Plethico Pharmaceuticals

1.  Contingent Liabilities not provided for:
 
                                      (Amount in Million)
 
 Particulars                              31.12.2008   31.12.2007
 
 i    Pending Bank Guarantee                   0.30        55.10
 
 ii   Corporate Guarantee against             56.00         0.00
      third party loan
 
 iii Pending Letter of Credit                 44.33        20.47
 
 iv Estimated amount of contract               7.83         7.30
 remaining unexecuted on capital
 account and not provided for
 (Advance given Rs. 3.58 million)
 (Previous Year Rs. 3.37 million).
 
 v   Premium payable on redemption           343.35        43.12
 of Foreign Currency Convertible
 Bonds. (See Note 17)_
 
 2.The working capital loans taken from Bank of Baroda are secured by
 (a) Hypothecation of companys entire stocks and book debts on first
 pari passu charge basis (b) On first pari passu charge basis by (i)
 Equitable mortgage of companys land and building situated at Khasra
 No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at Khasra No.
 285/1/2, Village Gari Pipliya, Manglia, Indore. (ii) Hypothecation of
 Plant and Machinery installed in the aforesaid factory premises
 situated at Khasra No. 821/1, Village Dharavara, Tehsil Depalpur,
 Indore and at Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore
 (c) Personal Guarantee of two directors of the company.
 
 3.The working capital loans taken from State Bank of Indore are secured
 by (a) Hypothecation of companys entire stocks and book debts on first
 pari passu charge basis (b) First and exclusive charge by way of
 equitable mortgage over companys land and building situated at Khasra
 No.285/1/1, Village Gari Pipliya, Manglia, Indore (c) Hypothecation of
 Plant and Machinery installed in the factory premises situated at
 Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore (d) Personal
 Guarantee of two directors of the company.
 
 4.The working capital loan taken from State Bank of India is secured by
 (a) Hypothecation of companys entire stocks and book debts on first
 pari passu charge basis (b) On second charge basis by (i) Equitable
 mortgage of companys land and building situated at Khasra No.821/1,
 Village Dharavara, Tehsil Depalpur, Indore and at Khasra No. 285/1/2,
 Village Gari Pipliya, Manglia, Indore. (ii) Hypothecation of Plant and
 Machinery installed in the aforesaid factory premises situated at
 Khasra No. 821/1, Village Dharavara, Tehsil Depalpur, Indore and at
 Khasra No. 285/1/2, Village Gari Pipliya, Manglia, Indore (c) Personal
 Guarantee of director of the company.
 
 5.The term loan taken from State Bank of Indore, Industrial Finance
 Branch, Indore is secured on first charge basis by (i) Equitable
 mortgage of companys land and building situated at Khasra No.285/1/1,
 Village Gari Pipliya, Manglia Indore (ii) Hypothecation of Plant and
 Machinery installed in the aforesaid factory premises situated at
 Khasra No. 285/1/1, Village Gari Pipliya, Manglia, Indore (iii)
 Personal Guarantee of two directors of the company.
 
 6.The corporate loan taken from IDBI Bank is secured by (i) pledge of
 equity shares of the company by a director of the company (ii) Residual
 charge over companys current assets and movable fixed assets (iii)
 Personal Guarantee of a director of the company.
 
 7.The Foreign Currency Short Term Loan taken from Induslnd Bank is
 secured by (i) Subservient charge over companys current assets (ii)
 Personal Guarantee of a director of the company.
 
 8.Corporate Loan taken from State Bank of India is secured by (i)
 pledge of equity shares of the company by a director of the company
 (ii) Personal Guarantee of a director of the company.
 
 9. The term loan taken from EXIM Bank, Mumbai is secured by (i)
 exclusive first charge by way of equitable mortgage of companys land
 and building situated at Khasra No.821/2, Village Dharawara, Depalpur
 Tehsil, Indore (ii) Hypothecation of Plant and Machinery installed in
 the aforesaid factory premises situated at Khasra No. 821/2, Village
 Dharawara, Depalpur Tehsil, Indore (iii) pledge of equity shares of the
 company by a director of the company (iv) Personal Guarantee of two
 directors of the company.
 
 10.Term loan taken from Karur Vysya Bank is secured by (i) pledge of
 equity shares of the company by a director of the company (ii) Personal
 Guaranteeof a director of the company.
 
 11.The term loan taken from HSBC Bank is secured by (i) first pari
 passu charge over stock and book debts (ii) second pari passu charge
 over fixed assets of the company (iii) pledge of equity shares of the
 company by a director of the company (iv) Personal Guarantee of two
 directors of the company.
 
