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Notes to Accounts of Morepen Laboratories Ltd.

Mar 31, 2023

CONTIGENT LIABILTY

Basic earning per share is calculated by dividing
the net profit or loss for the year attributable to the
equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity shares outstanding
during the year.

For the purpose of calculating the diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares. The dilutive
potential equity shares are deemed converted as
at beginning of the period, unless they have been
issued at a later date.

2.8 Employee Retirement benefits

i) Short term employee benefits

All employee benefits payable/available
within twelve months of rendering the service
are classified as short term employee benefits.
Benefits such as salaries, wages and bonus
etc., are recognised in the statement of profit
and loss in the period in which the employee
renders the related service.

ii) Post - employment benefits

Defined contribution plans -

Retirement benefits in the form of provident
fund is a defined contribution scheme. The
company has no obligation, other than the
contribution payable to the provident fund.

Payments to defined contribution plans are
recognised as an expense when employees
have rendered service entitling them to the
contributions.

Defined benefit plans -

Gratuity

The company has an obligation towards
gratuity, a defined benefit retirement plan
covering eligible employees. The Gratuity
payment plan provides for a lump sum
payment to the vested employees at
retirement, death, incapacitation while in
employment or on termination of
employment of an amount based on the
respective employee''s salary and tenure of
employment. Vesting occurs upon completion
of five years of service.

Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation, performed
by an independent actuary, at each balance
sheet date using the projected unit credit
method. Re-measurements comprising of
actuarial gains and losses, are recognised in
other comprehensive income which are not
reclassified to profit or loss in the subsequent
periods.

iii) Long - term employee benefits

Leave Encashment

The liability of accumulating compensated
absences is determined by actuarial valuation
performed by an independent actuary at each
balance sheet date using projected unit credit
method.

2.9 Segment Reporting

The company operates in one reportable business
segment i.e. "Pharmaceuticals".

3.0 Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet
comprise cash at bank and in hand and shortÂ¬
term deposits with banks that are readily
convertible into cash which are subject to
insignificant risk of changes in value and are held
for the purpose of meeting short-term cash
commitments.

Mar 31, 2018

A. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -

i) The company has equity shares having a par value of Rs.2/- each. Every member of the Company holding equity shares shall be entitled to vote on every resolution placed before the Company and their voting right on poll shall be in proportion to their share in the paid-up equity share capital of the Company.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company after distribution of preferential amounts. The distribution will be in the proportion of the number of equity shares held by the shareholders.

D. During last 5 years immediately preeceding the balance sheet date, no equity share has been issued pursuant to any contract without payment being received in cash. Further the company has neither allotted any share by way of bonus shares, nor it had bought back any equity during aforesaid period of 5 years.

B. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -

i) The Company has preference shares of Rs.100/- each. Every member of the Company holding preference shares shall be entitled to vote on resolutions placed before the Company which directly affect the rights attached to their shares and any resolution for winding up of the Company or for repayment or reduction of capital and their voting right on poll shall be in proportion to their share in the paid-up preference share capital of the Company. However, where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all resolutions placed before the Company and the proportion of voting rights of equity shareholders to the voting rights of preference shareholders shall be in proportion to their paid up capital.

ii) All 97,35,201, 0.01% Optionally Convertible Preference Shares, had already become due for redemption/ conversion in the financial year 2014-15 and could not be redeemed due to unavailibility of surplus.

iii) Out of 17,30,000, 0.01% Cumulative Reedemable Preference Shares, 2,00,000 Shares amounting to Rs.200.00 Lakhs were due for redemption in financial year ending 31.03.2012, whereas 50% of 15,30,000 Shares amounting to Rs.765.00 Lakhs were due for redemption in the financial year ending March 31, 2017 and balance 50% had fallen due for redemption during the current year.

iv) 5,00,000, 9.75% Cumulative Redeemable Preference Shares amounting to Rs.500.00 Lakhs had been due for redemption since March 2004, however, could not be redeemed because of unavailability of surplus. The subscriber has filed a legal case against the Company for the recovery of the sum invested as well as dividend thereon. The Company is contesting the claim of the subscriber at appropriate forum.

v) During the year, the Company could not redeem the Preference Shares, already due for redemption, on account unavailability of distributable profits in terms of Section 55(2)(a) and Section 123 of Companies Act, 2013.

1. SEGMENT REPORTING

In accordance with Indian Accounting Standard, Ind AS-108 âOperating Segmentâ, segment information has been given in consolidated financial statements of the company, and therefore, no seperate disclosure on segment information is given in these financial statements.

2. RELATED PARTY DISCLOSURES

Disclosure as required by Indian Accounting Standard âRelated Party Disclosuresâ (Ind AS 24) issued by the Institute of Chartered Accountants of India are as under:

3. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31â March, 2018. Hence, no provision is required in the accounts for the year under review.

4. INCOME TAX

a) As required by Indian Accounting Standard âIncome - taxesâ i.e. (Ind-AS 12) issued by the Institute of Chartered Accountants of India, deferred tax asset on accumulated losses, is not recognized as a matter of prudence.

b) The company has carried forward losses, therefore no provision for tax is required during the current year.

5. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of Directors, all assets and non-current investments stated otherwise have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

c) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

d) During the financial year ended March 31, 2010, pursuant to a Scheme of Arrangement & Compromise under Section 391 of the Companies Act, 1956 approved by the Honâble High Court of Himachal Pradesh vide its Order dated August 4, 2009 the Company allotted 9,24,90,413 Equity Shares to the fixed deposit holders in settlement of their dues. On an appeal filed against the said Order by the Central Government, the Honâble Division Bench of the Honâble High Court of Himachal Pradesh remanded the matter back to single judge for considering the representation of central government and deciding the matter afresh. The matter was later transferred to Honâble National Company Law Tribunal (NCLT), Chandigarh.

The Honâble NCLT vide its judgement dated March 12, 2018 dismissed the Companyâs petition seeking approval of the Scheme of arrangement with the Fixed Deposit holders. However, Honâble NCLT clarified that the Order will not affect the allotment of the shares to the FD holders who have traded the shares to the third parties or transferred the allotted shares. It was further directed that the Company shall pay the outstanding amount as per the scheme approved the Company Law Board (CLB) to the original FD holders (except to those who have since traded/transferred the shares allotted to them).

The Company had filed an appeal before the Honâble National Company Law Appellate Tribunal (NCLAT) at New Delhi against the order dated March 12, 2018 of the Honâble NCLT. The Honâble NCLAT while issuing notice to the Respondents have stayed the operation of the impugned Order dated March 12, 2018.

e) Remuneration paid to directors for the period April 2005 - March 2014 amounting to Rs.356.00 Lakhs is subject to central government approval.

f) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

6. FIRST TIME ADOPTION OF IND AS

This financial statement is the first financial statement that has been prepared in accordance with Ind AS together with the comparative period data as at and for the year ended 31â March 2017, as described in the summary of Significant Accounting Policies. The transition to Ind AS has been carried out in accordance with Ind AS 101-âFirst time adoption of Indian Accounting Standardsâ with 1 â April, 2016 as the transition date.

This note explains the exemptions availed by the Company on first time adoption of Ind AS and the principal adjustments made by the Company in restating its Indian GAAP financial statements as at 1â April 2016 and financial statements as at and for the year ended 31â March, 2017 in accordance with Ind AS 101.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has, accordingly, applied following exemptions:

a) The Company has elected to consider carrying amount of all items of property, plant and equipments measured as per Indian GAAP as recognized in the financial statements as at the date of transition, as deemed cost at the date of transition. The effect of consequential changes arising on the application of other Ind AS has been adjusted to the deemed cost of Property, Plant & Equipment.

b) The Company has adopted to measure investments in subsidiaries at cost in accordance with Ind AS 27 and therefore has measured such investments in its separate opening Ind AS balance sheet at carrying amount as per Indian GAAP at the date of transition in accordance with Ind AS 101.

c) The Company has availed the exemption of fair value measurement of financial assets or liabilities at initial recognition and accordingly will apply fair value measurement of financial assets or liabilities at initial recognition prospectively to transactions entered into on or after 01â April, 2016.

d) The estimates at 1â April, 2016 and at 31â March, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items under Indian GAAP did not require estimation:

- Fair values of Financial Assets & Financial Liabilities

- Impairment of financial assets based on expected credit loss modal

- Discount rates

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at 1â April, 2016 and 31â March, 2017.

Notes to the reconciliation of equity as at 1^st April, 2016 and 31^st March, 2017 and Total comprehensive income for the year ended 31^st March, 2017

1. Leasehold land

Under Indian GAAP, land on lease was not covered under âLeasesâ and therefore it was shown as Tangible assets. Under Ind AS, land on lease is considered as operating lease. Therefore, net block of leasehold land (31â March, 2017 Rs.26.06 Lakhs, 1â April, 2016 Rs.26.42 Lakhs) has been re-classified under the head âOther Non-Current Assetsâ whereas lease rental of Rs.0.36 Lakhs chargable within next 12 months has been classified under the head âOther Current Assetsâ. Further, lease rental of Rs.0.36 Lakhs has been charged to revenue during the year ended 31â March, 2017. Lease rentals of earlier years amounting to Rs.5.51 Lakhs and a sum of Rs.1.98 Lakhs spent on leasehold land have been charged to total equity as on 1â April, 2016.

