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Kimia Biosciences Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

''The Company has recognised deferred tax assets on unabsorbed depreciation and carried forward tax losses. The Company has unabsorbed depreciations and incurred tax losses in current year and in earlier years. The Company has concluded that the deferred tax assets on unabsorbed depreciations and carried forward tax losses will be recoverable using the estimated future taxable income based on the business plans and budgets. The Company is expected to generate taxable income in near future. Unabsorbed depreciation can be carried forward for infinite period and tax losses can be carried forward for specific period as per tax regulations and the Company expects to recover the same within prescribed period.

D. Rights, Preferences and Restrictions :

(a) Equity shares

The Company has only one class of equity share having a par value of ? 1 each (Previous year ? 1 each). Each shareholder is eligible for one vote for every share held and is entitled to dividend declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

(b) Redeemable non-convertible cumulative preference shares

Each preference share holder is eligible for dividend, in case dividend is declared by the company on other class of shares. Preference shares shall rank senior to all present and future preference shares and/or equity shares issued by the Company. 40,00,000 preference shares shall be redeemed at the option of the Company, at any time within a period not exceeding ten years from the date of allotment on May 17, 2016 and balance 40,00,000 preference shares shall be redeemed not exceeding ten years from the date of allotment on October 07, 2019.

(c) In FY 2019-20, the Company has issued 40,00,000, 0.1% redeemable non-convertible cumulative preference shares of? 10 each fully paid up upon conversion of loan.

In FY 2020-21, the Company has converted 9,58,790 compulsory convertible preference shares into 9,58,790 equity share. After conversion, each holder of equity shares have the same rights as defined in (a) above.

A. Secured Loans

a. Term loan of ? Lakhs ? 119.55 (Previous year ? 198.49 Lakhs) availed from HDFC Bank Limited which is repayble in 56 monthly installments begining from January, 2022 at interest rate @ 9.25% per annum.

b. Term Loan of ? 244.68 Lakhs (Previous year ? 320.60) availed from HDFC Bank Limited which is repayable in 65 monthly installments begining from August, 2022 at interest rate @ 9.22% per annum.

c. Term loans from HDFC Bank Limited are secured by equitable mortgage over the lands ("immovable properties") situated at Bhondsi Village, District- Gurugram, Haryana., and first charge over the entire plant and equipment of the Company and also by way of personal guarantee of Managing Director.

d. Car loans from HDFC bank Limited are secured by hypothecation of cars purchased there under and carries interest rate of ranging 7.00% to 8.30% (previous year 7.70% to 8.30%) per annum which are repayable in 60 monthly instalments beginning from date of respective loan.

B. Unsecured Loans

i. Loans from compaines carries interest rate 8% to 9.50% per annum (Previous Year : 8% to 9.5% per annum) per annum. Principle repayment schedule has been extended to March 2026 during the previous year.

ii. Loan from directors carries interest at 6% per annum (Previous Year : 6% per annum). Principle repayment schedule has been extended to March 2026 during the previous year.

(i) Above loans are secured by way of equitable mortgage over the lands ("immovable properties") situated at Bhondsi Village, District-Gurugram, Haryana and interests therein, first charge over the current and future inventories, book debts of the company. and also by way of personal guarantee of Managing Director.

(ii) The Company has submitted its quarterly returns and statements online via the Banker''s portal. However, it has not been able to extract the corresponding correspondence for these submissions. As a result, the necessary disclosures related to the variance between the quarterly returns/statements submitted and the books of accounts could not be provided.

38 Employee benefits

A. Defined Contribution Plans

Provident and other Funds : During the year, the Company has recognised ? 53.53 Lakhs (previous year ? 59.52 Lakhs) as contribution to Employee Provident and other Funds in the Statment of Profit and Loss.

B. Defined Benefit Plans - Gratuity

Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15 days of the monthly emoluments for every completed year of service subject to maximum of ? 20 Lakhs at the time of separation from the company.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31, 2025. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

a. The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

b. Sensitivities due to mortality and withdrawals are insignificant, hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

c. Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

(ix) Weighted average duration (in years) 17.10 16.41

(x) Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such the Company is exposed to various risks as follow -

A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.

B) Discount Rate - Reduction in discount rate in subsequent valuations can increase the planâs liability.

C) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumption in the valuation can impact the liabilities.

D) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.

39 Segment Reporting

(a) According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz. âPharmaceuticalsâ and substantially sale of the product is within the country. Hence, the disclosure requirement of Ind AS 108 of âSegment Reportingâ is not considered applicable. The secondary segment is geographical, information related to which is given as under:

The management assessed that cash and cash equivalents, other bank balances, trade and other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

B) Fair value hierarchy

The fair value of financial instruments as referred to in note (A) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1] measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:-

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

a) Financial assets and liabilities measured at fair value - recurring fair value measurements

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

b) Valuation process and technique used to determine fair value

The fair value of investments in quoted equity shares and mutual funds are based on the current bid price of respective investment as at the balance sheet date.

In case of preference shares, the Company has used valuation report of external valuer. Valuation was derived using discounted cash flow method which was based on present value of the expected future economic benefit.

42 Financial risk management objectives and policies Risk Management Framework

The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established the processes to ensure that executive management controls risks through the mechanism of property defined framework.

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed by the board annually to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities. The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely in domestic market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes market check, industry feedback, past financials and external ratings, if they are available. Sale limits are established for each customer and reviewed periodically.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

In monitoring customer credit risk, customers are reviewed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties. The ageing analysis of the trade receivables has been considered from the date the invoice:

During the year, the Company has made write-offs ? NIL (Previous year ? NIL Lakhs ) of trade receivables, it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off. The Company management also pursue all legal option for recovery of dues wherever necessary based on its internal assessment.

42 Financial risk management objectives and policies Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. This is generally carried out in accordance with practice and limits set by the Company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the entity operates. In addition, the Companyâs liquidity management strategy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Financing Arrangement

The cash credit facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in Indian rupee and have an average maturity within a year.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include trade payables, trade receivables, borrowings, etc.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations with floating interest rates.

The Company is exposed to interest rate risk because Company borrows funds at both floating interest rates. These exposures are reviewed by appropriate levels of management. The Company regularly monitors the market rate of interest to mitigate the risk exposure. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to foriegn currency risk primerly related to raw purchase purchases. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).

Commodity price risk

Commodity price risk for the Company is mainly related to fluctuations in chemical prices linked to various external factors, which can affect the production cost of the Company. Since, the Production costs is one of the primary costs drivers, any adverse fluctuation in chemical prices can lead to drop in operating margin. To manage this risk, the Company places orders, identifying new sources of supply etc. There are no derivatives available for requisite chemicals, in the absence, has to be procured at spot prices. Additionally, processes and policies related to such risks are reviewed and controlled by senior management and requirement are monitored by the procurement team.

43 Capital Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Companyâs capital management is to maximize the shareholder value. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2025 and March 31, 2024.

For the purpose of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings less cash and cash equivevelents. The Company monitors capital using gearing ratio, which is net debt divided by total capital as under:

45 Recognition of In house Reserch & Development Facility and Expenses incurred:

The Company has set up state of art Reserch & Development centre with the Registered Office Primises but in a separate building/unit at Village: Bhondsi, Tehsil: Sohna, District : Gurgaon, Haryana for development of new Product/processes, improvement in existing product process for cost reduction & to develop new APIs. The same set up was establised in 2014-15 at Bhiwadi and subsequently shifted in late 2016 to Gurgaon. The said Facility is duly recognised & approved by Department of Scientific and Industrial Research (DSIR) vide Registration No. TU/IV-RD/4410/2018 dated 22/01/2019. The Company has maintained separate accounts for its R&D Facility and proper record have been maintained as per the Income Tax Rules & as prescribed by DSIR in this regard.

Details of Capital and Revenue expenditure incurred during the year are given below and the same are grouped with respective heads of accounts in Note 3 to 4 and Note 27 to 34 to financial statements.

46 Leases

As a Lessee

(i) The Company recognizes the expenses of short-term leases on a straight-line basis over the lease term. During the year, expenses of? 0.00 Lakhs (previous year ? 37.51 Lakhs) related to short-term and low value leases were recognised.

