the net deferred tax asset of Rs. 229.06 lakhs as given below has been reversed:

7. Related Party Disclosures

Information relating to Related Party transactions as per "Accounting Standard 18" issued by the Institute of Chartered Accountants of India

(A) Name of the Related Party Relationship

Zenotech Farmaceutica Do Brasil Limiteda, Brazil (ZFDBL)

Zenotech Laboratories Nigeria Limited, Nigeria (ZLNL) Subsidiary

Zenotech, Inc., USA

Credence Organics Private Limited (COPL) Associate

Ranbaxy Laboratories Limited (RLL) Major Shareholder

Credence Clinical Research Private Limited (CCRPL)

Rite Diagnostics Private Limited (RDPL) Promoter Group companies where

Hemarus Technologies Limited (HTL) > common control exists and with

Credence Power Projects Limited (CPPL) whom the company had transactions

Credence Infrastructure Limited (CIL)

Dr. Jayaram Chigurupati, Managing Director Promoter and Key Management Personnel

Ms. Padmasree Chigurupati Promoter and relative of Key Management Personnel

8. Accounting Standard 15 (Revised) - Employee Benefits (AS-15) has become applicable to the Company form the current year and consequently, it revised the provision for retirement and other benefits as at March 31, 2007. An additional liability of Rs. 4.50 lakhs arising out of such revision has been adjusted to the opening balance in the profit and loss account as at April 1, 2007 in accordance with the transitional provisions of AS-15. The employee benefits are as under:

i. Provident Fund: Eligible employees of the Company receive benefits under the Provident Fund which are defined contribution plans wherein both the employees and the Company make monthly contributions equal to a specified percentage of the covered employee salary. The contributions are made to the Regional Provident Fund Commissioner and are charged to the Profit and Loss Account in the period they are incurred.

ii. Gratuity: In accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity, a defined benefit plan (the Gratuity Plan) covering eligible employees. Liabilities with regard to such gratuity plan are determined by actuarial valuation and are charged to Profit and Loss Account in the period determined.

iii. Provision for Unutilised Leave: The accrual for unutilized leave is determined for the entire available leave balance standing to the credit of the employees at period end. The value of such leave balance eligible for carry forward is determined by actuarial valuation and is charged to Profit and Loss Account in the period determined.

9. a) There are no outstanding forward exchange contracts as at the year end.

10. During the year the Company entered into an agreement dated March 9, 2007 with Ranbaxy Pharmaceuticals Inc for developing Abbreviated New Drug Application. Income of Rs.687.55 lakhs received in respect of aforesaid activity has been included under sales and other operations.

11. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the Report of the Directors & Management Discussion and Analysis and Report on Corporate Governance are treated as an annexure to these accounts.

12. Figures of the previous year have been regrouped / recast wherever necessary to compare with current years classification.

Find IFSC