1.1 SECURED LOANS
 
 I.  Term Loans from various banks are secured by way of First Pa ri
 Passu Charge on all the fixed assets of the Company and further secured
 by way of Second Pari Passu Charge on all the current assets of the
 Company and personal guarantee of directors namely Sh. Sanjiv Goyal &
 Sh. Aryan Goyal.
 
 Other Loans comprise of Vehicle Loans which are secured against
 hypothecation of respective vehicles.
 
 Repayment Schedule of Vehicle Loans :
 
 II.  Working Capital Limits & Corporate Loans are secured by way of
 First Pari Passu Charge on all the current assets of the Company and
 further secured by way of Second Pari Passu Charge on all the fixed
 assets of the Company and personal guarantee of directors namely Sh.
 Sanjiv Goyal & Sh. Aryan Goyal.
 
 1.2 FIXED ASSETS
 
 A sum of Rs. 454.44 millions (previous year Rs.368.90 millions) has
 been capitalized under the head Plant & Machinery (Research &
 Development). The company has been regularly working on modernization
 and development of its existing technological system and development of
 new products & processes. As such, there has been loss of capacity
 utilization because of the development of new product and processes. In
 the opinion of management, the above process will yield benefits in the
 coming years in the shape of more demand in the international market as
 well as better price.
 
 1.3 CURRENT ASSETS, LOANS & ADVANCES
 
 In the opinion of the management of the Company, the current assets,
 loans and advances are approximately of the value as stated, if
 realized in the ordinary course of business.
 
 1.4 CURRENT LIABILITIES
 
 I.  The principal amount remaining unpaid as at 31 March 2012 in
 respect of enterprises covered under the Micro, Small and Medium
 Enterprises Development Act, 2006 are Rs. 1.59 millions (previous year
 Rs. 1.32 millions). The interest amount computed based on the
 provisions under Section 16 of the MSMED Act Rs. 0.05 millions
 (previous year Rs 0.03 millions) is remaining unpaid as of 31st March
 2012. The principal amount that remained unpaid as at 31st March 2011
 was paid during the year. The list of undertakings covered under MSMDA
 was determined by the Company on the basis of information available
 with the Company and have been relied upon by the auditors.
 
 II.  Investor Education and Protection Fund
 
 Other liabilities include Rs. 0.88 million (previous year Rs. 0.81
 millions) which relates to unclaimed dividend and share application
 money refundable. Out of it, no amount has become due for deposit to
 Investor Education and Protection Fund as at balance sheet date.
 
 1.5 CONTINGENT LIABILITIES AND COMMITMEN TS
 
                                              (Rs. in millions)
 
 S.
 No.  Particulars                       31.03.2012     31.03.2011
 
 a)   Contingent Liabilities
 
 i)   Claims not acknowledged as
      debts:- **
 
     - Income Tax matters                   5.97         26.59
 
     - Excise matters                       4.16          -
 
     - Service Tax matters                 13.35          -
 
 ii)  Bank Guarantees                      26.84          4.50
 
 iii) Bills Discounted                    583.78         39.95
 
 iv)  Letter of Credit (Foreign / 
 Inland)                                  560.00        482.40
 
 v)  Other money for which 
 Company is contingently liable
 
 a) Differential amount of 
 custom duty in respect of
 machinery imported under EPCG Scheme       1.80         38.08
 
 b)   Commitments
 
 i)  Estimated amount of contracts
 remaining to be                          104.91        292.44
 executed on capital account and 
 not provided
 for (net of advance)
 
 ** The matters are subject to legal proceedings in the ordinary course
 of business. The legal proceedings, when ultimately concluded will not,
 in the opinion of management, have a material effect on the results of
 operation or financial position of the company.
 
 1.6 INCOME TAX
 
 Current Tax
 
 Provision for Income tax has been made as per Income-tax Act, 1961.
 
 Deferred Tax 
 
 In compliance with Accounting Standard (AS-22) relating to Accounting
 for Taxes on Income issued under Companies (Accounting standards) Rule
 2006, as amended upto date , the Company has provided Deferred Tax
 Liability accruing during the year aggregating to Rs. 122.16 million
 (Previous Year Rs 6.20 million) and it has been recognized in the
 Profit & Loss Account. In accordance with clause 29 of Accounting
 Standard (AS 22) Deferred Tax Assets and Deferred Tax Liabilities have
 been set off.
 