(ii) There are no income from subleasing right-of-use assets nor any gains or losses from sales and leaseback for the year ended March 31, 2025 and March 31, 2024.

(iii) There are no variable lease payments for the year ended March 31,2025 and March 31,2024.

(iv) Total cash flow on right to use assets during the year: ? 16.20 Lakhs (Previous year: 1.01)

47 Disclosure under Ind AS 115

(i) Break-up of revenue from operations:

a) Disaggregation of revenue based on major products:

The Company presented disaggregated revenue based on the geographical location of the customers. Revenue is recognised for goods transferred at a point of time. The Company believes that the revenue disaggregation best depicts point in time. The disaggregation of the Company''s revenue from contracts with customers is as under:

d) Performance obligations

Sale of products - Revenue from sale of goods is recognised on transfer of goods for a price or all significant risks and rewards of ownership to the buyer which is generally on dispatch of goods from the company in accordance with the terms of sale except where such terms provide otherwise, whereas sales are recognised based on such terms. Gross sales are net of sales return.

(d) Contract liabilities include amount received from customers as per the terms of purchase/sales order to deliver goods. Once the goods are completed and control is transferred to customers the same is adjusted accordingly.

(e) Advance received from customers are on account of the upfront revenue received from customer for which performance obligation has not yet been completed.

b Details of Benami Property held:

The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property. c Willful Defaulter:

The Company has not been declared as Willful Defaulter by any Bank or Financial Institution or other Lender. d Relationship with Struck off Companies :

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current and previous year. e Compliance with number of layers of companies:

The Company has no subsidiary therefore compliance u/s (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 related to the number of layers is not applicable to the Company. Rules, 2017.

f Utilisation of Borrowed funds and share premium:

During the financial year ended March 31, 2025 and March 31, 2024, other than the transactions undertaken in the normal course of business and in accordance with extant regulatory guidelines as applicable.

(i) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested during the year (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ) during the year, with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate

(ii) ^BN^eoⁿf^eu^fin^cdⁱs^ar(^iew^sh^. ich are material either individually or in the aggregate) have been received during the year by the Company from any person or entity, including foreign entity (âFunding Partiesâ) during the year, with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g Undisclosed Income:

The Company does not have any transaction, not recorded in the books of accounts that has been surrendered or disclosed as income during the year and in previous year in the tax assessments under the Income Tax Act, 1961 .

h Details of Crypto Currency or Virtual Currency:

The Company have not traded or invested in crypto currency or virtual currency during the year ended March 31, 20245and March i Registration of charges or satisfaction with Registrar of Companies (ROC)

The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. j Scheme of arrangement

The Company has not entered into any scheme of arrangement which has an accounting impact on current financial year. k Core Investment Company (CIC)

The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Based on the information and explanations provided by the management of the Company, the Group has no CICs as part of the Group.

In the financial years 2021-22 and 2022-23, a provision for Corporate Social Responsibility (CSR) amounting to ?0.97 lakh and ?6.89 lakh respectively was inadvertently created, despite the company incurring losses in both years and thus not being liable to make such provisions under the applicable CSR regulations.

During the current financial year, a total amount of ?7.86 lakh has been reversed and rectified in the books of accounts to correct the earlier error. This adjustment ensures compliance with CSR requirements as per the Companies Act, 2013.

Mar 31, 2024

D. Rights, Preferences and Restrictions :

(a) Equity shares

(b) Redeemable non-convertible cumulative preference shares

(c) In FY 2019-20, the Company has issued 40,00,000, 0.1% redeemable non-convertible cumulative preference shares of ? 10 each fully paid up upon conversion of loan.

A. Secured Loans

a. Term loan of ? 198.49 Lakhs (Previous year ? 270.21 Lakhs) availed from HDFC Bank Limited which is repayble in 56 monthly installments begining from January, 2022 at interest rate @ 9.25% per annum.

b. GECL term loan ? 34.11 Lakhs (Previous year ? 92.92 lakhs) taken from HDFC Bank Limited which is repayable in 35 monthly installments begining from December, 2021 with interest rate of 9.25% p.a.

c. Term Loan of ? 320.60 Lakhs (Previous year ? 389.53) availed from HDFC Bank Limited which is repayable in 65 monthly installments begining from August, 2022 at interest rate @ 9.22% per annum.

d. Term loans from HDFC Bank Limited are secured by equitable mortgage over the lands ("immovable properties") situated at Bhondsi Village, District- Gurugram, Haryana., and first charge over the entire plant and equipment of the Company and also by way of personal guarantee of Managing Director.

e. Car loans from HDFC bank Limited are secured by hypothecation of cars purchased there under and carries interest rate of ranging 7.00% to 8.30% (previous year 7.70% to 8.30%) per annum which are repayable in 60 monthly instalments beginning from date of respective loan.

B. Unsecured Loans

i. Loans from compaines carries interest rate 8% to 9.50% per annum (Previous Year : 8% to 9.5% per annum) per annum. Principle repayment schedule has been extended to March 2025 during the previous year.

ii. Loan from directors carries interest at 6% per annum (Previous Year : 6% per annum). Principle repayment schedule has been extended to March 2025 during the previous year.

The Company is primarily in the business of sale of Pharamaceutical products i.e. APIs. All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery. The Company evaluates credit limits for the trade receivables on case to case basis and does not allow significant credit period resulting in no significant financing component.

38 Employee benefits

A. Defined Contribution Plans

Provident and other Funds : During the year, the Company has recognised ? 59.52 Lakhs (previous year ? 65.57 Lakhs) as contribution to Employee Provident and other Funds in the Statment of Profit and Loss.

B. Defined Benefit Plans - Gratuity

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31,2024. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

c. Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

(x) Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such the Company is exposed to various risks as follow -

A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.

B) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

C) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumption in the valuation can impact the liabilities.

D) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

39 Segment Reporting

(a) According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz. âPharmaceuticalsâ and substantially sale of the product is within the country. Hence, the disclosure requirement of Ind AS 108 of âSegment Reporting'' is not considered applicable. The secondary segment is geographical, information related to which is given as

B) Fair value hierarchy

The categories used are as follows:-

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

a) Financial assets and liabilities measured at fair value - recurring fair value measurements

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost.

b) Valuation process and technique used to determine fair value

The fair value of investments in quoted equity shares and mutual funds are based on the current bid price of respective investment as at the balance sheet date.

42 Financial risk management objectives and policies Risk Management Framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to ensure that executive management controls risks through the mechanism of property defined framework.

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed by the board annually to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s Audit Committee oversees compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities. The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely in domestic market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available. Sale limits are established for each customer and reviewed periodically.

During the year, the Company has made write-offs ? NIL (Previous year ? 11.74 Lakhs ) of trade receivables, it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off. The Company management also pursue all legal option for recovery of dues wherever necessary based on its internal assessment.

42 Financial risk management objectives and policies Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Market risk

Interest rate risk

Foreign currency risk

Commodity price risk

43 Capital Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31,2024 and March 31,2023.

For the purpose of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings less cash and cash equivevelents. The Company monitors capital using gearing ratio, which is net debt divided by total capital as under:

45 Recognition of In house Reserch & Development Facility and Expenses incurred:

46 Leases As a Lessee

(i) The Company recognizes the expenses of short-term leases on a straight-line basis over the lease term. During the year, expenses of ? 37.51 Lakhs (previous year ? 28.46 Lakhs) related to short-term and low value leases were recognised.

(ii) There are no income from subleasing right-of-use assets nor any gains or losses from sales and leaseback for the year ended March 31,2024 and March 31,2023.

(iii) There are no variable lease payments for the year ended March 31, 2024 and March 31, 2023.

(iv) Total cash flow on right to use assets during the year: ? 1.01 Lakhs (Previous year: Nil)

d) Performance obligations

(e) Advance received from customers are on account of the upfront revenue received from customer for which performance obligation has not yet been completed.

b Details of Benami Property held:

The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

c Willful Defaulter:

The Company has not been declared as Willful Defaulter by any Bank or Financial Institution or other Lender. d Relationship with Struck off Companies :

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current and previous year.

e Compliance with number of layers of companies:

f Utilisation of Borrowed funds and share premium:

During the financial year ended March 31, 2024 and March 31, 2023, other than the transactions undertaken in the normal course of business and in accordance with extant regulatory guidelines as applicable.