 12.The SBLC Limit sanctioned by Bank of India is secured by (I) pledge
 of equity shares of the company by a director of the company (ii)
 second pari passu charge over the current assets and fixed assets other
 than those specifically charged to other lenders (iii) Personal
 Guarantee of two directors of the company.
 
 13.Vehicle/House Loans are secured by hypothecation of related
 Vehicle/House Property.
 
 14.Term Loan repayable within one year is Rs.708.90 million (Previous
 year Rs. 575.40 million)
 
 15.Foreign Currency Convertible Bonds (FCCB) were considered as
 Non-Monitory Liability during the previous period, but keeping in view
 of the provisions of AS-11 and the principal of prudence as enunciated
 in AS-1, the Foreign Exchange Loss of Rs.682.50 million arising out of
 revaluation in respect of outstanding FCCB of USD 75 mn. as on
 31.12.2008 has been recognized and charged to the Profit and Loss
 Account of the year as an extra ordinary item.
 
 16.Provision of Rs. 343.35 million has been made on account of premium
 payable on redemption of FCCB in terms of the Offering Circular dated
 18.10.2007, for the period up to 31.12.2008 which has been charged to
 the Share Premium Account.
 
 17.During the year, the company has acquired 20% stake in a
 Pharmaceutical / Nutraceutical marketing and distribution chain owned
 by Tricon Holding FZE, UAE for a total consideration of US$ 20 million.
 The formalities for acquisition/ transfer of shares could not be
 completed up to 31.12.2008, hence amount remitted towards Purchase
 Consideration has been considered as an advance and shown in the
 Balance Sheet under the head Investments.  19 The company holds 100%
 equity of Plethico Global Holdings B.V, Netherlands who in turn holds
 directly/indirectly 100% equity of Plethico US Holdings KFT, Hungary
 and Natrol INC, USA. Therefore, such companies are indirect
 subsidiaries of our company. The company also holds 100% equity of
 Plethico International Ltd. UAE incorporated to set up lozenges and
 formulation manufacturing unit in UAE. The accounts of both the wholly
 owned subsidiary companies have been merged and consolidated financial
 statements have been produced in terms of AS-21.
 
 18.The company has duly obtained extension with respect to the overdue
 export proceeds in accordance with the provisions of the Foreign
 Exchange Management Act, 1999 and Foreign Exchange Management (Export
 of goods and services) Regulations, 2000.
 
 19.During the year, the Authorized Capital of the company has increased
 from Rs. 400 million to Rs. 600 million comprising of
 60millionequitysharesofRs.10/-each.
 
 20.Balance with a non-scheduled bank comprises balance of Rs.l .4
 million in current account with Karur Vysya Bank.
 
 21.Loans and advances recoverable in cash or in kind include Rs.473.20
 million recoverable towards part disinvestments of equity shares of
 associate companies.
 
 22.Debtors, Loans & Advances, Creditors and Bills Payable are subject
 to confirmation by the parties. The company has issued confirmation
 letters to such parties and differences if any, shall be reconciled in
 the current Year.
 
 23.In opinion of the Board, the provisions for known liabilities are
 adequate and current assets in the ordinary course of business have a
 value at least equal to the amount at which they are stated.
 
 24.The figures of previous period have been regrouped / reclassified
 wherever necessary to conform to the current years presentation.
 However, previous period figures are of 15 months period ended on
 December 31, 2007, hence those are not strictly comparable with the
 current years figures.
 
 25.The company has initiated the process of obtaining confirmation from
 suppliers regarding the registration under the MSME Act Micro Small
 and Medium Enterprises Development Act 2006, which came into effect
 from 2nd October, 2006. The suppliers are not registered wherever the
 confirmation are received and in other cases, the company is not aware
 of their registration status and hence information relating to
 outstanding balance or interest due is not disclosed as it is not
 determinable.
 
 26. Amount Receivable from Managerial Staff Rs. Nil (Max Balance Rs.
 Nil)
 
 27. Disclosure on Lease as per Accounting Standard 19 on Accounting for
 lease The company has entered into operating lease agreement for
 office premises, Guest house, warehouse and vehicle renewable on
 periodic basis and is cancelable. The rental expenses for operating
 lease are amounting to Rs. 20.57 million (Previous
 
 27. The company has an employees gratuity fund managed by Life
 Insurance Corporation of India. As required by AS-15, the status of the
 present value of the obligations under the gratuity plan at the end of
 the year was Rs.15.63 million whereas fair value of plan assets at the
 end of the year was of Rs.16.90 million. The total benefit of Rs.0.30
 million has been paid during the year. The return on plan assets during
 the year was Rs.1.07 million, however there was no excess/short amount
 over estimated return on plan assets.