1 Disclosure under Revised Accounting Standard 15 on Employee Benefts:
Consequent to Accounting Standard 15 Employee Benefts (Revised 2005)
becoming effective, the Company has made the provision for Defned
Contribution Plan and Defned Beneft Plan.
A Defned Contribution Plan
During the year, the Company has recognized Rs.10,08,726/- (Previous
Year Rs. 10,91,244/-) towards Defned Contribution Plan Obligation.
B Defned Beneft Plan
A) Leave Encashment
Liability is computed on the basis of Leave Encashment beneft payable
to all eligible employees at the rate of daily salary as per current
accumulation of leave days, as per the Projected Unit Credit Method.
2 Contingent Liabilities 2011-12 2010-11
In Rs In Rs
Contingent liabilities not provided for
in respect of:
I) Letter of credit in respect of purchases,
outstanding at the year-end 106,047 4,071,198
II) Income tax under dispute 1,220,952 1,807,387
III) Fringe beneft tax under dispute 201,972 201,972
IV) Disputed Labour Dues 44,638,168 37,903,835
V) Claim of interest on unsecured Loan
from Gujarat Industrial Investment 11,261,277 10,793,277
VI) Claim made by an ex-employee pending
with Valsad Civil Court - 464,765
[including interest of Rs.Nil
VII) Claim made by an supplier pending
with Vadodra Civil Court 548,816 465,098
[including interest of Rs.4,40,538
3 Estimated amount of contracts (net of advances) remaining to be
executed on capital account and not provided for Rs.1,04,829/-
(Previous year Rs.12,73,533 /-).
4 The outstanding balance as at 31st March, 2012, in respect of
certain balances of trade receivables, deposits, loans & advances, long
term borrowings, liability for expenses, trade payables and creditors
for capital expenditure are subject to confrmation and adjustments
necessary upon reconciliation if any, consequential impact thereof in
the fnancial statements is not ascertainable. The Mangement does not
expect any material variation in the fnancial statements.
5 (a) The Company is a sick industrial Company under the provisions of
the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
The Rehabilitation Scheme formulated for revival of the Company has
been sanctioned by the BIFR at the hearing held on 12th January, 2012
and the BIFR order has been issued to the Company on 1st March, 2012.
However pending the necessary consent / formalities with statutory
authorities and stock exchanges as at 31st March, 2012, adjustments
with regard to effect of the directions as contained in the scheme
approved by the order of BIFR including the effect of reduction in
equity share capital and issue of further equity shares have been given
subsequent to the balance sheet date, except that the Company has
already accounted during the year, for the relief of interest amounting
to Rs.1,33,75,163 given by the operating Agency, Union Bank of India on
account of reduction in interest rate from 1st October, 2008, the
cutoff date from which the Company is declared as sick unit, to 30th
September, 2011 (Rs.1,20,43,280 for the period from 1st October, 2008
to 31st March, 2011 which is shown as an exceptional item and
Rs.13,31,883 for the period from 1st April, 2011 to 30th September,
2011 which is credited to fnance cost) and write back of unsecured loan
of Rs.3,95,10,377 in terms of the approved scheme & consent for waiver
by promoter Company Yuhan Corporation for repayment of unsecured loan
of Rs.3,95,10,377 which has been shown as income under the head
(b) Other releif and concessions as provided in Rehabilitation Scheme
sanctioned by the BIFR at the hearing held on 12th January 2012, are as
(i) Income tax department to consider relief u/s. 41(1) i.e. additions
not to consider write back of liabilities / no longer considered
payable, exemption from Minimum Alternate Tax (MAT) till the total loss
is adjusted, to allow relief u/s.
72 for carry forward of losses beyond 8 years and until the earlier of
their absorption against taxable income in future years, to consider
waiver of penalty imposed.
(ii) Securities and Exchange Board of India to grant of exemption from
opertaions / applicability of regulations 7, 10, 11 and 12 of the SEBI
(Substantial Acquisition of Shares and Takeover) Regulations 1997.
(iii) Bombay Stock Exchange to allow continued listing of the Company''s
shares on the BSE post share capital restructuring, to consider
automatic listing of additional shares.
(iv) Registrar of Companies (ROC) to consider waiver of fee payable to
ROC, Gujarat in respect of increase in authorized share capital as and
(v) The Company may exercise the option of revaluing the land and
writing off accumulated book losses to that extent with the permission
(vi) Promoters / Co-promoters to bring in funds to meet the cost of the
scheme in the form of unsecured loan to the extent of Rs.3,50,00,000
irrespective of the provisions of Companies Act, 1956 or any other
6 The Company has brought forward losses of Rs.27,90,76,856 which has
resulted in negative net worth of Rs.13,86,43,883 as at 31st March,
2012. Further, the Company also has a working capital defciency. The
Company is also a sick Company within the meaning of Section 3 (1) (o)
of the Sick Industrial Companies (Special Provisions) Act 1985, and in
accordance with the provisions of section 15 (I) of the said Act. The
Company has been registered with the Board for Industrial & Financial
Reconstruction (BIFR). Further the Rehabilitation Scheme has been
sanctioned by the Board for Industrial and Financial Reconstruction
(BIFR) in the hearing held 12th January, 2012. The Company has
initiated efforts including development of new products and has
ventured into manufacturing of goods on own and on job work basis so as
to reduce the losses. Accordingly these accounts have been prepared on
a going concern basis.
7 The Company is manufacturing Bulk Drugs for its own and on job work
basis for others. Hence, there is no separate reportable segment as per
Accounting Standard - 17 (AS-17) Segment Reporting as notifed by
Companies (Accounting Standards) Rules 2006.
8 In view of carry forward losses of earlier years as per Income Tax,
no provision for the Income Tax has been made on proft of the current
9 In the opinion of the Management, Current / Non-current Assets, Long
term / Short term Loans & Advances are approximately of the value
stated, if realized, in the ordinary course of business. The provision
for all known and determined liability is adequate and not in the
excess of the amount reasonably required.
10 During the year ended 31st March, 2012, the Revised schedule VI
notifed under The Companies Act 1956, has become applicable to the
Company, for presentation and preparation of its fnancial statement.
The adoption of revised schedule VI does not impact recognition and
measurement principles followed for preparation of fnancial statements.
However, it has signifcant impacts on presentation and disclosure made
in the fnancial statements. The Company has also reclassifed the
previous year fgure in accordance with the requirements applicable in
the current year.