(ii) No funds (which are material either individually or in the aggregate) have been received during the year by the Company from any person or entity, including foreign entity (âFunding Partiesâ) during the year, with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g Undisclosed Income:

h Details of Crypto Currency or Virtual Currency:

The Company have not traded or invested in crypto currency or virtual currency during the year ended March 31, 2024 and March 31, 2023. i Registration of charges or satisfaction with Registrar of Companies (ROC)

The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. j Scheme of arrangement

The Company has not entered into any scheme of arrangement which has an accounting impact on current financial year. k Core Investment Company (CIC)

a. Unspent amount of Rs. 0.97 Lakhs for the financial year 2022-23 towards Corporate Social Responsibility (âCSRâ) other than ongoing projects requiring to be transferred to a Fund specified in Schedule VII to the Companies Act, 2013 to comply with second proviso to sub-section (5) of Section 135 of the Companies Act, 2013.

b. Unspent CSR amount Rs. 6.89 Lakhs for financial year 2021-22 related to ongoing projects, remained outstanding for transfer to special account to comply with the provision of section 135(6) of the Companies Act, 2013.

Mar 31, 2018

1 Reporting Entity

Laurel Organics Limited referred to as Dthe Company! is domiciled in India. The registered office of the Company is at Village Bhonsdi, Tehsil Sohna, Distt. Gurgaon - 122012, Haryana, India. Equity shares of the Company are listed in India on the Bombay stock exchange.

The Company has own manufacturing of Bulk Drugs-APIs at its plant located at Village Bhondsi, Tehsil Sohna, Distt. Gurgaon-122102, Haryana in accordance with Good Manufacturing Practices (GMP) Standards for pharmaceutical production. The Company has obtained Manufacturing License from the State Drugs Controller-cum-Licensing Authority, Food and Drugs Administration, Haryana on April 7, 2017 in order to manufacture final product Bulk Drugs active Pharmaceutical - (APIs).

The financial statements of the company for the year ended 31st March 2018 were authorized for issue in accordance with a resolution of the directors on May 28, 2018.

Standards issued but not yet effective

On March 28, 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying amendments to Ind AS 21, DThe Effects of Changes in Foreign Exchange Rates'' and Ind AS 115, DRevenue from Contracts with Customers.'' The amendments are applicable to the Company from April 1, 2018.

(a) Amendment to Ind AS 21

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the requirements of the amendment and the effect on the financial statements will be given in due course.

(b) Amendment to Ind AS 115

Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The standard permits two possible methods of transition:

A Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

B Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018. The Company is evaluating the requirements of the amendment and the effect on the financial statements will be given in due course.

C. The Company has concluded that the deferred tax assets on MAT Credit Entitlement will be recoverable using the estimated future taxable income based on the approved business plans and budgets. The Company is expected to generate taxable income in near future. The MAT Credit Entitlement can be carried forward as per local tax regulations and the Company expects to recover the same in due course.

D. The Company has not recognised deferred tax assets on unabsorbed depreciations of Rs. 608.25 and carried forward tax losses of Rs. 625.18, has been carried forward under the Income Tax Act, 1961.

a. Terms, Rights and Restrictions attached to Equity Shares

The Company has only one class of Equity Share having face value of Rs.10 each and each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However same other than interim dividend, is subject to the approval of the shareholders in the Annual General Meeting.

(a) actuarial gains and losses

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)

During the year the Company has issued 26,20,000 (Twenty Six Lakhs and Twenty Thousand) Fully Convertible Warrants (âWarrantsâ) having Face Value of Rs. 10/- each, for cash at an issue price of Rs. 30/- (Rupees Thirty Only) per Warrant (including a premium of Rs. 20/- per Warrant) (âWarrant Issue Priceâ), to the existing equity shareholders (âProposed Warrant Allotteesâ), each convertible into, or exchangeable for, at an option of the Proposed Warrant Allottee, upon the Scheme of arrangement becoming effective and subject to a maximum tenure of eighteen months from the date of their allotment i.e. January 31, 2018, in one or more tranches, Ten Equity Shares of face value of Re.1/- (Rupee One only) each on such terms and conditions as may be determined by the Board. Till March 31, 2018, the Company has called an amount equivalent 25% of the Warrant Issue Price fixed per Warrant and balance 75% shall be payable by the Proposed Warrant Allottee at the time of conversion of the Warrants.

The Company has taken secured borrowings to the tune of Rs. 291.00 in previous years from holding company as per agreement with changes in tenure with Rate of interest 9% p.a. (previous period 9% and 11%) against creation of respective charge on immovable property of the Company.

b. Repayment Schedule

Loans availed from Bodies Corporate and directors are payable on demand after 31st March, 2019.

Note 2.1

a. Terms, Rights and Restrictions attached to Preference Shares

Each preference share holder is eligible for equal amount of dividend, in case dividend is declared by the company on other class of shares as proposed by the Board of Directors which is subject to the approval of the shareholders in the ensuing Annual General Meeting. Preference Shares shall rank senior to all present and future preference shares and/or equity shares issued by the Company. At the option of the issuer, at any time within a period not exceeding ten years from the date of allotment on 17.05.2016 as per the provisions of the Act.

b. The Company has issued all RPS to M/s Utsav Securities Pvt. Ltd. in previous year 2016-17.

3. Leases

Operating lease

The Companyâs significant leasing arrangements are in respect of operating leases of premises for offices and guesthouses. These leasing arrangements, which are cancellable, are typically for a period of 11 months and are usually renewable on mutually agreeable terms. The Company has recognised expense amounting to Rs. 18.78 (Previous year Rs. Nil)

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. During the year the Company has contributed to Government Provident Fund Rs. 14.71 (Previous year Rs. 3.01).

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31, 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at balance sheet date:

E Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Sensitivities due to mortality and withdrawals are insignificant, hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

F. Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follow -

A) Salary Increases- Actual salary increases will increase the Planâs liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Discount Rate: Reduction in discount rate in subsequent valuations can increase the planâs liability.

The management considers that the carrying amount of financial assets and financial liabilities carried as amortised cost approximates their fair value.

II. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

ii. Credit risk

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely both in domestic and export market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

The Company Management has established policy under which each new customer is analyzed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes market check, industry feedback and past financials, if they are available.

The Company has started manufacturing facility in current year. The company is dealing with the customers having good credit worthiness, and no impairment loss has been recognized against these customers. In monitoring customer credit risk, customers are reviewed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.

A default on a financial asset is when counterparty fails to make payments within 90 days when they fall due.

iii. Liquidity risk

Management monitors rolling forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. This is generally carried out at corproate office of the Company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the entity operates. In addition, the Companyâs liquidity management strategy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(a) Financing arrangements

During the year, the banker of the Company has sanctioned total working capital exposure of Rs. 600 (approx). which is subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in indian rupee and have an average maturity within a year. The banker of the Company has also sanctioned term loan and other facilities of Rs. 1365 (approx).

(b) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and exclude contractual interest payments and the impact of netting agreements.

The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity.

The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates -will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company uses derivatives like forward contracts to manage market risks on account of foreign exchange and various debt instruments on account of interest rates. All such transactions are carried out within the guidelines set by the Risk Management Committee. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.

v. Currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Companyâs functional currency ("Rs."). The risk is measured through a forecast of highly probable foreign currency cash flows.

The Currency risks related to the principal amounts of the Companyâs foreign currency receivables and payables, the Companyâs policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Exposure to currency risk

Interest rate risk

In view of pending amalgamation (Refer Note-39), interest on unsecured borrowings received from holding company and others have not been accounted in the books.

The Companyâs interest rate risk arises from borrowings with fixed rates, which does not expose to cash flow interest rate risk.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

4. First Time Adoption of Ind AS

As stated in note 2, these are the Companyâs first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS statement of financial position at April 1, 2016 (the Companyâs date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

i. Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

ii. Lease

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contact or arrangement. Ind AS 101 provide an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected this exemption for such contracts / arrangements.