2. Financial instruments measured at amortized cost

Under Indian GAAP, interest free loan to employees are recorded at their transaction value. Under Ind AS, these loans are to be measured at amortized cost on the basis of effective interest rate method. Due to this, long term loans to employees and short term loans to employees has been decreased and difference between carrying amount and amortized cost has been recognized as âDeferred employee costâ under the head âOther non-current assetsâ (01â April, 2016 Rs.12.41Lakh, 31â March, 2017 Rs.28.03 Lakh) and âOther current assetsâ (01â April, 2016 Rs.29.43 Lakh, 31â March, 2017 Rs.32.71 Lakh). Further, Employee benefit expense has been increased due to amortisation of the deferred employee benefit of Rs.2.04Lakh for 2016-17 which is offset by the notional interest income on loan to employees.

3. Defined benefit obligation

Under Ind AS, remeasurements i.e. actuarial gains and losses are to be recognized in âOther Comprehensive Incomeâ and are not to be reclassified to profit and loss in a subsequent period. Under the Indian GAAP, these remeasurements were forming part of the profit or loss. Therefore, actuarial gain/loss amounting to Rs.61.68 Lakhs for the financial year 2016-17 has been recognized in OCI, which was earlier recognised as Employee benefits expense. However, the same has no impact on the total equity as at 31â March, 2017.

4. Sale of goods

a. Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Thus, sale of goods under Ind AS has increased by Rs.1233.33 Lakhs with a corresponding increase in other expenses.

b. Under Indian GAAP, discounts including damaged and expired goods sales return were shown as expense. However under Ind AS, revenue is to be shown as net of discounts including damaged and expired goods sales returns. Accordingly, discounts and value of damaged and expired goods sales return, amounting to Rs.185.56 Lakhs has been reduced from revenue with a corresponding adjustment i n other expenses.

5. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on statement of cash flows.

Mar 31, 2018

Notes to Accounts

33 In the opinion of management, there is no impairment condition exists as on 31st March, 2018. Hence no provision is required in the accounts for the current period ending.

34 RELATED PARTY DISCLOSURES

Disclosure as required by the Ind AS-24 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given here under :

a.	Related parties	Name
i.	Subsidiary Companies	Blue Coast Hospitality Limited Golden Joy Hotel Private Limited Silver Resort Hotel India Pvt. Limited
ii.	Associate Company	Nil
iii.	Key Management Personnel	Mr. Sushil Suri - Chairman & Managing Director Mr. Dilip Bhagtani - Chief Financial Officer Mr. Shivam Kumar - Company Secretary (upto 17.03.2018)
iv.	Entities over which key management personnel/ relatives of key management personnel are able to exercise significant influence with which the Company has transactions during the period

b.	Transaction with Related parties	Nature of transaction	Amount
i.	Subsidiary Companies	Advances during the year	0.02
		Closing balance as on 31.03.2017	-
		Maximum balance outstanding during the year	-
ii.	Associate Company	Nil
iii.	Key Management Personnel	Remuneration / Perquisites	69.80
		Closing balance (Payable) / Recoverable	-
		Maximum balance outstanding during the year	-
iv.	Entities over which key management personnel/ relatives of key management personnel are able to exercise significant influence with which the Company has	Capital commitments
	transactions during the period.	Closing Balance as on 31.03.2018 (Payable / Recoverable)	-
		Maximum balance outstanding during the year - Receivable	-

35. Foreign Exchange Earnings

(Rs. In Lacs)

Particulars	31.03.2018	31.03.2017
Receipts from operations	4,264.28	3,870.30

Expenditure in Foreign Currency

Particulars	31.03.2018	31.03.2017
Capital Goods	-	40.05
Others	773.17	1,685.53

36 OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all the assets, except stated otherwise, have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of trade receivables, trade payables, current/ non-current advances given/ received, amount recoverable from parties are subject to reconciliation and confirmation from respective parties.

c) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout by making the suitable adjustment in the respective accounting heads

37 FIRST TIME ADOPTION OF Ind AS

This financial statement is the first financial statement that has been prepared in accordance with Ind AS together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant Accounting Policies. The transition to Ind AS has been carried out in accordance with Ind AS lOl-''First time adoption of Indian Accounting Standards'' with 1st April 2016 as the transition date.

This note explains the exemptions availed by the company on first time adoption of Ind AS and the principal adjustments made by the Company in restating its Indian GAAP financial statements as at 1st April 2016 and financial statements as at and for the year ended 31st March 2017 in accordance with Ind AS 101.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has, accordingly, applied following exemptions:

a) The Company has elected to consider carrying amount of all items of property, plant and equipment''s measured as per Indian GAAP as recognized in the financial statements as at the date of transition, as deemed cost at the date of transition. The effect of consequential changes arising on the application of other Ind AS has been adjusted to the deemed cost of Property, Plant & Equipment.

d) The estimates at 1st April 2016 and at 31st March, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items under Indian GAAP did not require estimation:

Fair values of Financial Assets & Financial Liabilities Impairment of financial assets based on expected credit loss modal Discount rates

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at 1st April, 2016 and 31st March, 2017.

Disclosure as required by Ind AS 101- First time adoption of Indian Accounting Standards

Reconciliation of Equity - (Rs in Lakhs)

Particulars	As at 31st March 2017			As at 1st April 2016
	As per Indian GAAP	IND AS Adjustments	As per IND AS	As per Indian GAAP	IND AS Adjustments	As per IND AS
ASSETS
Non-current assets
Property Plant and Equipment	16,838.68	_	16,838.68	17,128.27	_	17,128.27
Capital Work In Progress	163.26	-	163.26	46.20	-	46.20
Intangible Assets	64.24	-	64.24	6.94	-	6.94
Financial Assets :			-			-
Investments	23,139.25	-	23,139.25	23,139.23	-	23,139.23
Loans	464.92	-	464.92	464.72	-	464.72
Other Financial Assets	-	-	-	-	-	-
Other Non-Current Assets Total Non-current assets Current assets	110.22	-	110.22	101.16	-	101.16
	40,780.57	-	40,780.57	40,886.52	-	40,886.52

Inventories	302.62	-	302.62	1,337.58	-	1,337.58
Financial Assets :			-			-
Investments	250.00	-	250.00	-	-	-
Trade receivables	963.90	-	963.90	572.40	-	572.40
Cash and Cash Equivalents	1,007.92	-	1,007.92	142.98	-	142.98
Bank Balances other than
Cash and Cash Equivalents	-	-	-	-	-	-
Loans	-	-	-	-	-	-
Other current Assets	4,823.12	-	4,823.12	3,718.19	-	3,718.19
Total Current Assets	7,347.56	-	7,347.56	5,771.15	-	5,771.15
Total Assets	48,128.13	-	48,128.13	46,657.67	-	46,657.67

	EQUITY AND LIABILITIES
	Equity
	(a) Equity Share Capital	1,274.85	-	1,274.85	1,274.85	-	1,274.85
	(b) Other equity	5,236.19	(4,344.98)	891.21	5,838.98	4,926.51	10,765.49
	Total Equity	6,511.04	(4,344.98)	2,166.06	7,113.83	4,926.51	12,040.34
1	Liabilities
	Non-current Liabilities
	Financial Liabilities
	Borrowings	4,237.56	-	4,237.56	4,152.32	-	4,152.32
	Other Financial liabilities	98.66	-	98.66	98.64	-	98.64
	Long term provisions	165.08	-	165.08	148.58	-	148.58
	Total Non-current Liabilities	4,501.30	-	4,501.30	4,399.54	-	4,399.54
2	Current Liabilities
	Financial Liabilities
	Borrowings	-	-	-	-	-	-
	Trade Payables	872.02	-	872.02	626.07	-	626.07
	Other Financial Liabilities	34,882.68	4,344.98	39,227.66	33,095.69	(4,926.51)	28,169.18
	Other Current Liabilities	1,335.81	-	1,335.81	1,235.91	-	1,235.91
	Provisions	25.28	-	25.28	186.63	-	186.63
	Total Current Liabilities	37,115.79	4,344.98	41,460.77	35,144.30	(4,926.51)	30,217.79
	Total Equity and Liabilities	48,128.13	-	48,128.13	46,657.67	-	46,657.67

Reconciliation of Total Comprehensive Income for the year ended March 31, 2017			(Rs. in Lakhs)
Particulars	As per Indian GAAP	IND AS Adjustments	As per IND AS
Revenue from Operations (Net)	13,265.90	-	13,265.90
Other Income	113.26	-	113.26
Total revenue	13,379.16	-	13,379.16
Expenses :
Cost of materials Consumed	2,710.35	_	2,710.35
Employee benefits expense	2,599.69		2,599.69
Finance costs	2,454.49	415.00	2,869.49
Depreciation and amortization	663.01	-	663.01
Other expenses	5,615.54	-	5,615.54
Total Expenses	14,043.08	415.00	14,458.08
Profit before Tax	(663.92)	(415.00)	(1,078.92)
Tax expense Prior Period	61.17	-	61.17
Tax (MAT)	-	-	-
MAT Credit Entitlement	-	-	-

Profit for the Year	(602.75)	(415.00)	(1,017.75)
Other Comprehensive Income
Items that will not be reclassified to profit or loss -	-	-	-
Remeasurements of the defined benefit plans	-	-	-
Total Comprehensive Income for the period	(602.75)	(415.00)	(1,017.75)

Notes to the reconciliation of equity as at 1st April 2016 and 31st March 2017 and Total comprehensive income for the year ended 31st March 2017

1. Defined benefit obligation

Under Ind AS, remeasurements i.e. actuarial gains and losses are to be recognized in ''Other Comprehensive Income'' and are not to be reclassified to profit and loss in a subsequent period. Under the Indian GAAP, these remeasurements were forming part of the profit or loss. Therefore, actuarial gain/loss amounting to Rs. 61.67 Lakhs for the financial year 2016-17 has been recognized in OCI, which was earlier recognised as Employee benefits expense. However, the same has no impact on the total equity as at 31st March, 2017

2. Statement of cashflows

The transition from Indian GAAP to Ind AS has not had a material impact on statement of cash flows.