 1.7 LEASES
 
 Operating leases are mainly in the nature of lease of office premises
 with no restrictions and are renewable/ cancellable at mutual consent.
 There are no restrictions imposed by lease arrangements. There are no
 sub leases.  Lease payments recognized in the profit and loss account
 are Rs. 8.49 millions (Previous Year Rs. 7.14 millions).
 
 1.8 EMPLOYEE RETIREMENT BENEFITS
 
 1.  Benefits valued: Gratuity & Earned leave (both availment &
 encashment)
 
 2.  Nature of the plans: Defined benefit; both gratuity & compensated
 absence liabilities are unfunded
 
 3.  Valuation method: Projected Unit Credit Method
 
 1.9 SEGMENT REPORTING
 
 i) Primary Segment (Business Segment)
 
 The Company operates only in the business segment of Pharmaceuticals
 Products, and in the opinion of the management the inherent nature of
 activities in which it is engaged are governed by the same set of risks
 and reward. As such the activities are identified as single segment in
 accordance with the Accounting Standard (AS-17) issued under Companies
 (Accounting Standards) Rule 2006, as amended upto date.
 
 In view of the interwoven / intermix nature of business and
 manufacturing facility, other segmental information is not
 ascertainable.
 
 1.10 RELATED PARTY DISCLOSURES
 
 Related party disclosures as required under Accounting Standard (AS-18)
 on Related Party Disclosures issued under Companies (Accounting
 Standards) Rule 2006, as amended upto date , are given below: - a)
 Relationship
 
 i) Subsidiary Companies
 
 Chempharma Private Limited, Sri Lanka - Wound up during the previous
 year
 
 Nectar Capital Limited, Mauritius - Incorporated on 27th May, 2010
 
 Nectar Lifesciences UK Limited, United Kingdom - Incorporated on 1st
 March, 2011.
 
 ii) Joint Ventures and Associates None
 
 iii) Key Management Personnel (Managing Director/Whole-time directors)
 
 Sh. Sanjiv Goyal Sh. Aryan Goyal Sh. Dinesh Dua*
 
 Sh. Saurabh Goyal *(resigned w.e.f. 31st July 2012)
 
 iv) Relatives of the Key Management Personnel
 
 Smt. Raman Goyal
 
 v) Entities over which key management personnel/their relatives are
 able to exercise significant influence
 
 Surya Narrow Fabrics - New Delhi Nectar Lifestyle Limited- New Delhi
 Nectar Organics Ltd. - New Delhi
 
 1.11 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBS)
 
 During the year 2006-2007, the Company raised Zero Coupon FCCBs
 aggregating USD 35 million (Rs. 1563.50 Million as on the date of the
 issue) for financing its capital expenditure and other permitted
 expenditure. The bond holders had the option to convert the FCCBs into
 equity shares of the company at an initial conversion price of Rs.
 25.996 per share at a fixed rate of exchange on conversion Rs. 44.6725
 per USD, at any time on and after 4th June, 2006 but prior to 16th
 April 2011. Further the Company has an option of early redemption of
 these FCCBs in whole at any time on or after 25th April, 2009 but prior
 to 26th April, 2011, subject to certain conditions. During the year
 2007-2008, FCCBs amounting to Rs. 86.34 millions (USD 20 millions) were
 converted into Equity Capital. The balance FCCBs were redeemed in USD
 on 26th April, 2011 at 150.71 per cent of their principal amount.
 
 The FCCBs premium payable on redemption for the current fina ncial year
 2011-12 as well as for the previous financial year 2010-11 has been
 charged to Profit & Loss Account. In earlier years upto 2009-10, the
 same was charged to Securities Premium Account, due to uncertainty, as
 the bond holders had the option to convert the FCCBs into equity shares
 of the company. However, in the current financial year, expenses
 relating to the period ended 31 st March 2010 were charged to the
 Profit and Loss under Reserves & Surplus and reversed from Securities
 Premium Account.
 
 1.12 DERIVATIVES
 
 Currency derivatives
 
 The Company uses foreign currency forward contracts and currency
 options to hedge its risks associated with foreign currency
 fluctuations relating to certain firm commitments and forecasted
 transactions. The use of foreign currency forward contracts and
 currency options is governed by Company''s strategy. The Company does
 not use forward contracts and currency options for speculative
 purposes.
 
 1.13 Other Borrowing Costs include losses on account of foreign
 exchange fluctuation (net) amounting to Rs. 18.68 millions (Previous
 Year gain of Rs. 10.45 millions)
 
 1.14 Due to applicability of Revised Schedule VI with effect from
 current financial year, the Company has reclassified previous year''s
 figures to conform to this year''s classification.