A. Ind AS mandatory exceptions

i. Estimates

An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

ii. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

C. Notes to first-time adoption:

1. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these remeasurements were forming part of the statement of profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs. 1.95 (Net of tax Rs. 1.31) There is no impact on the total equity as at 31 March 2017.

2. Deferred Tax

Under previous GAAP, deferred tax was prepared using income statement approach. Under Ind AS, company has prepared deferred tax using balance sheet approach. Also, deferred tax have been recognised on the adjustments made on transition to Ind AS.

3. Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

4. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in the statement of profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans and tax thereon. The concept of other comprehensive income did not exist under previous GAAP.

5. Redeemable Preference shares

Redeemable Preference shares have been discounted using 6.67% (with firmware data 6.48%) rate of interest. Present value of redeemable Preference shares has been unwinded over the period of preference shares and interest expenses has been booked.

5. Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.

6. Segment Reporting

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz.

âPharmaceuticalsâ and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence, the disclosure requirement of Ind AS 108 of âSegment Reportingâ is not considered applicable.

7. The Board of Directors of the Company has approved a Scheme of Arrangement between the Company and the Holding Company, Kimia Biosciences Ltd. (Transferor Company) and their respective shareholders (âthe Schemeâ) for the amalgamation under section 391 to 394 of the Companies Act, 1956 or any corresponding provisions of the Companies Act, 2013 with effect from appointed date i.e. 1st April 2016. The Scheme has been filed before National Company Law Tribunal for necessary approval . The Scheme will be made effective by the Board of Directors of the Company upon receipt of the approvals from the National Company Law Tribunal. Pending approval of the scheme, no accounting treatment under Ind AS 103 ("Business Combination") has been given.

8. In view of pending approval of proposed amalgamation as refer note 39, interest on unsecured borrowings received from M/s Kimia Bioscience Ltd. (Holding and Transferor Company) Rs 114.53 (previous Rs 40.11) has not been accounted for.

9. Capital management

The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The following table summarises the capital of the Company :

10. Previous year''s figures have been regrouped/ recasted wherever necessary to conform to the current year''s Classification.

Mar 31, 2014

1. GENERAL NOTES:

i) Contingent Liabilities not acknowledged as debts and provided for:

Labour cases: In four labour cases compensation claimed amounting to Rs.2.25 lacs approx. have not been acknowledged and provided for. (Previous year Rs.2.25lacs).

PF/ESIC: Company may contingently be liable for Interest/damages on delayed deposit/ payment of P.F./E.S.I.C., not claimed/ quantified yet, hence not acknowledged/provided for.

Electricity demand: DHBVN Ltd., state owned electricity company, supplying power to the company has demanded a sum of Rs.17.98 lacs as charges for slow running of meter. Company has provided unbilled amount included in the said amount of Rs.5.35 lacs. However, company has filed a petition against the unlawful demand raised by DHBVNL before the Hon''ble Civil Courts at Gurgaon. The Hon''ble court has directed to pay 50% of demand so raised and accepted the company''s petition. Amount so paid as 50% Rs.8.89 lacs in protest has been accounted for under short term advances. Company may be held liable for the demand so raised on final order from the courts, hence acknowledged it at contingent liability.

ii) Disclosure relating to Share Capital:

Rights, Preferences and Restrictions attached to the Equity Shares:

The company has only one class of shares referred to as equity shares having at par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The dividend, if any, to be proposed by the Board of Directors is subject to approval of the shareholders in Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Nil equity shares have been allotted as fully paid up without payment being received in cash during the period of five years immediately preceding the date as at which the Balance Sheet is prepared. However, company had issued 885000 equity shares of Rs. 10 each at par in part payment of dues to IDBI in accordance with final OTS sanctioned. Though, the allotment was made in partial modification of Sanctioned Rehabilitation Scheme by BIFR, sanction to such modification to the approved scheme from BIFR could not be obtained by IDBI, the monitoring agency, in time. Therefore, the Company had approached Hon''ble BIFR for ratification of issue of the said equity shares. Now, the BIFR has approved/ratified issuance of such shares, for which necessary documents are filed with Bombay stock exchange by the company for listing.

iii) Company had been advanced by M/s Ranbaxy Lab. Ltd. to the tune of Rs.395/- lacs in earlier years to meet its obligation of OTS reached with the IDBI and UBI, repayable in 60 monthly (further rescheduled) installments with interest @13.5% p.a. Now, the entire loan liability has been repaid to M/s Ranbaxy Lab. Ltd. during the year.

iv) a) Trade advances amounting to Rs.11.20 lacs which were considered doubtful of recovery and, therefore, was fully provided for in previous years, could not be recovered despite continuous efforts put in by the company for last many yrs., has been written off during the year .

v ) In the opinion of the management the realizable value of non-current and current assets, loans & advances in the ordinary course of business would be, at least, equal to the amount at which they are stated in the balance sheet.

vi) Trade Payables and Trade receivable balances are subject to reconciliation and confirmation from the parties concerned. Trade payables due for payment for more than a year amounting to Rs. 13.99 lacs, considered payable accounted for under other long term liabilities.

vii) As per AS-22 issued by ICAI, deferred tax asset and liability has been recognized and necessary effect were given in profit & loss account during the year. Detail break-up of accumulated deferred tax assets and liability after adjustment as on 31.03.2014 is given in Note No.4.

viii) Particulars of the consumption of Materials:

Company has manufactured goods for a leading pharmaceutical Company M/s Ranbaxy Laboratory Limited (RLL) on Job charges basis in majority. Raw materials supplied by the principal manufacturer as per requirements of products manufactured were received on excise invoices as stock transfers or otherwise as well and finished goods manufactured by the company were again transferred/ dispatched back on excise invoices as stock transfers as well, hence not forming part of company''s own manufacturing and , therefore, details of raw materials consumed and goods manufactured etc. were not pertaining to the company directly hence not given herein below to the extent. However, small quantities manufactured on own account for which cost of direct raw materials consumed is given below. In addition, the raw materials/items consumed for carrying out the direct job manufacturing activity by the company out of its own stock were mainly of consumable in nature and, therefore, had been billed as deemed sales to the principal Company on cost basis

ix) During the year company has carried its operation based on a manufacturing Contract for five years with M/s Ranbaxy Laboratories Ltd., executed in 2008 and extended on 01/01/2013 for further period of five years there from for manufacturing Bulk Drug intermediates as per their specification and requirements. Accordingly, revenue for the year has been accounted for on a/ c of the qty. manufactured/dispatched on per kg basis.

x) Sales include a sum of Rs.40.86 lacs for the goods manufactured & sold on company''s own account. Which further include Deemed Sales amounting to Rs. 41.15 lacs, comprising of Rs. 38.65 lacs on account of sale of saleable by products i.e. recovered non-usable solvents & Rs.2.50 lacs of reimbursements and bills raised for use of consumables and indirect raw materials in job manufacturing processes for the principal manufacturer during the year on cost basis and on which CST/VAT has been charged & paid and the same has been treated in accounts accordingly. Procurement cost of materials has been shown under Note-23.

xi) Company has accounted for deemed sales, opening and closing stock except the petroleum products and purchases net of sales tax/vat component thereon, which was kept in separate account head and from where input vat available was adjusted and balance liability was paid.

xii) Company has capitalized Plant and machinery amounting to Rs.45.19 lacs (including installation cost) during the year.

xiii) Travelling, conveyance and vehicle running expenses include Rs.5.20 lacs (Previous Year Rs. 4.92 lacs) spent by the directors for business trips undertaken by them.

xiv) Company has provided for bonus @8.33% for all employees of the Company covered under the provisions of the Payment of Bonus Act. Accordingly an amount of Rs.6.12 lacs has been provided during the year in revenue account.

xv) Interest on outstanding inter corporate deposits of Rs. 29.00 lacs have not been provided in view of the continuing understanding for waiver of interest with ICD lenders.

xvi) Funds provided/arranged for during earlier years by the Directors and/or companies in which directors are interested amounting to Rs.2.96 lacs have been shown as unsecured long term liability not bearing interest in view of an understanding to this effect with the respective parties.