Mar 31, 2018

Notes to Accounts

33 In the opinion of management, there is no impairment condition exists as on 31st March, 2018. Hence no provision is required in the accounts for the current period ending.

34 RELATED PARTY DISCLOSURES

Disclosure as required by the Ind AS-24 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given here under :

a.	Related parties	Name
i.	Subsidiary Companies	Blue Coast Hospitality Limited Golden Joy Hotel Private Limited Silver Resort Hotel India Pvt. Limited
ii.	Associate Company	Nil
iii.	Key Management Personnel	Mr. Sushil Suri - Chairman & Managing Director Mr. Dilip Bhagtani - Chief Financial Officer Mr. Shivam Kumar - Company Secretary (upto 17.03.2018)
iv.	Entities over which key management personnel/ relatives of key management personnel are able to exercise significant influence with which the Company has transactions during the period

b.	Transaction with Related parties	Nature of transaction	Amount
i.	Subsidiary Companies	Advances during the year	0.02
		Closing balance as on 31.03.2017	-
		Maximum balance outstanding during the year	-
ii.	Associate Company	Nil
iii.	Key Management Personnel	Remuneration / Perquisites	69.80
		Closing balance (Payable) / Recoverable	-
		Maximum balance outstanding during the year	-
iv.	Entities over which key management personnel/ relatives of key management personnel are able to exercise significant influence with which the Company has	Capital commitments
	transactions during the period.	Closing Balance as on 31.03.2018 (Payable / Recoverable)	-
		Maximum balance outstanding during the year - Receivable	-

35. Foreign Exchange Earnings

(Rs. In Lacs)

Particulars	31.03.2018	31.03.2017
Receipts from operations	4,264.28	3,870.30

Expenditure in Foreign Currency

Particulars	31.03.2018	31.03.2017
Capital Goods	-	40.05
Others	773.17	1,685.53

36 OTHERS SIGNIFICANT DISCLOSURES

c) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout by making the suitable adjustment in the respective accounting heads

37 FIRST TIME ADOPTION OF Ind AS

This financial statement is the first financial statement that has been prepared in accordance with Ind AS together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant Accounting Policies. The transition to Ind AS has been carried out in accordance with Ind AS lOl-''First time adoption of Indian Accounting Standards'' with 1st April 2016 as the transition date.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has, accordingly, applied following exemptions:

Fair values of Financial Assets & Financial Liabilities Impairment of financial assets based on expected credit loss modal Discount rates

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at 1st April, 2016 and 31st March, 2017.

Disclosure as required by Ind AS 101- First time adoption of Indian Accounting Standards

Reconciliation of Equity - (Rs in Lakhs)

Particulars	As at 31st March 2017			As at 1st April 2016
	As per Indian GAAP	IND AS Adjustments	As per IND AS	As per Indian GAAP	IND AS Adjustments	As per IND AS
ASSETS
Non-current assets
Property Plant and Equipment	16,838.68	_	16,838.68	17,128.27	_	17,128.27
Capital Work In Progress	163.26	-	163.26	46.20	-	46.20
Intangible Assets	64.24	-	64.24	6.94	-	6.94
Financial Assets :			-			-
Investments	23,139.25	-	23,139.25	23,139.23	-	23,139.23
Loans	464.92	-	464.92	464.72	-	464.72
Other Financial Assets	-	-	-	-	-	-
Other Non-Current Assets Total Non-current assets Current assets	110.22	-	110.22	101.16	-	101.16
	40,780.57	-	40,780.57	40,886.52	-	40,886.52

Inventories	302.62	-	302.62	1,337.58	-	1,337.58
Financial Assets :			-			-
Investments	250.00	-	250.00	-	-	-
Trade receivables	963.90	-	963.90	572.40	-	572.40
Cash and Cash Equivalents	1,007.92	-	1,007.92	142.98	-	142.98
Bank Balances other than
Cash and Cash Equivalents	-	-	-	-	-	-
Loans	-	-	-	-	-	-
Other current Assets	4,823.12	-	4,823.12	3,718.19	-	3,718.19
Total Current Assets	7,347.56	-	7,347.56	5,771.15	-	5,771.15
Total Assets	48,128.13	-	48,128.13	46,657.67	-	46,657.67

	EQUITY AND LIABILITIES
	Equity
	(a) Equity Share Capital	1,274.85	-	1,274.85	1,274.85	-	1,274.85
	(b) Other equity	5,236.19	(4,344.98)	891.21	5,838.98	4,926.51	10,765.49
	Total Equity	6,511.04	(4,344.98)	2,166.06	7,113.83	4,926.51	12,040.34
1	Liabilities
	Non-current Liabilities
	Financial Liabilities
	Borrowings	4,237.56	-	4,237.56	4,152.32	-	4,152.32
	Other Financial liabilities	98.66	-	98.66	98.64	-	98.64
	Long term provisions	165.08	-	165.08	148.58	-	148.58
	Total Non-current Liabilities	4,501.30	-	4,501.30	4,399.54	-	4,399.54
2	Current Liabilities
	Financial Liabilities
	Borrowings	-	-	-	-	-	-
	Trade Payables	872.02	-	872.02	626.07	-	626.07
	Other Financial Liabilities	34,882.68	4,344.98	39,227.66	33,095.69	(4,926.51)	28,169.18
	Other Current Liabilities	1,335.81	-	1,335.81	1,235.91	-	1,235.91
	Provisions	25.28	-	25.28	186.63	-	186.63
	Total Current Liabilities	37,115.79	4,344.98	41,460.77	35,144.30	(4,926.51)	30,217.79
	Total Equity and Liabilities	48,128.13	-	48,128.13	46,657.67	-	46,657.67

Reconciliation of Total Comprehensive Income for the year ended March 31, 2017			(Rs. in Lakhs)
Particulars	As per Indian GAAP	IND AS Adjustments	As per IND AS
Revenue from Operations (Net)	13,265.90	-	13,265.90
Other Income	113.26	-	113.26
Total revenue	13,379.16	-	13,379.16
Expenses :
Cost of materials Consumed	2,710.35	_	2,710.35
Employee benefits expense	2,599.69		2,599.69
Finance costs	2,454.49	415.00	2,869.49
Depreciation and amortization	663.01	-	663.01
Other expenses	5,615.54	-	5,615.54
Total Expenses	14,043.08	415.00	14,458.08
Profit before Tax	(663.92)	(415.00)	(1,078.92)
Tax expense Prior Period	61.17	-	61.17
Tax (MAT)	-	-	-
MAT Credit Entitlement	-	-	-

Profit for the Year	(602.75)	(415.00)	(1,017.75)
Other Comprehensive Income
Items that will not be reclassified to profit or loss -	-	-	-
Remeasurements of the defined benefit plans	-	-	-
Total Comprehensive Income for the period	(602.75)	(415.00)	(1,017.75)

Notes to the reconciliation of equity as at 1st April 2016 and 31st March 2017 and Total comprehensive income for the year ended 31st March 2017

1. Defined benefit obligation

2. Statement of cashflows

The transition from Indian GAAP to Ind AS has not had a material impact on statement of cash flows.

Mar 31, 2017

1. SEGMENT REPORTING

In accordance with AS-17 "Segment Reporting", segment information has been given in consolidated financial statements of the company and therefore, no seperate disclosure on segment information is given in these financial statements.

2. RELATED PARTY DISCLOSURES

Disclosure as required by accounting standard "Related Party Disclosures" (AS-18) issued by the Institute of Chartered Accountants of India are as under:

Related Parties

3. Subsidiary Companies

Morepen Inc. Overseas Company

Dr. Morepen Limited Domestic Company

Total Care Limited Domestic Company

4. Key Management Personnel Mr. Sushil Suri, Chairman & Managing Director

Mr. Ajay Sharma, Chief Financial Officer Mr. Thomas P. Joshua, Company Secretary

5. Relatives of Key Management Personnel with whom Mr. Sanjay Suri, Mr. Varun Suri, Mr. Anubhav Suri, the company has any transaction during the year Mr. Kushal Suri, Mrs. Sunita Suri, Mrs. Mamta Suri,

Mrs. Shalu Suri, Mrs. Amita Sharma

6. Entities over which Key Management Personnel/ or Not Any Relatives of key management personnel are able to

exercise significant influence with which the company has any transactions during the year

7. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31^st March, 2017. Hence, no provision is required in the accounts for the year under review.

8. TAXES

a) DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on accumulated losses, is not recognized as a matter of prudence.

b) MAT PROVISIONS

The company has carried forward losses, therefore no provision for Minimum Alternative Tax (MAT) is required during the current year. Accordingly provision of Rs.351.38 Lakhs made during the previous years has also been reversed during the current year.

