Granules India

1) Contingent liabilities not provided for in respect of:
 
                                                     (Rupees in Lakhs)
                                          As at             As at
                                   As at March 31,2009  June 30,2008
 
 a) Claims against the Company 
    not acknowledged as debts:
    Income tax                            43.47            43.47
    Customs duty                          43.47            43.47
 b) Estimated amount of contracts 
    remaining to be executed on Capital
    account
    and not provided for 
    (net of advances)                      -              412.97
 c) Letters of credit and Bank
    Guarantees issued by Bank            1965.02         4519.04
 d  Bills discounted with banks          8050.26         6247.31
 
 2) Secured loans:
 
 a) Term loans: Term loans from Banks are secured by equitable mortgage
 of Land and Buildings and hypothecation of plant and machinery located
 at Jeedimetla, Gagillapur and Bonthapally on pari passu basis. Term
 loans are further secured by second charge on hypothecation of stocks
 of raw materials, finished goods, semi finished goods and receivables.
 
 b) Working capital facilities: The working capital facilities from
 Banks are secured by hypothecation of stocks of raw materials, finished
 goods, semi finished goods and receivables on pari passu basis. The
 working capital facilities are further secured by a second charge on
 the fixed assets of the Company.
 
 c) All the above loans except loan from International Finance
 Corporation are further secured by personal guarantee of the Managing
 Director. The Company has requested Consortium Bankers to waive the
 personal guarantee of the Managing Director, which is under active
 consideration.
 
 d) Hire purchase loans are secured by hypothecation of the asset
 purchased.
 
 3) Sundry Creditors include a sum of Rs. 244.15 lakhs due to micro,
 small and medium enterprises. Total outstanding dues of micro, small
 and medium enterprises have been determined to the extent such parties
 have been identified on the basis of the information available with the
 Company. The parties to whom the Company owes sums outstanding for more
 than 30 davs includina LCs opened as at the Balance Sheet date are:
 
 Durga Industries Trijama Filterall Pvt.Ltd Mohankrihsna Polymers Stick
 Lables Shivshakti Timber Industries
 
 Spectrum Filtration Pvt.Ltd Unnathi Stickers Tirumala Comprints Pvt.Ltd
 Yenflexi Pack Standard Reagents Pvt.Ltd
 
 Super Olefins (P) Ltd
 Shree Engineering Works
 Pragati Pack Pvt.Ltd
 Sree Venkatasai Packaging Pvt.Ltd
 
 4) During the year, the Company has capitalised borrowing costs of Rs.
 1044.89 lakhs towards Tablet facility at Gagillapur, grouped under
 Capital Work in Progress, (Previous year Rs. 466.92 lakhs for Tablet
 facility at Gagillapur, grouped under Capital Work in Progress),
 incurred during the year.
 
 5) Segment reporting: The Company has only one business segment of
 Pharmaceuticals. Therefore, the disclosure requirements of Segment
 reporting are not applicable.
 
 6) Sundry debtors include a sum of Rs. 4552.51 lakhs (Previous year:
 Rs. 3433.58 lakhs) due from a subsidiary company.
 
 7) Balances appearing under Sundry creditors, Capital WIP, Loans and
 advances and debtors are subject to confirmation and / or
 reconciliation, if any.
 
 8) Amortization of Miscellaneous Expenditure:
 
 a) GDR issue expenses of Rs.151.89 lakhs carried forward from earlier
 years are amortized over a period of 5 years commencing from the year
 in which the Projects commence commercial production. Tablet Block at
 Gagillapur had commenced commercial production during September 2008,
 hence the issue expenses are proportionately amortized.
 
 b) The Company has implemented a Voluntary Retirement Scheme (VRS).
 During the year, the Company has reversed the provision for an amount
 of Rs. 12.58 lakhs on account of some of the employees not accepting
 the scheme.
 
 9) The Government of Andhra Pradesh, Commissionerate of Industries has
 vide its Letter No.20/2/9/0444/ID dated 11 October 1999 and its
 clarification vide Letter dated 4 August 2001 determined an eligibility
 of Rs.184.12 lakhs towards Sales tax deferment on the sale of
 Paracetamol and the Sales tax payable by the company for a period of 14
 years commencing from 30 June 1998 to 29 June 2012 is deferred. The
 liability of Rs.75.24 lakhs as at 31 March 2009 (Previous year Rs.75.24
 lakhs) for the deferred Sales tax is shown under unsecured loans.
 
 10) In terms of accounting policy 11 for the accrual of export
 benefits, estimated benefits of Rs.168.74 lakhs (Previous year Rs.
 442.70 lakhs) have been taken into account under the DEEC/DEPB Schemes.
 
 11) Previous year figures are not comparable as current year consists
 of nine months as against twelve months previous year.