xvii) Repairs & maintenance expense of Plant and Machinery amounting to Rs. 41.01 lacs as per Note No.-23 include cost of repairs, replacement of partial worn out assets and cost incurred for minor modifications of revenue nature.

xviii) Laboratory Expenses amounting to Rs.27.28 lacs as per Note No.-23 include HPLC /GC spares/column and accessories of Rs. 11.75 lacs and reagents/solvents/consumable of Rs.15.53 lacs, which are consumed for carrying out lab testing of products and raw materials.

xix) Company has taken insurance cover for fire on building, plant & machinery, inventories of the company as well as against Public Liability amounting to Rs.1433- lacs & 1500-lacs respectively. Adequacy of risk cover is justified by the management on the basis of risk assessment carried out by them based on internal inputs made available in the matter. Insurance cover towards inventory of raw materials, work-in-progress and finished goods etc. belonging to the principal manufacturer i.e. M/s Ranbaxy Lab Ltd., were taken by them, for which no risk and responsibility lies on the company.

xx) The works of the company were covered by ESIC with effect from June''08. All the workers having salary within the limit of ESIC are covered under ESIC scheme and the company has complied with the provisions of the ESIC Act regularly. Contribution payable for the period from June,08 to Feb.''09 not paid/provided earlier, as intimation from department regarding coverage for the period was received and registration was granted in March,09 only and towards which liability was provided during earlier years, paid Rs.2.0 lacs in previous year. Balance liability amounting to Rs. 2.61 lacs is paid during the year.

xxi) A sum of Rs.41.91 lacs is outstanding liability towards the Statutory dues as at the close of the financial year. The said amount include Excise duty 21.72 lacs (now paid off) P.F. payable Rs.6.96 lacs, ESIC Rs.7.77 lacs, TDS Rs.4.68 lacs. As per practice, all these current statutory dues are paid within the time allowed under the relevant laws and/or the Income Tax Act,1961.

xxiii) Income/Expenditure in Foreign Currency: -Nil- (P.Y. -Nil-)

xxiv) Auditors Remuneration :

Legal & Professional expenses includes Auditors'' Remuneration amounting to Rs.1.69 lacs to Statutory Auditors and Rs,.0.40 lacs towards cost & internal Auditors.

xxv) Information regarding primary segment reporting as per AS-17 for the year ended 31/03/2014:

The Company is engaged in the primary business segment of Bulk drug and drug intermediate manufacturing on job charges basis only Hence, there is single segment assets and liabilities only. There was no geographical segment.

xxvii) The company has not received intimation from suppliers regarding their status under the micro, small and medium enterprises and hence disclosure, if any, relating to balance outstanding including interest thereon, if any, as at the Balance Sheet date could not be ascertained, hence has not been furnished. Company has undertaken steps to prepare a panel of such suppliers and seek all the relevant information, so as to classify and monitor relevant information in future.

xxviii) A sum of Rs.38.89 lacs is receivable on account of TDS deducted on Job charges from the Income Tax department for the F.Y. 2011- 12, 2012-13 & 2013-14. Income tax returns for the year 11-12 & 12-13 have already filled within time and refunds are under process. However, TDS for 13-14 would be refundable/claimed from the Department on filing of ITR for the year concerned.

xxix) Cenvat/Service Tax Input credit taken paid on input cost/services availed against goods manufactured & under reverse charge. A sum of Rs.5.47 lacs is still lying in credit to be adjustable against the payables/liability in coming period.

xxx) Related Party disclosure:

List of related parties with whom transactions have taken place during the year:

1. Related Parties where common control exists: Bijwasan Agro Ltd.

Agora Agro Pvt. Ltd.

2. Key Management Personnel:

Mr. K S Varma, CMD

Mr. Abhishek S Varma, Whole time Director

Mrs. Vandana Varma, Whole time Director

xxxi) The revised Schedule-VI has been effective from 1st April,2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year figures have been regrouped/re-arranged wherever necessary to correspond with the current year''s classification/disclosure and rounded off to nearest one rupee.

xxxii) Notes 1 to 25 form an integral part of the statement of accounts of the company comprising Balance Sheet as on 31st March''2014 and the Profit & Loss Statement for the year ended on that date.

Mar 31, 2013

I) Contingent Liabilities not acknowledged as debts and provided for:

(a) Labour cases: In four labour cases compensation claimed amounting to Rs.2.25 lacs approx. have not been acknowledged and provided for. (Previous year Rs.2.25lacs).

(b) PF/ESIC: Company may contingently be liable for Interest/damages on delayed deposit/ payment of P.F./E.S.I.C, not claimed/ quantified yet, hence not acknowledged/provided for.

ii) Disclosure relating to Share Capital:

Rights, Preferences and Restrictions attached to the Equity Shares:

The company has only one class of shares referred to as equity shares having at par value of Rs.10 per share. Each holder of equity hares is entitled to one vote per share. The dividend, if any, to be proposed by the Board of Directors is subject to approval of the shareholders in Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Nil equity shares have been allotted as fully paid up without payment being received in cash during the period of five years immediately preceding the date as at which the Balance Sheet is prepared. However, company had issued 885000 equity shares of Rs. 10 each at par in part payment of dues to IDBI in accordance with final OTS sanctioned. Though, the allotment was made in partial modification of Sanctioned Rehabilitation Scheme by BIFR, sanction to such modification to the approved scheme from BIFR could not be obtained by IDBI, the monitoring agency, in time. Therefore, the Company has approached Hon''ble BIFR for ratification of issue of the said equity shares and appropriate orders have been received after close of the year.

iii) Company had been advanced by M/s Ranbaxy Lab. Ltd. to the tune of Rs.395/- lacs in earlier years to meet its obligation of OTS reached with the IDBI and UBI, repayable in 60 monthly installments with interest 013,5% p.a. The agreement was amended during Previous year to the extent that the outstanding amount of Rs.183.28 lacs as on 1st March,2011 was rescheduled to be payable in 36 equal monthly installments thereafter. As per agreement, the advance was secured against assets of the company. However, necessary Charges could not be registered by M/s Ranbaxy Lab. Ltd., hence has been shown as unsecured loan liability.

iv) a) Trade receivables amounting to Rs.37.37 lacs which were considered doubtful of recovery and, therefore, was fully provided for in previous years, could not be recovered despite continuous efforts put in by the company for last many yrs., has been written off during the year.

b) The company is persuading Trade advances amounting to Rs. 11.20 lacs which were considered doubtful of recovery and, therefore, was fully provided for during the year. However, in view of steps taken by management for recovery, the same are not written off during the year.

v) In the opinion of the management the realizable value of non-current and current assets, loans & advances in the ordinary course of business would be, at least, equal to the amount at which they are stated in the balance sheet.

vi) Trade Payables and Trade receivable balances are subject to reconciliation and confirmation from the parties concerned.

vii) As per AS-22 issued by ICAI, deferred tax asset and liability has been recognized and necessary effect were given in profit & loss account during the year. Detail break-up of accumulated deferred tax assets and liability after adjustment as on 31.03.2013 is given in Note No.4.

viii) Particulars of the consumption of Materials:

Company has manufactured goods for a leading pharmaceutical Company M/s Ranbaxy Laboratory Limited (RLL) on Job charges basis, hence no direct raw materials were consumed. Raw materials supplied by the principal manufacturer as per requirements of products manufactured were received on excise invoices as stock transfers or otherwise as well and finished goods manufactured by the company were again transferred/ dispatched back on excise invoices as stock transfers as well, hence not forming part of company''s own manufacturing and , therefore, details of raw materials consumed and goods manufactured etc. were not pertaining to the company directly, hence not given herein below. The raw materials/items consumed for carrying out the direct job manufacturing activity by the company out of its own stock were mainly of consumable in nature and, therefore, had been billed as deemed sales to the principal Company on cost basis.

ix) During the year company has carried its operation based on a manufacturing Contract for five years with M/s Ranbaxy Laboratories Ltd., executed in 2008 and extended on 01/01/2013 for further period of five years there from for manufacturing Bulk Drug intermediates as per their specification and requirements. Accordingly, revenue for the year has been accounted for on a/c of the qty. manufactured/dispatched on per kg basis. However, charges for new products which, as per agreement to be deliverable in 4-5 months, were provided in previous year on pro-rata basis for the duration these products were partially processed, billed and taken into revenue ii%the current year after adjustment to the extent provision brought forward in accounts.

x) (a) Deemed Sales amounting to Rs. 281.19 lacs, include Rs. 18.39 lacs on account of sale of saleable by products i.e. recovered non-usable solvents & Rs.262.80 lacs of reimbursements and bills raised for use of consumables and indirect raw materials in job manufacturing processes for the principal manufacturer during the year on cost basis and on which CST/VAT has been charged & paid and the same has been treated in accounts accordingly. Procurement cost of materials has been shown under Note-23.