9. OTHER SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all assets and non-current investments stated otherwise have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of Non-current liabilities, Current liabilities, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

c) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

d) During the financial year ending 31^st March, 2010, pursuant to the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956 approved by Hon''ble High Court at Shimla, the company had allotted 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues. The Central Government preferred an appeal against the said order, the Hon''ble Division Bench allowed the appeal and remanded the matter back to the single judge for considering the representation of Central Government & deciding the petition. The matter which was pending adjudication before single judge of Hon''ble Himachal Pradesh High Court, has since been transferred to National Company Law Tribunal (NCLT), regional bench at Chandigarh.

e) Remuneration paid to directors for the period April, 2005 - March, 2014 amounting to Rs. 356.00 Lakhs is subject to Central Government approval.

f) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

Mar 31, 2016

C. Rights, preferences and restrictions attached to each class of Shares and terms of redemption :

i) The company has two classes of shares referred as equity shares and preference shares having a par value of Rs. 10/each and par value of Rs. 100/- respectively. Each holder of equity shares is entitled to one vote per share, whereas in terms of Section 47(2) of the Companies Act, 2013 , the Preference Shareholders are entitled to vote on every resolution placed before the company in the General Meeting.

ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of preferential amounts. The distribution will be in the proportion of the number of equity shares held by the shareholders.

iii) 41,50,000 10% cumulative preference shares are redeemable at par in the year 2017-18. All these shares are subject to put and call option exercisable at the end of 3rd, 6th, 9th and 12th year of allotment. Dividend arrears on above cumulative preference shares as at 31.03.2016 are Rs. 5578.47 Lacs

iv) Capital Redemption Reserve for redemption of Preference Shares is not created during the year because of unavailability of surplus.

D. The company does not have a holding company, therefore, disclosure requirements about its parent company are not applicable in the present case.

*The ownership in equity shares held by Northern Projects Limited is in dispute & the matter is pending adjudication. The court has restrained the present owner of these shares from transferring, alienating, encumbering or otherwise dealing with or parting with the possession of the shares held by it till the disposal of the suit.

(A) Current Maturities of Non Convertible Debentures

a. Non Convertible Debentures together with interest, redemption premium etc. are secured by first charge over the immovable property included in the land appearing in the schedule of fixed assets and second charge on Company''s immovable properties located at 263C, Arossim, Cansaulim, Goa, both present and future and the charges of the Debenture holders shall be subject/subsequent to the existing charges of term loan lender IFCI Limited and lenders of working capital limits. The Company has pledged 10,00,00,000 number of equity shares of Silver Resort Hotel India Private Limited (a subsidiary of the company) held by the company.

b. The Company is contesting the suit filed by the Debenture holder against its alleged pre-mature recall / redemption of Debentures, disputed / default interest & redemption premium thereon and non-fulfillment of its other obligations which is pending adjudication. In view of the litigation, the Debenture Redemption Reserve is not created. ( Refer Note 23(b)

(B) Current Maturities of Term Loans from financial institutions

The secured lender IFCI Limited had initiated the recovery proceedings and allegedly auctioned the hotel property under the provisions of the SARFAESI Act which was contested by the Company at Hon''ble High Court of Bombay. By the Judgment dated 23.3.2016, the Hon''ble Bombay High Court quashed and set aside the alleged auction sale of property and directed secured lender IFCI Limited to refund the sale consideration to auction purchaser ITC Limited . subsequently ITC Ltd & IFCI Ltd have approached the Hon''ble Supreme Court against the Bombay High Court judgment whereupon the grant of stay against the order was not accepted. however, it ordered that ''Status Quo'' as on 22nd April, 2016 be maintained and further ordered that the amounts paid by ITC Limited in the auction purchase shall remain with the IFCI Ltd until further orders. The Hotel property continues to be operated under the brand "Park Hyatt Goa Resort & Spa" & maintained under management agreement with Hyatt International. (Refer Note 23(b)

(i) Provision for fall in carrying value of investments in respect of losses in the subsidiaries & the associate Company has not been made, as these losses, in management''s perception, are temporary in nature. These companies have not started commercial operation till the balance sheet date.

(ii) Out of 18,85,10,000 equity share of Rs. 10/- each fully paid up of subsidiary company Silver Resort Hotel India (P) Limited, 10,00,00,000 equity share of Rs. 10/- each are pledged with debenture holders. The remaining 8,85,10,000 equity shares are pledged with term lender.

(iii) All 15,600 equity share of Rs. 10/- each fully paid up of associate company Joy Hotel & Resorts (P) Limited are pledged with term lenders of the associate company for securing the term loans, interest on loans and all other related moneys payable as availed by the associate company for its upcoming five star hotel project at Chandigarh.

(iv) The investments in shares in Silver Resort Hotel India ( P ) Limited and associate company are made solely with the motive to acquire and retain controlling stake, in furtherance of its business interest in hotel business.

(i) The lenders to whom guarantee is given for securing term loans of associate company Joy Hotel & Resorts Private Limited have initiated recovery proceedings against the associate company under SARFAESI Act, 2002. The lenders are fully secured against the primary security i.e. mortgage of project land & building thereon. The associate company has also challenged the alleged illegal resumption of the project site by the Lessor due to non-fulfillment of the terms of the change of land use from industrial to commercial use. Both the matters are pending adjudication.

(ii) The financial institution from which the company has taken term loan has also invested in the equity share capital of the subsidiary of the company Silver Resort Hotel India (P) Limited (setting up a five star hotel project near International Airport, Delhi) to the tune of Rs. 8500.00 Lacs. The company has executed Buy-back agreements on joint & several basis with the erstwhile directors. Till the buy back of entire equity is completed, IFCI Limited has an first charge basis on "Park Hyatt Goa Resort & Spa" Hotel property of the company situated at 263C,Arrossim, Cansaulim, Goa. Exercising the above right, the institution had called upon the company to honour buy back obligation in respect of equity contribution of Rs 8500 Lacs along with simple assured return on the investment @ 23% per annum (disputed) w.e.f. date of agreement dated 12.03.2010. The recall / claim will be contested due to non-fulfillment of the obligations undertaken by the financial institution.

(iii) Disputed Claim for non performance of obligations to Punjab Urban Development Authority (PUDA) of Rs 1031.18 Lacs (previous year Rs 776.25 Lacs) pertains to subsidiary company Golden Joy Hotel (P) Limited. The company was a bidder for the project and had given a Bank Guarantee of Rs 500 Lacs ( Previous Year Rs 500 Lacs ) which has since expired and the claim will be contested by the Company for non-fulfillment of the obligations undertaken by PUDA under the Agreements

1. PRIOR PERIOD ITEMS

Expenses include Rs. 20.00 Lacs (Previous Year Rs.1.28 Lacs) as expenses (net) relating to earlier years.

2. SEGMENT REPORTING

The Company''s business activity falls within a single primary business segment i.e. hotel operations, hence the disclosure requirements of Accounting Standards (AS - 17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

3. DEFERRED TAX ASSET/LIABILITY :

As required by Accounting Standard - 22 "Accounting for taxes on income" issued by Institute of Chartered Accountants of India, deferred tax asset on losses for the year has not been created as a matter of prudence.

4. In the opinion of management, there is no impairment condition exists as on 31st March, 2016. Hence no provision is required in the accounts for the current period ending.

5. OTHERS SIGNIFICANT DISCLOSURES

b) Balances with parties, lenders & banks appearing under various heads are subject to confirmation.

c) In view of the brought forward losses, the provision for income tax is made under the provisions of the Minimum Alternate Tax ( MAT )

d) During the year, in view of the pending litigations ( Refer Note 9(A) (a) & (b) , the tax deduction at source is deferred & adjusted for the previous years under the respective party accounts till the settlement of the cases.

e) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout by making the suitable adjustment in the respective accounting heads

f) Figures have been given in Lacs.

Mar 31, 2016

C. Rights, preferences and restrictions attached to each class of Shares and terms of redemption :

iv) Capital Redemption Reserve for redemption of Preference Shares is not created during the year because of unavailability of surplus.

D. The company does not have a holding company, therefore, disclosure requirements about its parent company are not applicable in the present case.

(A) Current Maturities of Non Convertible Debentures

(B) Current Maturities of Term Loans from financial institutions

1. PRIOR PERIOD ITEMS

Expenses include Rs. 20.00 Lacs (Previous Year Rs.1.28 Lacs) as expenses (net) relating to earlier years.

2. SEGMENT REPORTING

3. DEFERRED TAX ASSET/LIABILITY :

4. In the opinion of management, there is no impairment condition exists as on 31st March, 2016. Hence no provision is required in the accounts for the current period ending.

5. OTHERS SIGNIFICANT DISCLOSURES

b) Balances with parties, lenders & banks appearing under various heads are subject to confirmation.

c) In view of the brought forward losses, the provision for income tax is made under the provisions of the Minimum Alternate Tax ( MAT )

e) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout by making the suitable adjustment in the respective accounting heads

f) Figures have been given in Lacs.

Mar 31, 2016

1. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2016. Hence, no provision is required in the accounts for the year under review.

