Notes on Secured Loans:
1. SECURED LOANS :
The loan term loan from Andhra Pradesh Industrial Development
Corporation Ltd., (APIDC) and Andhra Pradesh State Financial
Corporation (APSFC) are secured by joint equitable mortgage of title
deeds relating to the Company's immovable properties and further
secured by deed of hypothecation in respect of movable properties
present and future, other than those movable properties on which second
charge has been created in favour of State Bank of India, Secunderabad
for availing working capital facilities.
The Terms Loans from APIDC and APSFC are further secured by the
personal guarantees of two Directors of the Company.
2. UNSECURED LOANS :
Loans taken from Haritha Finance Limited guaranteed by the Directors of
the Company. No security or charge has been created against these
3. R & D Expenditure :
The expenditure incurred by way of consumption of materials and time
spent by the personnel for developing the products like 4,7
Dichloroquinoline and Chloroquine Phosphate in 1995-96 amounting to
Rs.40.46 lacs is being set apart as R&D expenditure is being written
off over a period of 10 years beginning from 1995-96.
4. SALES TAX :
Sales Tax is accounted as per the bills raised on the customers.
Further liability, if any, arising on assessment is accounted as and
when the demand is raised by the Department consequent to the
5. INCOME TAX :
No provision is made for Income Tax by the Company as there is no
6. The Company has filed a Compliant in respect of Working Capital
limits with Banking Ombudsman on 19th November'97 against State Bank of
India, R.P. Road Branch, Secunderabad claiming damages of Rs. 450 lacs,
for the losses incurred by the Company due to the negligence and
deficiency of services of State Bank of India. The said Complaint was
disposed off by the Banking Ombudsman in favour of the Company on 9th
January'98 by directing State Bank of India to pay Rs. 10 lacs as
Compensation to the Company, since the Banking Ombudsman Scheme 1995
can grant relief only up to Rs. 10,00,000/-. The amount of
compensation has not been received by the Company as on date and also
no provision is being made for receipt of the same in the Accounts as
7. The Company has not provided any interest on the amount outstanding
under cash credit with State Bank of India as at the end of the year.
As the Banking Ombudsman has passed the order in favour of the Company,
the Company decided not to make any provision and is also contemplating
to take necessary legal action for adequate compensation.
8. The Company has filed Suit (No. S.R. No. 19798/98) in the First
Senior Civil Judge, City Civil Court, Hyderabad claiming a compensation
of Rs. 450 Lacs from State Bank of India for the deficiency in services
of the Bank.
9. The State Bank of India has filed an application for recovery of an
amount of Rs. 1,69,12,478.77 from the Company before the Debt Recovery
10. No interest is provided on the Unsecured Loans taken from Directors
and others. The total of these Unsecured Loans amount Rs.
1,54,47,974.00 as on 31-03-2000.
11. Balances appearing under Inventories, Sundry Debtors, Loans and
Advances Secured and Unsecured Loans, Sundry Creditors and other
creditors are subject to confirmation and for reconciliation, if any.
The difference if any will be charged to revenue when ascertained.
12. Figures have been rounded off to the nearest rupee.
13. Previous year's figures have been regrouped/reclassified wherever
necessary so as to confirm to current year presentation.