(b) Company has accounted for deemed sales, opening and closing stock except the petroleum products and purchases net of sales tax/vat component thereon, which was kept in separate account head and from where input vat available was adjusted and balance liability was paid.

xi) Company has been supplied materials against excise invoices by the principal manufacturer and after manufacture, finished goods are transferred back to them, after adding all the costs, by way of excise invoices only. Details of both the transactions are maintained in subsidiary excise records. However, impact of all such transactions are not taken for any purpose, except Job Service Charges, into financial statements of the company for the year. Management of the Company has estimated no liability against any loss etc. to the inventory of materials iying at its end and/or towards excise and VAT in the matter based on 3rd party audit implemented by the principle manufacturer.

xii) Company has not considered as policy, revenue on materials lying in process on partial completion basis and goods finished either not tested positive for quality or under testing during the year.

xiii) Company has capitalized Plant and machinery amounting to Rs.87.47 lacs (including installation cost) during the year. Assets, worn out, damaged, non usable, lost in a fire incident during the year worth Rs. 4.54 lacs has been discarded. Loss after adjustment of depreciation amounting to Rs. 2.50 lacs has been charged off to revenue of the year. Insurance claim received against the fire loss amounting to Rs.3.54 lacs has also been taken into revenue of the year.

xiv) Travelling, conveyance and vehicle running expenses include Rs.4.92 lacs (Previous Year Rs. 6.15 lacs) spent by the directors for business trips undertaken by them.

xv) (a) Company has provided for bonus @S.33% for all employees of the Company covered under the provisions of the Payment of Bonus Act. Accordingly an amount of Rs,5.91 lacs has been provided during the year in revenue account.

(b) A sum of Rs.0.30 lacs remained outstanding for earlier years of employees, who had left their job. However, liability is not written back, considering the fact that the concerned employee can demand liability in future as well.

(c) Ex-gratia provision for employees beyond payment of Bonus Act has been made equal to one month''s basic salary.

xvi)) Company''s net worth had been gradually improved from full erosion over the years. The company has, therefore, prepared accounts on going concern basis on the assumption of better performance of industry segment to which the company belong and past performance of the company itself, coupled with the continued support of M/s Ranbaxy Ltd.

xvii) Funds provided/arranged for during earlier years by the Directors and/or companies in which directors are interested amoutfe; -^ to Rs.0.56 lacs have been shown as unsecured long term liability not bearing Interest in view of an understanding to this effect with the respective parties. replacement out assets and cost incurred lor minor modifications of revenue nature necessary for suitability of new products being produced by the company on Job charges basis for M/s Ranbaxy Lab. Ltd amounting to Rs. 1.23 lacs.

xviii) Laboratory Expenses amounting to Rs.34.94 lacs as per Note No.-23 include HPLC /QC spares/column and accessories of Rs. 12.03 lacs and reagents/solvents/consumable of Rs.18.44 lacs, which are consumed for carrying out lab testing of products and raw materials. As the solvents/spent as well as the used spares are considered of no value, hence either drained out or thrown away. Hence, not accounted for.

xix) (a) Company has taken insurance ,-Â¦Â¦>< '' jr fire on building, plant & machinery, Inventories of the company as well as against Public Liability amounting to Rs.1386- iacs & 1500-lacs respectively. Adequacy of risk cover is justified by the management on the basis of risk assessment carried out by them based on internal inputs made available in the matter.

(b) Insurance cover towards Inventory of raw materials, work-in-progress and finished goods etc, belonging to the principal manufacture iÂ«. Us Ranbaxy Lab Ltd., were taken by them, for which no risk and responsibility lies on the company.

(c) Company is producing in the course of manufacturing activity a large quantity of spent/solvent, which was belonging to the principal manufacturer i.e. M/s Ranbaxy Ltd. However, as per revised and extended job work agreement, spent/solvent produced in some specified products, will belong to the company.

(d) Generally, the stock is sold in lots periodically, resulting in huge inventory of such materials in process. Insurance cover, however, on the materials are taken by M/s RLL.

xx) The works of the company were covered by ESiC with effect from June''08. All the workers having salary within the limit of ESIC are covered under ESIC scheme and the company has complied with the provisions of the ESIC Act regularly. Contribution payable for the period from June,08 to Feb.''09 not paid/provided earlier, as intimation from department regarding coverage for the period was received and registration was granted in March,09 only and towards which liability was provided during earlier years, paid Rs.2.0 lacs during the year. Balance liability amounting to Rs. 2.61 lacs is yet to be paid.

xxi) A sum of Rs.13.79 lacs is outstanding liability towards the Statutory dues as at the close of the financial year in addition to the outstanding liability as mentioned in clause (xx) above. The said amount include P.F. payable Rs.6.76 lacs, ESIC Rs.1.18 lacs, TDS Rs.4.29 lacs and Service Tax Rs.1.44 lacs. PF and ESIC dues pertaining to Jan-Mar,2013 period could not be paid as per stipulated time period. Service tax liability has also could not be paid in time. However, TDS are paid within the time allowed under the Income Tax Act,1961.

xxii) Medical allowance Rs. 0.12 lacs brought forwards from earlier years , remaipeS outstanding as the concerned employee have left out, not written back, considering the fact that this could be claimed at any future date.

xxiii) Labour welfare fund contribution liability Rs.0.11 lacs remained outstanding, as the same were required to be paid on every six months period, hence 3 months amount remain outstanding as at the close of the year.

xxiv) Training facility provided to the staff members in the manufacturing facility as well as support facility of the company during the year were financially supported by M/s Ranbaxy Ltd. And all the expenses incurred including remuneration payable to the trainers were paid by them, hence not considered into the revenue a/c of the company.

xxv) Directors'' remuneration increase for last year, kept in abeyance, waiting for Central Government''s sanction, however, allowed during the year Rs. 4.44 lacs, based on the order received that the remuneration proposed was within the provisions of the Schedule XIII, hence paid and accounted for under prior period adjustment a/c. In addition to above, house rent allowance also increased from per month @ Rs.20,000/- to per month @ Rs.35,000/-. Impact of additional amount paid/credited is given in prior period expenses a/c. xxvii) Losses during processing in material consumption and re-processing (in the products where norms agreed) equal to raw material cost were payable to the principal manufacturer by the company, as such a sum of Rs. 4,72,218/- has been provided on this account by charging to the revenue of the year.

xxiv) Accounting Standard (AS-15) on Employee Benefits

(a) Contributions are made to Employees Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees as per provision of these respective Acts. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as an expense in respect of these defined contribution plans are as under:

(c) Employees have been paid encashment towards earned leave exceeding 30 days which is accrued & paid/credited and hence not considered in above long term benefits computation. xxix) Incorre/Expenditure in Foreign Currency: -Nil- (P.Y. -Nil-). xxx) Auditors Remuneration : Legal & Professional expenses includes Auditors'' Remuneration amounting to Rs.1.69 lacs to Statutory Auditors and Rs,.0.40 lacs towards cost & internal Auditors.

xxvii) Company has paid Rs.16.10 lacs to employees as good work reward against working overtime, on which ESIC benefits have been paid by the company.

xxviii) Contract Labor in EHS/ETP employed by the company have been covered under ESIC provision only. PF dues are considered exclusive liability of the contractor on applicability of PF laws, hence direct cover has not been provided to them.

xxix) Unsecured Inter corporate loans Rs.29 lacs, could not be refunded due to cash flow deficiency. Provision of interest has also not been made, as company had assurance for waiver of the same due to its bad financial condition.

xxx) Information regarding primary segment reporting as per AS-17 for the year ended 31/03/2013: The Company is engaged in the primary business segment of Bulk drug and drug intermediate manufacturing on job charges basis only. Hence, there is single segment assets and Liabilities only.