2. DEFERRED TAX LIABILITY/ (ASSET)

3. OTHER SIGNIFICANT DISCLOSURES

b) On 8th December 2015, the business of M/s. Medicare Textiles, a proprietorship firm engaged in manufacture of surgical materials, was merged with business of the company. The company has followed ''amalgamation in the nature of purchase'' method of accounting to reflect the amalgamation in its books of accounts. The company has paid a sum of Rs. 6.29 lacs towards acquiring business, comprising of various licenses and certificates and fixed assets of the proprietorship firm. The book value of fixed assets acquired by the company is Rs. 3.50 lacs and balance Rs. 2.79 lacs have been paid towards goodwill of the acquired business.

c) With a view to increase its visibility in the promising FMHG/OTC business and reap the potential benefits in the above business streams, with added advantages of better brand building, customer confidence and better product quality, the company has decided to acquire/buyout new brands, expand the existing brands and product portfolio, during the year, a sum of Rs.1973.92 (Previous Year Rs. 2558.57 Lacs), year to date Rs. 5227.25 Lacs has been advanced, to Dr. Morepen Limited, its wholly owned subsidiary for the same.

d) Balances of Non-current liabilities, Current liabilities, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

e) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

f) During the financial year ending 31st March 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon''ble High Court at Shimla. The central government preferred an appeal against the said order before Division Bench of the High Court which was allowed. While setting aside the impugned order, matter was remanded back to the single judge for considering the representation of Central Government & deciding the petition afresh after hearing all the parties. The matter is pending for adjudication before single judge of Hon''ble Himachal Pradesh High Court.

g) Remuneration paid to directors for the period April 2005 - March 2014 amounting to Rs. 356.00 lacs is subject to central government approval.

h) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

Mar 31, 2015

1. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -

a) i) The company has two classes of shares referred as equity shares and preference shares. The equity shares are having a

par value of Rs. 2/- each whereas par value for each preference shares is Rs. 100/-. Every holder of equity shares is entitled to one vote per share in respect of all matters submitted to vote in the shareholders' meeting. Preference share holders are entitled to one vote per share, in respect of every resolutions placed before the company which directly affect the rights attached to their shares. However, a preference shareholder acquires voting rights at par with an equity shareholder if the dividend on preference shares has remained unpaid for a period of not less than two years.

ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of preferential amounts. The distribution will be in the proportion of the number of equity shares held by the shareholders.

iii) 1 7,30,000, 0.01% Redeemable Preference Shares of Rs. 100/- each and 5,00,000, 9.75% Redeembale Preference Shares of Rs. 100/- each are cummulative. Dividend arrears on these shares as at 31.03.2015 are Rs. 635 Lacs (Previous year Rs. 586 Lacs).

b) i) All 97,35,201, 0.01% Optionally Convertible Preference Shares, Shares having fallen due for redemption/conversion during the year, could not be redeemed because of unavailability of surplus. The conversion, if opted for, of preference shares into equity shares will be at price determined as per SEBI guidelines. Dividend arrears on above preference shares as at 31.03.2015 are Rs. 8 Lacs (Previous year Rs. 7 Lacs).

ii) Out of 1 7,30,000, 0.01 % Cummulative Reedemable Preference Shares, 15,30,000 Shares amounting Rs.1530 Lacs are redeemable in two equal installments, on May 4, 2016 & May 4, 201 7. Balance 2,00,000, Shares amounting Rs. 200 lacs, had already become due for redemption in the financial year ending 31.03.2012, could not be redeemed because of unavailability of surplus.

iii) 5,00,000, 9.75% Cumulative redeemable Preference shares amounting to Rs. 500 Lacs had been due for redemption since March 2004, however, could not be redeemed because of unavailability of surplus. The subscriber has filed a legal case against the company for the recovery of the sum invested as well as interest thereon. The company has contested the claim of the subscriber and have moved the jurisdictional appellant authorities against the said claim.

iv) Capital Redemption Reserve for redemption of Preference Shares could not be created during the year because of unavailability of surplus.

2. The company itself being ultimate holding company, therefore, disclosure requirements about its parent company are not applicable in the present case.

3. During last 5 years immediately preeceding the balance sheet date, no Equity Share or Preference share has been issued pursuant to any contract without payment being received in cash. Further the company has neither allotted any share by way of bonus shares, nor it had bought back any Equity or Preference Share during aforesaid period of 5 years.

4. Term Loans from Banks & Institutions

A. Term loans, except noted at (d) below, are secured by a first charge created by way of a joint equitable mortgage on pari - passu basis on all immovable and movable fixed assets, including plant and machinery, land & buildings and others, both present and future, first charge over Escrow/Trust and Retention Account, and second charge on the current assets of the company, both present and future. Further these loans are secured by personal guarantee of Managing Director of the company.

5. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

a) Contingent Liabilties

Claim against the Company not 1166 1144 acknowledged as debts

Guarantees 27 9

Other money for which company is 1131 1477 contingently liable

Arrears of Fixed Cummulative Dividends 643 593 on Preference Shares

Bills discounted with banks 309 126

3276 3349

b) Commitments - -

3276 3349

6. PRIOR PERIOD ITEMS

Expenses include Rs. 11 lacs (Previous Year Rs. 195 lacs) as expenses (net) relating to earlier years.

7. SEGMENT REPORTING

In accordance with AS-17 "Segment Reporting", segment information has been given in consolidated financial statements of the company, and therefore, no seperate disclosure on segment information is given in these financial statements.

8. RELATED PARTY DISCLOSURES

Disclosure as required by accounting standard "Related Party Disclosures" (AS-18) issued by the Institute of Chartered Accountants of India are as under:

9. Related Parties

1 Subsidiary Companies MorepenMax Inc. Morepen Inc. Dr. Morepen Limited Total Care Limited

Overseas Company Overseas Company Domestic Company Domestic Company

2. Associates Morepen Biotech Limited (up to 30.09.2014)

Domestic Company

3. Key Management Personnel

Mr. Sushil Suri, Chairman & Managing Director Dr. A.K. Sinha, Whole Time Directors Mr. Ajay Sharma, Chief Financial Officer Mr. Thomas Joshua,Company Secretary

4. Relatives of Key Management personnnels with whom the company has any transaction during the year

Ms. Amita Sharma Mr. Sanjay Suri

5. Entities over which key management personnel/ or Relatives of key management personnel are able to exercise significant influence with which the company has any transactions during the year

Not Any

10. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2015. Hence, no provision is required in the accounts for the year under review.

11. DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

12. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all assets and non-current investments stated otherwise have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) With a view to increase its visibility in the promising FMHG/OTC business and reap the potential benefits in the above business streams, with added advantages of better brand building, customer confidence and better product quality, the company has decided to acquire/buyout new brands, expand the existing brands and product portfolio, a sum of Rs. 3393 Lacs has been advanced to Dr. Morepen Limited, its wholly owned subsidiary for the same.

c) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

d) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

e) During the financial year ending 31st March 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon'ble High Court at Shimla. The central government preferred an appeal against the said order before Division of the High Court which was allowed. While setting aside the impugned order, matter was remanded back to the single judge for considering the representation of Central Government & deciding the petition afresh after hearing all the parties. The matter is pending for adjudication before single judge of Hon'ble Himachal Pradesh High Court.

f) Remuneration paid to directors' for the period April 2005 - March 2014 amounting to Rs. 356 lacs is subject to central government approval.

g) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

h) Figures have been rounded off to the nearest lacs.

Mar 31, 2014

1. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -

a) i) The company has two classes of shares referred as equity shares and preference shares. The equity shares are having a par value of Rs. 2/- each whereas par value for each preference shares is Rs. 100/-. Every holder of equity shares is entitled to one vote per share in respect of all matters submitted to vote in the shareholders'' meeting. Preference share holders are entitled to one vote per share, in respect of every resolution placed before the company which directly affect the rights attached to their shares. However, a cumulative preference shareholder acquires voting rights at par with an equity shareholder if the dividend on preference shares has remained unpaid for a period of not less than two years.

ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of preferential amounts. The distribution will be in the proportion of the number of equity shares held by the shareholders.

iii) 17,30,000, 0.01% Redeemable Preference Shares of Rs. 100/- each and 5,00,000, 9.75% Redeembale Preference Shares of Rs. 100/- each are cummulative. Dividend arrears on these shares as at 31.03.2014 are Rs. 586 Lacs (Previous year Rs. 537 Lacs).

b) i) Out of 97,35,201, 0.01% Optionally Convertible Preference Shares, Shares amounting to Rs. 7,040 Lacs fall due for redemption/conversion on May 4, 2014, shares amounting to Rs. 1,762 Lacs are due for redemption on May 31, 2014 whereas balance shares amounting to Rs. 933 Lacs are due for redemption/conversion on February 9, 2015. The conversion, if opted for, of preference shares into equity shares will be at price determined as per SEBI guidelines. Dividend arrears on above preference shares as at 31.03.2014 are Rs. 7 Lacs (Previous year Rs. 6 Lacs).

ii) Out of 1 7,30,000, 0.01% Cummulative Reedemable Preference Shares, 15,30,000 Shares amounting Rs. 1,530 Lacs are redeemable in two equal installments, on May 4, 2016 & May 4, 2017. Balance 2,00,000, Shares amounting Rs. 200 lacs, had already become due for redemption in the financial year ending 31.03.2012, could not be redeemed because of unavailability of surplus.

iii) 5,00,000, 9.75% Cumulative redeemable Preference shares amounting to Rs. 500 Lacs had been due for redemption since March, 2004, however, could not be redeemed because of unavailability of surplus. The subscriber has filed a legal case against the company for the recovery of the sum invested as well as interest thereon. The company has contested the claim of the subscriber and have moved the jurisdictional appellant authorities against the said claim.

iv) Capital Redemption Reserve for redemption of Preference Shares could not be created during the year because of unavailability of surplus.

2. The company itself being ultimate holding company, therefore, disclosure requirements about its parent company are not applicable in the present case.

3. During last 5 years immediately preeceding the balance sheet date, no Equity Share or Preference share has been issued pursuant to any contract without payment being received in cash. Further the company has neither allotted any share by way of bonus shares, nor it had bought back any Equity or Preference Share during aforesaid period of 5 years.

4. Term Loans from Banks & Institutions

a. Term loans, except noted at (d) below, are secured by a first charge created by way of a joint equitable mortgage on pari-passu basis on all immovable and movable fixed assets, including plant and machinery, land & buildings and others, both present and future, first charge over Escrow/Trust and Retention Account, and second charge on the current assets of the company, both present and future. Further these loans are secured by personal guarantee of Managing Director of the company.

5. Unsecured Loans

During the year, the company has repaid the outstanding loan amounting to Rs. 1,074 Lacs (Previous Year Rs. 430 Lacs)

6. Current portion of long term borrowings is appearing under the head Other current liabilities. (Refer Note No. 9)

7. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

a) Contingent Liabilties

Claim against the Company not acknowledged as debts 1144 1525

Guarantees 9 14

Other money for which company is contingently liable 1477 1274

Arrears of Fixed Cummulative Dividends on Preference 593 543 Shares

Bills discounted with banks 126 134

3349 3490

b) Commitments - -

3349 3490

8. Extraordinary items of Rs. 290 Lacs (Previous year 308 Lacs) represent net of surplus of Rs. 677 Lacs accruing on account of settlement with one of the lenders of the Company and amount of Rs. 387 Lacs provided towards fall in carrying value of investment in the associate company.

9. PRIOR PERIOD ITEMS

Expenses include Rs.195 lacs (Previous Year Rs. 110 lacs) as expenses (net) relating to earlier years.

10. SEGMENT REPORTING

In accordance with AS-17 "Segment Reporting", segment information has been given in consolidated financial statements of the company and therefore, no seperate disclosure on segment information is given in these financial statements.

11. RELATED PARTY DISCLOSURES

Disclosure as required by accounting standard "Related Party Disclosures" (AS-18) issued by the Institute of Chartered Accountants of India are as under:

12. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2014. Hence, no provision is required in the accounts for the year under review.

13. DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

14. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all assets and non-current investments stated otherwise have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

c) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be known & accounted for, on the completion of assessments.

d) During the financial year ending 31st March, 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon''ble High Court at Shimla. The central government preferred an appeal against the said order and the Hon''ble Divisional Bench while admitting the appeal directed the implementation of the Scheme subject to the final outcome of the Appeal. The matter has now been remanded back to the single judge of Hon''ble Himachal Pradesh High Court for giving Central Government a hearing and adjudicating the matter.

e) Remuneration paid to directors'' for the period April, 2005 - March, 2014 of Rs. 356 lacs, including current year remuneration of Rs. 52 lacs is subject to approval from Central Government.

f) In view of losses during the year, the managing director has been paid a salary of Rs. 24 lacs, out of approved salary of Rs. 60 lacs. Balance salary of Rs. 36 lacs has been forgone by him and hence not provided in the accounts.

g) Taxation - No Provision for current Income tax has been made in view of loss during the year.

h) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

i) Figures have been rounded off to the nearest lacs.

Mar 31, 2013

(Rs. in Lacs)

As at As at 31.03.2013 31.03.2012

1. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

a) Contingent Liabilities

Claim against the Company not acknowledged as debts 1525 459

Guarantees 14 4

Other money for which company is contingently liable 1274 120

Arrears of Fixed Cummulative Dividends on Preference Shares 543 493

Bills discounted with banks 134 229

3490 1305

b) Commitments

3490 1305

2. PRIOR PERIOD ITEMS

Expenses include Rs. 110 lacs (Previous Year Rs. 6 lacs) as expenses (net) relating to earlier years.

3. SEGMENT REPORTING

In accordance with AS-17 "Segment Reporting", segment information has been given in consolidated financial statements of the company, and therefore, no seperate disclosure on segment information is given in these financial statements.

4. RELATED PARTY DISCLOSURES

Disclosure as required by accounting standard "Related Party Disclosures" (AS-18) issued by the Institute of Chartered Accountants of India are as under:

Related Parties

1 Subsidiary Companies

MorepenMax Inc. Overseas Company

Morepen Inc. Overseas Company

Dr. Morepen Limited Domestic Company

Total Care Limited Domestic Company

2. Associates

Morepen Biotech Limited Domestic Company

3. Key Management Personnel Mr. Sushil Suri, Chairman & Managing Director (Whole Time Directors) Dr. A.K. Sinha

4. Relatives of key Management personnels with whom the company has any transaction during the year

Nil

5. Entities over which key management personnel/ or Relatives of key management personnel are able to exercise significant influence with which the company has any transactions during the year

Blue Coast Infrastructure Development Private Limited

5. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2013. Hence, no provision is required in the accounts for the year under review.

6. DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

7. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances and banks are subject to confirmation.

c) The application for compounding of offences for violation of various provisions of the Companies Act, 1956 as pointed out in the inspection report, in respect of inspection carried out under section 209A of the said Act, is pending with the Central Govt.

d) During the financial year ending 31st March 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon''ble High Court at Shimla. The central government preferred an appeal against the said order and the Hon''ble Divisional Bench while admitting the appeal directed the implementation of the Scheme subject to the final outcome of the Appeal. The matter has now been remanded back to the single judge of Hon''ble Himachal Pradesh High Court for giving Central Government a hearing and adjudicating the matter.

e) Remuneration paid to directors'' for the period April 2005 - March 2013, of Rs. 304 lacs, including current year remuneration of Rs. 50 lacs is subject to approval from Central Government.

f) In view of losses during the year, the managing director has been paid a salary of Rs. 24 lacs, out of approved salary of Rs. 60 lacs. Balance salary of Rs. 36 lacs has been forgone by him and hence not provided in the accounts.

g) Taxation - No Provision for current Income tax has been made in view of loss during the year.

h) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be accounted for, on the completion of assessments.

i) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

j) Figures have been rounded off to the nearest lacs.

Mar 31, 2012

A. Rights, preferences and restrictions attached to each class of Shares and terms of redemption -

a) i) The company has mainly two classes of shares referred as equity shares and preference shares. The equity shares are having a par value of Rs. 2/- each whereas par value for each preference shares is Rs. 100/-. Every holder of equity shares is entitled to one vote per share in respect of all matters submitted to vote in the shareholders' meeting. Preference share holders are entitled to one vote per share, in respect of every resolutions placed before the company which directly affect the rights attached to their shares.

ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company after distribution of preferential amounts. The distribution will be in the proportion of the number of equity shares held by the shareholders.

iii) Preference share capital is non - Cumulative, except in the case of 5,00,000, 9.75% Preference Shares of Rs. 100/- each. Dividend arrears on above cumulative preference shares as at 31.03.2012 are Rs. 488 Lacs.

b) i) Out of 97,35,201, 0.01% Optionally Convertible Preference Shares, amounting to Rs. 7040 Lacs are due for redemption/conversion on May 4, 2014, shares amounting to Rs. 1762 Lacs are due for redemption on May 31, 2014 whereas balance shares amounting to Rs. 933 Lacs are due for redemption/conversion on February 9, 2015. The conversion, if opted for, of preference shares into equity shares will be at price determined as per SEBI guidelines.

ii) Out of 17,30,000, 0.01% Cummulative Reedemable Preference Shares, 15,30,000 Shares amounting Rs.1530 Lacs are redeemable in two equal installments, on May 4, 2016 & May 4, 2017. Balance 2,00,000, Shares amounting Rs. 200 lacs, due for redemption in the current year, could not be redeemed because of unavailability of surplus.

iii) 5,00,000, 9.75% Cumulative redeemable Preference shares amounting to Rs. 500.00 Lacs had been due for redemption since March 13, 2004, however, could not be redeemed because of unavailability of surplus.

A. The company itself being ultimate holding company, therefore, disclosure requirements about its parent company are not applicable in the present case.

B. During last 5 years immediately preeceding the balance sheet date, no Equity Share or Preference share has been issued pursuant to any contract without payment being received in cash. Further the company has neither allotted any share by way of bonus shares, nor it had bought back any Equity or Preference Share during aforesaid period of 5 years.

Nature of Security and Terms of Repayment -

I. Term Loans from Banks

a. Term loans, except noted at (d) below, are secured by a first charge created by way of a joint equitable mortgage on pari -passu basis on all immovable and movable fixed assets, including plant and machinery, land & buildings and others, both present and future, first charge over Escrow/Trust and Retention Account, and second charge on the current assets of the company, both present and future. Further these loans are secured by personal guarantee of Managing Director of the company.

e. Debentures appearing under Note 8, Other Current Liabilities, amounting to Rs. 565 Lacs, along with interest, remuneration payable to trustees and other money due in respect thereof are secured by a first charge created jointly along with banks / financial institutions providing term loans. Surplus arising out of settlement of these debentures, being under negotiation, as per the approved CDR scheme, shall be accounted for at the time of final payout.