There was no geographical segment.

xxxi) Accounting Standard (AS-20) on Earnings Per Share:

As required by Accounting Standards 20 issued by the Institute of Chartered Accountants of India, the earning per share (EPS) is calculated by dividing the profit attributable to the equity share holders by the average number of equity shares outstanding during the year and is ascertained as follows:

xxxii) The company has not received intimation from suppliers regarding their status under the micro, small and medium enterprises and hence disclosure, if any, relating to balance outstanding including interest thereon, if any, as at the Balance Sheet date could not be ascertained, hence has not been furnished. Company has undertaken steps to prepare a panel of such suppliers and seek all the relevant information, so as to classify and monitor relevant information in future.

xxxiii) Related Party disclosure:

List of related parties with whom transactions have taken place during the year:

1. Related Parties where common control exists: Bijwasan Agro Ltd.

Agora Agro Pvt. Ltd.

2. Key Management Personnel: Mr. K S Varma, CMD

Mr. Abhishek S Varma, Wholetime Director Mrs. Vandana Varma, Wholetime Director

xxxiv) The revised Schedule-VI has been effective from 1st April,2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year figures have been regrouped/re-arranged wherever necessary to correspond with the current year''s classification/disclosure and rounded off to nearest one rupee.

xxxv) Notes 1 to 25 form an integral part of the statement of accounts of the company comprising Balance Sheet as on 31st March''2013 and the Profit & Loss Statement for the year ended on that date.

Mar 31, 2012

I) Vehicle Loans are secured against hypothecation of respective cars. Relevant charges has, however, been created in respected of Loan from Corporation, Bank only.

ii) Satisfaction of charge in respect of one fully repaid car loan during the year is still awaited.

iii) Due to business exigencies and non availability of funds from banks/financial institutions, company has entered with an agreement with the Director of the company to borrow in personal capacity from Private lending institutions for company's business purposes namely Barklays Investment & Loans (I) Ltd. & Fullerton India Credit Ltd. amounting to Rs. 7.50 lacs payable in 36 monthly installments at interest payable @20% p.a. monthly reducing & Rs. 10.00 lacs payable in 48 monthly installments at interest payable @19.93% p.a. monthly reducing respectively. The said amount has been received by the company as unsecured loan during the year through the Director concerned. Company is paying the principal amount with interest as and when the same becoming due.

i) Contingent Liabilities not acknowledged as debts and provided for:

Labour cases: In four labour cases compensation claimed amounting to Rs.2.25 lacs approx. have not been acknowledged and provided for. (Previous year Rs.2.25lacs).

PF/ESIC: Company may contingently be liable for Interest/damages on delayed deposit/ payment of P.F./E.3.I.C., not claimed/ quantified yet, hence not acknowledged/provided for.

ii) Disclosure relating to Share Capital:

Rights, Preferences and Restrictions attached to the Equity Shares:

The company has only one class of shares referred to as equity shares having at par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The dividend, if any, to be proposed by the Board of Directors is subject to approval of the shareholders in Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Nil equity shares have been allotted as fully paid up without payment being received in cash during the period of five years immediately - preceding the date as at which the Balance Sheet is prepared. However, company had issued 885000 equity shares of Rs. 10 each at par in part payment of dues to IDBI in accordance with final OTS sanctioned. Though, the allotment was made in partial modification of Sanctioned Rehabilitation Scheme by BIFR, sanction to such modification to the approved scheme from BIFR could not be obtained by IDBI, the monitoring agency, in time. Therefore, the Company has approached Hon'ble BIFR for ratification of issue of the said equity shares.

iii) Company had been advanced by M/s Ranbaxy Lab. Ltd. to the tune of Rs.395/- lacs in earlier years to meet its obligation of OTS reached with the IDBI and UBI, repayable in 60 monthly installments with interest @13.5% p.a. The agreement was amended during Previous year to the extent that the outstanding amount of Rs.183.28 lacs as on 1st March,2011 was rescheduled to be payable in 36 equal monthly installments thereafter. As per agreement, the advance was secured against assets of the company. However, necessary Charges could not be registered by M/s Ranbaxy Lab. Ltd., hence has been shown as unsecured loan liability.

iv) The company is persuading Trade receivables amounting to Rs.37.37 lacs which were considered doubtful of recovery and, therefore, was fully provided for. However, in view of steps taken by management for recovery, the same are not written off during the year.

v) In the opinion of the management the realizable value of non-current and current assets, loans & advances in the ordinary course of business would be, at least, equal to the amount at which they are stated in the balance sheet.

vi) Trade Payables and Trade receivable balances are subject to reconciliation and confirmation from the parties concerned.

vii) As per AS-22 issued by ICAI, deferred tax asset and liability has been recognized and necessary effect were given in profit & loss account during the year. Detail break-up of accumulated deferred tax assets and liability after adjustment as on 31.03.2012 is given in Note No.4.

viii) Particulars of the consumption of Materials:

Company has manufactured goods for a leadÃig pharmaceutical Company on Job basis, hence no direct raw materials were consumed. The items consumed for carrying out the said activity were mainly of consumable in nature and, therefore, had been billed as deemed sales to the principal Company on cost basis.

ix) During the year company has carried its operations based on a manufacturing Contract for five years with M/s Ranbaxy Laboratories Ltd., executed in 2008 and subsequent amendments for manufacturing Bulk Drug intermediates as per their specification and requirements. Accordingly, revenue for the year has been accounted for on a/c of the qty. manufactured/dispatched on per kg basis. However, charges for new products which, as per agreement to be deliverable in 4-5 months, were provided on pro-rata basis for the duration these products were partially processed. Bills could not be raised for the same as deliverable material not produced till close of the financial year. Further, company has received as sum of Rs.120.96 lacs on account /advance payment, bearing no interest, against the new product processing, which has been shown in other current liabillty-advances from the customers In Note-8.

x) Deemed sales amounting to Rs.210.39 lacs has been booked on account of utilization of consumables & Indirect Raw materials for carrying job manufacturing processes for the principal manufacturer during the year on cost basis and on which CST/VAT has been charged & paid and the same has been treated in accounts accordingly. Procurement cost of materials has been shown under Note- 23.

xi) Company has made full payment of outstanding Sales tax liability during the year which was provided in accounts during earlier year upon withdrawal of exemption to the Company by the Sales Tax Department.

xii) Company has capitalized Plant and machinery amounting to Rs. 67.91 lacs (including installation cost) during the year. Further, Capital Work in Progress amounting to Rs.35.33 lacs is underway. No Asset has been discarded during the year.

xiii) Travelling, conveyance and vehicle running expenses include Rs.6.15 lacs (Previous Year Rs. 4.61 lacs) spent by directors for business trips undertaken by them.

xiv) Company has provided for bonus @8.33% for all employees of the Company. Accordingly an amount of Rs.4.96 lacs has been provided during the year in revenue account.

xv) Interest on outstanding inter corporate deposit has not been provided in view of the earlier understanding arrived at for waiver of interest with ICD lenders.

xvi) Funds provided/arranged for during earlier years by the Directors and/or companies in which directors are interested have been shown as unsecured long term liability not bearing interest in view of an understanding to this effect with the respective parties.

xvii) Repairs & maintenance expense of Plant and Machinery as per Note-23 include cost of repairs, replacement of partial worn out assets and consumable items utilized for minor modification of revenue nature necessary for suitability of new products being produced by the company on Job charges basis for M/s Ranbaxy Lab. Ltd.

xviii) Laboratory chemicals/consumable spares including repairs and maintenance cost of lab equipments as per Note-23 has been charged to revenue account after reducing the cost value of estimated stocks remaining unutilized at site and storages of these items at close of the year at proportionate cost basis.

xix) Company has taken insurance covers for fire on building, plant & machinery, inventories of the company and Public Liability Insurance covers. Accordingly, adequacy of risk cover is justified by the management.

xx) The works of the company were covered by ESIC with effect from June'08. All the workers having salary within the limit of ESIC are - covered under ESIC scheme & company is complying the provisions of the ESIC, Act regularly. Contribution payable for the period from June,08 to Feb.'09 not paid/provided earlier, as intimation from department regarding coverage for the period was received and registration was granted in March,09 only and for which liability was provided in Previous year is yet to be paid, amounting to Rs.4.61 lacs.

xxi) Company is having a sum of Rs.16.58 lacs as liability towards the Statutory due as at the dose of the year. The amount includes P.F. payable Rs.13.91 lacs, ESIC Rs.1.69 lacs, TDS Payable Rs.0.91 lacs. Majority of these payments have been paid off before signing of these financial statements.

xxii) Accounting Standard (AS-15) on Employee Benefits

Contributions are made to Govt. Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees as per provision of these respective Acts. The contributions are normally based on a certain proportion of the employee's salary. Amount recognized as an expense in respect of these defined contribution plan as under.