II. Unsecured Loans

Loans from related parties are due for repayment in the year 2013-14 and carry interest @ 21% per annum for the years 2012-13 & 2013-14.

1. CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in Lacs) (TO THE EXTENT NOT PROVIDED FOR) As at As at a) Contingent Liabilties 31.03.2012 31.03.2011

Claim against the Company not acknowledged as 459 343 debts

Guarantees 4 145

Other money for which company is contingently 120 - liable

Bills discounted with banks 229 -

812 488

b) Commitments - -

812 488

2. Extraordinary items of Rs. 1204 Lacs (Previous year Nil) represent surplus accruing on account of settlement of long term borrowing of the company.

3. PRIOR PERIOD ITEMS

Expenses include Rs. 6 lacs (Previous Year Rs. 5 lacs) as expenses (net) relating to earlier years.

4. SEGMENT REPORTING

In accordance with AS-17 "Segment Reporting", segment information has been given in consolidated financial statements of the company, and therefore, no separate disclosure on segment information is given in these financial statements.

5. IMPAIRMENT

It is the view of management that there are no impairment conditions that exist as on 31st March, 2012. Hence, no provision is required in the accounts for the year under review.

6. DEFERRED TAX LIABILITY/ (ASSET)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

7. OTHERS SIGNIFICANT DISCLOSURES

a) In the opinion of directors, all other assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the books of accounts and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

b) Balances of Non-current liabilities, Current liabilties, Long terms loans and advances, Trade receivables, Short term loans and advances are subject to confirmation.

c) The application for compounding of offences for violation of various provisions of the Companies Act, 1956 as pointed out in the report of inspection conducted under section 209A of the said Act is, pending with the Central Govt.

d) During the financial year ending 31st March 2010, the company had allotted, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon'ble High Court at Shimla. The central government preferred an appeal against the said order and the Hon'ble Divisional Bench while admitting the appeal directed the implementation of the Scheme subject to the final outcome of the Appeal. The matter has now been remanded back to the single judge of Hon'ble Himachal Pradesh High Court for giving central government a hearing and adjudicating the matter.

e) Remuneration paid to directors' for the period April 2005 - March 2012, of Rs. 254 lacs, including current year remuneration of Rs. 53 lacs is subject to approval from Central Govt.

f) In view of losses during the year, the managing director has been paid a salary of Rs. 29 lacs, out of approved salary of Rs. 60 lacs. Balance salary of Rs. 31 lacs has been forgone by him and hence not provided in the accounts.

g) Taxation

No Provision for current Income tax has been made in view of loss during the year.

h) Sales Tax assessments for earlier years are in progress. Demand, if any, shall be accounted for, on the completion of assessments.

i) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

j) Figures have been rounded off to the nearest lacs.

Mar 31, 2011

1. Share Capital

1.1 Preference Share Capital

1,19,65,201 Preference Shares of Rs. 100/- each consist of -

- 97,35,201, 0.01% Optionally Convertible Preference Shares, amounting to Rs. 9735.20 Lacs are due for redemption/conversion in financial year 2014-15.

- 15,30,000, 0.01% Preference Shares amounting Rs.1530.00 Lacs are redeemable in two equal installments in the financial years 2016-17 and 2017-18.

- 2,00,000, 0.01% Preference Shares amounting Rs. 200.00 lacs, are due for redemption in the financial year 2011-12.

- 5,00,000, 9.75% Cumulative redeemable Preference shares amounting to Rs. 500.00 Lacs have already become due for redemption.

2. Secured Loans

2.1 Non Convertible Debentures of Rs. 565.00 lacs (Previous Year Rs. 565.00 lacs ) are privately placed and comprise of: 100,000 - 15% NCDs (Rs.33.33 paid up); 100,000- 18.5% NCDs (Rs.66.00 paid up);2,00,000 - 17 % NCDs (Rs.66.50 paid up) ; 200,000 19% NCDs (Rs. 33.33 paid up); 400,000- 15.5% NCDs (Rs. 66.50 paid up).

All these debentures along with interest, remuneration payable to trustees and other money due in respect thereof are secured by a first charge created jointly along with banks / financial institutions providing term and corporate rupee loans except borrowings stated in Para 2.5 below.

2.2 Interest bearing portion of restructured debts of Rs. 6264.56Lacs (Previous Year Rs. 6325.62Lacs) due to institutions/banks is payable starting from financial year 2010-11 and shall be fully payable by 31st March, 2018.

2.3 Interest free portion of restructured debts of Rs. 5558.38 Lacs (Previous Year Rs 5559.76 Lacs) due to institutions/banks shall be due for payment in the financial years starting 2016-17 and shall be fully payable by 31st March 2018. The debt will be interest bearing from the financial year 2015-16.

2.4 Non-convertible debentures/ Term loans / restructured debts, are secured by a first charge created by way of joint equitable mortgage on pari - passu basis on all immovable and movable properties both present and future except borrowings stated in Para 2.5 below.

2.5 Other loans of Rs. 36.21 lacs (Previous year Rs. 28.40 lacs) are secured by hypothecation of specific assets purchased under the hire purchase scheme.

3. Unsecured Loans

Short term loans from others represent loans and inter corporate deposits from friends, relatives & others.

4. Current liabilities

Based on the information available with the Company, no amount is payable to Micro & Small Enterprises as defined under the MSMED Act, 2006. Further, no interest during the year has been paid or payable under the terms of the MSMED Act, 2006.

5. Fixed Assets

5.1 During the year, the company has made addition to fixed assets of Rs. 356.89 lacs (Previous year Rs. 438.79 lacs). Additions to fixed assets put to use have been capitalized. Depreciation on fixed assets is provided from the subsequent month after the asset is put to use. Fixed assets installed and put to use have been certified by the management.

5.2 Leasehold land is not amortised in view of para 1(c) of Accounting Standard on Leases (AS-19) issued by The Institute of Chartered Accountants of India defining scope of the standard.

6. Investments

The fall in value of investments, in unquoted shares and in respect of losses in subsidiary companies, has not been provided, as this, in view of management's perception, is temporary.

7. Inventories

The inventory of stocks, stores and spares has been taken, valued and certified by the management.

8. Bank Balances

Bank balances of Rs. 144.91 lacs (Previous year Rs. 28.52 lacs) in deposit accounts are pledged as margin money.

9. Miscellaneous expenditure

The miscellaneous expenditure of Rs. 128.48 Lacs (Previous Year Rs. 142.38 lacs) includes Rs. 69.06 Lacs in respect of capital issue expenses remaining un-adjusted and Rs 59.42 lacs towards marketing expenses, benefits of which are expected up to a period of 5 years.

10. In the opinion of directors, the current assets, loans and advances are of the value stated except otherwise stated in the accounts, if realized in the ordinary course of business and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

11. Balances of sundry creditors, secured and unsecured loans, sundry debtors, bank balances, loans and advances and security deposits are subject to confirmation.

12. The application for compounding of various offences under provisions of the Companies Act, 1956 is pending with the Central Govt.

13. The company had allotted, in the last financial year, 9,24,90,413 Equity Shares to fixed deposit holders towards settlement of their dues, under the Scheme of arrangement or compromise u/s 391 of the Companies Act, 1956, approved by Hon'ble High Court at Shimla. The central government preferred an appeal against the said order and the Hon'ble Divisional Bench while admitting the appeal directed the implementation of the Scheme subject to the final outcome of the Appeal. The matter has now been remanded back to the single judge of Hon'ble Himachal Pradesh High Court for giving central government a hearing and adjudicating the matter.

II. CONTINGENT LIABILITIES

(Rs. in lacs)

As at As at 31st March 2011 31st March 2010

Bank Guarantees 144.91 28.52

Accumulated dividend on preference shares 4.40 3.26

Claim against the Company not acknowledged as debt 342.84 338.51

Liability, if any, arising out of legal cases filed Amount not as Amount not

against the company by parties. certainable ascertainable

Note: -

a. The above remuneration and remuneration paid during the period April 2005 till March 2010 amounting to Rs. 198.17 lacs is subject to approval from Central Govt.

b. In view of losses during the year, the managing director has been paid a salary of Rs. 26.84 lacs, out of approved salary of Rs. 60.20 lacs. Balance salary of Rs. 33.36 lacs has been forgone by him and hence not provided in the accounts.

5. Taxation

No Provision for current Income tax has been made in view of loss during the year.

6. Expenses include Rs. 5.40 lacs (Previous Year Rs. 32.05 lacs) as expenses (net) relating to earlier years.

7. Sales Tax assessments for earlier years are in progress. Demand, if any, shall be accounted for, on the completion of assessments.

8. Dividend

No dividend is provided on equity/preference share capital in view of loss during the year.

9. Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

10. Segment Reporting

As the Company's business activity falls within a single primary business segment viz. ÃPharmaceuticalsÃ the disclosure requirements of Accounting Standards (AS-17) ÃSegment ReportingÃ, issued by The Institute of Chartered Accountants of India are not applicable.

12. Deferred Tax Liability/ (Asset)

As required by Accounting Standard ÃAccounting for taxes on incomeÃ i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

13. Impairment

It is the view of management that there are no impairment conditions that exist as on 31st March, 2011. Hence, no provision is required in the accounts for the year under review.

Mar 31, 2010

I BALANCE SHEET

1. Share Capital

1.1 Equity Share Capital

During the year, the company has allotted 9, 24, 90,413 Equity Shares of Rs. 2/-each fully paid up at a price of Rs. 11.32 per share, determined under SEBI (DIP) guidelines, to the fixed deposit holders of the company towards full and final settlement of their dues, pursuant to order passed by Honble High Court ofHimachal Pradesh atShimla approving the scheme of arrangement and compromise with fixed deposit holders.

1.2 Preference Share Capital

1,19,65,201 Preference Shares of Rs. 100/-each consist of-

- 97,35,201, 0.01% Optionally Convertible Preference Shares, amounting to Rs. 9735.20 Lacs are due for redemption/conversion in financial year 2014-15.

-15,30,000,0.01 % Preference Shares amounting Rs. 1530.00 Lacs are redeemable in two equal installments in the financial years 2016-1 7 and 201 7-18.

- 2,00,000,0.01 % Preference Shares amounting Rs. 200.00 lacs, aredue for redemption in the financial year 2011-12.

- 5,00,000, 9.75% Cumulative Redeemable Preference Shares amounting to Rs. 500.00 Lacs have already become due for redemption.

1.3 Naked Convertible Warrants

During the year, the company has forfeited the advance subscription amount of Rs. 270.40 Lacs received towards naked convertible warrants, on account of non-payment of balance 90% subscription money due on these warrants.

2. Reserves and Surplus

2.1 Addition to capital reserve of Rs. 270.40 Lacs, represents amount forfeited by the company, on account of non- payment within prescribed time period, of balance 90% subscription money due on the naked convertible warrants.

2.2 Addition to Securities Premium Account of Rs. 8620.11 Lacs represents premium on issue of 9,24,90,413 equity shares of Rs. 2/-each issued at a price of Rs. 11.32 per share issued to fixed deposit holders of the company towards full and final settlement of their dues.

2.3 Reduction of Rs. 357.42 lacs from Debenture Redemption Reserve represents reserve created in the earlier years and not required any longer in view of repayment/settlement of dues.

3. Secured Loans

3.1 Non Convertible Debentures of Rs.565.00 lacs (Previous Year Rs.565.00 lacs ) are privately placed and comprise of: 100,000 - 15% NCDs (Rs.33.33 paid up); 100,000- 18.5% NCDs (Rs.66.00 paid up);2,00,000 - 17 % NCDs (Rs.66.50 paid up); 200,000-19% NCDs (Rs. 33.33 paid up); 400,000-15.5% NCDs (Rs. 66.50 paid up).

All these debentures along with interest, remuneration payable to trustees and other money due in respect thereof are secured by a first charge created jointly along with banks / financial institutions providing term and corporate rupee loans except borrowings stated in Para 3.6 below.

3.2 Term Loans from financial institutions/banks of Rs.237.50 Lacs (Previous Year Rs.286.86 Lacs) represents balance amount payable in respect of settlements with these institutions/banks.

3.3 Interest bearing portion of restructured debts of Rs.6325.62 Lacs (Previous Year Rs.6781.01 Lacs) due to institutions/banks is payable starting from financial year 2010-11 and shall be fully payable by 31 st March, 2018.

3.4 Interest free portion of restructured debts of Rs.5559.76 Lacs (Previous Year Rs.5952.94 Lacs) due to institutions/banks shall be due for payment in the financial years starting 2016-1 7 and shall be fully payable by 31st March 2018. The debt will be interest bearing from the financial year 2015-16.

3.5 Non-convertible debentures/Term loans/restructured debts, are secured by a first charge created by way of joint equitable mortgage on pari - passu basis on all immovable and movable properties both present and future except borrowings stated in Para 3.6 below.

3.6 Other loans of Rs. 28.40 lacs (Previous year Rs.37.77 lacs) are secured by hypothecation of specific assets purchased under the hire purchase scheme.

4. Unsecured Loans

4.1 During the year, the scheme of arrangement and compromise with the fixed deposit holders filed by the company under section 391 of Companies Act, 1956, has been approved by the Honble High Court of Himachal Pradesh at Shimla. Pursuant to the approved scheme, the company has allotted Equity Shares of Rs. 21- each, at a price of Rs. 11.32 per share, determined under SEBI (DIP) Guidelines, to the fixed deposit holders equivalent to 75% of the principal amountdue. The balance 25% of the principal amount, as per the approved scheme, has been waived off and is shown as extraordinary items in the profit and loss account. As per the approved scheme, the interest on fixed deposits has been waived off.

4.2 Short term loans from others represent loans and inter corporate deposits from friends, relatives & others.

5. Current liabilities

Based on the information available with the Company, no amount is payable to Micro & Small Enterprises as defined under the MSMED Act, 2006. Further, no interest during the year has been paid or payable under the terms oftheMSMED Act, 2006.

6. Fixed Assets

6.1 During the year, the company has made addition to fixed assets of Rs. 438.79 lacs (Previous year Rs.163.02 lacs). Additions to fixed assets put to use have been capitalized. Depreciation on fixed assets is provided from the subsequent month after the asset is put to use. Fixed assets installed and put to use have been certified by the management.

6.2 Leasehold land is not amortised in view of para 1(c) of Accounting Standard on Leases (AS-19) issued by The Institute of Chartered Accountants of India defining scope of the standard.

7. Investments

The fall in value of investments, in unquoted shares and in respect of losses in subsidiary companies, has not been provided, as this, in view of managements perception, is temporary.

8. Inventories

The i nventory of stocks, stores and spares has been taken, valued and certified by the management.

9. Bank Balances

Bank balances of Rs. 28.52 lacs (Previous year Rs. 76.33 lacs) in deposit accounts are pledged as margin money.

10. Miscellaneous expenditure

The miscellaneous expenditure of Rs. 142.38 Lacs (Previous Year Rs. 139.38 lacs) includes Rs. 104.22 Lacs in respect of capital issue expenses remaining un-adjusted and Rs 38.16 lacs towards marketing expenses benefits of which are expected over a period of five years.

11. In the opinion of directors, the current assets, loans and advances are of the value stated except otherwise stated in the accounts, if realized in the ordinary course of business and the provision for depreciation and for all known liabilities is adequate and considered reasonable.

12. Balances of sundry creditors, secured and unsecured loans, sundry debtors, bank balances, loans and advances and security deposits are subject to confirmation.

13. During the year an amount of Rs. 11.24 Lacs was deposited in Investor Education and Protection Fund.

14. The application for compounding of various offences under provisions of the Companies Act, 1956 is pending with the Central Govt.

II. CONTINGENT LIABILITIES

(Rs. in lacs)

As at As at 31st March 2010 31st March 2009

Bank Guarantees 28.52 76.33

Pending settlement with banks/ institutions/Fixed Deposits- Nil 8004.48 Interest not provided

Accumulated dividend on preference shares 3.26 2.10

Claim againstthe Company not acknowledged as debt 338.51 359.98

Liability, if any, arising out of legal cases filed against Amount not Amount not the company by parties. ascertainable ascertainable

Note:-

a. The above remuneration paid to managerial persons is subject to approval from the Central Govt, under Section II (A) (ii) of Part II of Schedule XIII of the Companies Act, 1956. The remuneration paid is lower than minimum as allowed underthe Act.

b. Remuneration paid to directors during the years ending 31.03.2006 to 31.03.2009 amounting to Rs. 153.33 lacs is subject to approval from Central Govt.

c. In view of losses during the year, the managing director has been paid a salary of Rs. 12.75 lacs, out of approved salary of Rs. 60.20 lacs. Balance salary of Rs. 47.45 lacs has been forgone by him and hence not provided in the accounts.

2. Remuneration to auditors

3. Extraordinary items of Rs. 3385.77 Lacs represents liability waived off in respect of fixed deposit holders pursuant to approved scheme of compromise and arrangement with fixed deposit holders.

6. Taxation

No Provision for current Income tax has been made in view of loss during the year.

7. Expenses include Rs. 32.05 lacs (Previous Year Rs. 25.93 lacs) as expenses (net) relating to earlier years.

8. Sales Tax assessments for earlier years are in progress. Demand, if any, shall be accounted for, on the completion of assessments.

9. Dividend

No dividend is provided on equity/preference share capital in view of loss during the year.

10. Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout.

11. Segment Reporting

As the Companys business activity falls within a single primary business segment viz. "Pharmaceuticals" the disclosure requirements of Accounting Standards (AS-17) "Segment Reporting", issued by The Institute of Chartered Accountants of India are not applicable.

13. Deferred Tax Liability/ (Asset)

As required by Accounting Standard "Accounting for taxes on income" i.e. (AS-22) issued by the Institute of Chartered Accountants of India, deferred tax asset on losses during the year, is not recognized as a matter of prudence.

14. Impairment

It is the view of management that there are no impairment conditions that exist as on 31 st March, 2010. Hence, no provision is required in the accounts for the year under review.

15. Related party disclosures

Disclosure as required by accounting standard "Related Party Disclosures" (AS-18) issued by the institute of Chartered Accountants of India are given here under:

* Production of Drugs & Drug Intermediates is net of Captive Consumption of 21.452 MT (Previous Year 9.572 MT)

** Inclusive of free samples & free of cost quantity distributed i.e. 129.91 Nos/Lacs(Previous year 64.69 Nos/Lacs)

*** Inclusive of free of cost quantity i.e. 18922 Nos/Units(Previous year 7385 Nos/Units) (Quantitative details and installed capacity are as certified by management)

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