Provision for Gratuity and Earned leave liability is based on actuarial valuation done by independent actuary as at the end of the year. Based on the actuarial valuation provision is made for a sum of Rs.29.28 lacs and it covers all regular employees. Major drivers in actuarial assumptions are, years of service and employee compensation. Commitments are actuarially determined using 'Projected Unit Credith method. Gains and Losses on changes in actuarial assumptions are accounted for in the Statement of Profit & Loss, details as under:

xxiii) Income/Expenditure in Foreign Currency: -Nil- (P.Y. -Nil-). ,

xxiv) Auditors Remuneration :

Legal & Professional expenses includes Auditors's Remuneration amounting to Rs.1-lacs to Statutory Auditors and Rs,.0.30 lacs towards cost & internal Auditors.

xxv) Information regarding primary segment reporting as per AS-17 for the year ended 31/03/2012:

The Company is engaged in the primary business segment of Bulk drug and drug intermediate manufacturing on job basis only. Hence, there is single segment assets and liabilities only.

There was no geographical segment.

xxvi) Accounting Standard (AS-20) on Earnings Per Share:

As required by Accounting Standards 20 issued by the Institute of Chartered Accountants of India, the earning per share (EPS) is calculated by dividing the profit attributable to the equity share holders by the average number of equity shares outstanding during the year and is ascertained as follows:

xxvii)The company has not received any intimation from suppliers regarding their status under the micro, small and medium enterprises and hence disclosure, if any relating to balance outstanding including interest thereon, if any, as at the Balance Sheet date could not be defined, hence has not been furnished. This has been relied upon by the Auditors.

xxviii) The revised Schedule-VI has been effective from 1st April,2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year figures have been regrouped/re-arranged wherever necessary to correspond with the current year's classification/disclosure and rounded off to nearest one rupee.

xxix) Notes 1 to 25 form an integral part of the statement of accounts of the company comprising Balance Sheet as on 31st March'2012 and the Profit & Loss Statement for the year ended on that date.

Mar 31, 2010

1. Contingent Liabilities not acknowledged as debts and provided for:

(a) Labour cases: In four labour cases compensation claimed amounting to Rs.2.25 lacs approx. have not been acknowledged and provided for. (Previous year Rs.2.25lacs).

(b) Sales tax exemption: Sales tax exemption granted to the company as a new industrial unit had been withdrawn by the Authorities as Job Work could not be considered as companys own continuing business activity. Company had lost the matter before the Honble High Court and SLP filed before Supreme Court of India had also not been admitted. Therefore, the original liability on this account had been provided fully by the company during earlier year. Company may contingently be held liable to interest or penalty as and wi ien liability crystallizes. The same is not ascertainable at present and not provided for as company is making request for waiver of the same to the department concerned.

2. Company had been advanced by M/s Ranbaxy Lab. Ltd. to the tune of Rs.395- lacs in earlier year to meet its obligation of OTS reached with the IDBI and UBI, repayable in 60 monthly installments with interest @ 13.5% p.a. As per agreement, the advance was secured against assets of the company. However, necessary Charges could not be registered by M/s Ranbaxy Lab. Ltd. till date, hence has been shown as unsecured loan liability.

3. The company is persuading Trade debtors amounting to Rs.37.37 lacs which were considered doubtful of recoveiy and, therefore, was fully provided for. However, in view of steps taken by management for recovery the same are not written off during the year.

4. In the opinion of the management the realizable value of current assets, loans & advances in the ordinary course of business would be, at least, equal to the amount at which they are stated in the balance sheet.

5. The Sundry Creditors and Sundry Debtors balances are subject to reconciliation and confirmation from the parties concerned.

6. Additional information pursuant to the provision of part-It of schedule VI of the Companies Act, 1956 to the extent applicable to the company:

7. During the year company has carried its operations based on a manufacturing Contract for five years with M/s Ranbaxy Laboratories Ltd., executed in 2008 for manufacturing Bulk Drug intermediates as per their specification and requirements on Fixed minimum monthly Job Charges basis till 28.02.09. With affect from 1 st Mach09, the model of operation has changed in view of Ranbax/s internal requirements partially on fixed basis and for regular products on per kg. basis. Revenue from this activity for the year has been taken accordingly.

8. Deemed sales amounting to Rs.112.32 lacs has been booked on a/c of utilization of consumables & indirect Raw materials for carrying contract manufacturing processes for the principal manufacturer during the year on cost basis and on which VAT has been charged & paid and the same has been treated in accounts accordingly. Procurement cost of materials were shown under manufacturing expense in Schedule 16.

9. Company has made partial payment of Rs. 14.00 lacs during the year towards it obligation of Sales tax liability provided in earlier year upon withdrawal of exemption to the Company by the Sales Tax Department.

10. Company has capitalized Plant and machinery amounting to Rs. 60.16 lacs (including installation cost) during the year. Company has also discarded damaged and/or non working assets having gross value Rs.6.31 lacs. However, one norr-wjfWflgfc^Sirng towers and old capital work-in-progress expenses were not discarded and written off in view of management perception for bringing these assets and expenses in gainful use in near future by the Company. The net impact after adjustment of depreciation fund has been charged to revenue of the year.

11. Travelling and conveyance expenses include Rs.3.53 lacs (Previous Year Rs.3.79 lacs) spent by directors for business purposes.

12. Annual General Meeting expense has been debited to respective heads of accounts.

13. Company has provided for bonus @ 8.33% to all employees of the Company. Accordingly an amount of Rs.4.97 lacs has been provided during the year in revenue account.

14. Interest on outstanding intercorporate deposit has not been provided in view of the earlier understanding arrived at for waiver of interest with ICD tenders.

15. Funds provided/arranged for during earlier years by the Directors and/or companies in which directors are interested have been shown as unsecured current liability not bearing interest in view of an understanding to this effect with the respective parties.

16. Repairs, maintenance and modification expenses of Plant and Machinery as per Schedule -16 consist cost of repairs, replacement of partial worn out assets and consumable items utilised for minor modification of revenue nature necessary for suitability of new products being produced by the company on Job charges basis for M/s Ranbaxy Lab. Ltd.

17. Laboratory chemicals/consumable spares as per Schedule-16 has been charged to revenue account after reducing the cost value of estimated stocks remaining unutilized at site and storages of these items at close of the year.

18. Company has taken group personal insur-tnce cover for the employees and covers for fire etc. for building, plant & machinery of the company. Therefore, adequacy of insurance cover is justified by the management.

19. The works of the company were covered by ESIC with effect from June08. All the workers having salary within the limit of ESIC are covered under ESIC scheme & company is complying the provisions of the ESIC Act regularly.

20. Company has identified micro and small enterprises. The Balance outstanding including interest thereon, if any, as at the Balance Sheet date disclosed, on which Auditors have also relied upon.

-NIL-

21. Information regarding primary segment reporting as per AS-17 for the year ended 31/03/2010:

The Company is engaged in the primary business segment of Bulk drug and drug intermediate manufacturing on job basis only. Hence, there is single segment assets and liabilities only. There was no geographical segments.

22. Previous year figures have been regrouped/re-arranged wherever considered necessary and rounded off to nearest one rupee.

23. Schedule 1 to 20 form an integral part of the statement of account of the company comprising Balance Sheet as on 31 st March2010 and the Profit & Loss Account for the year ended on that date.

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