1. From District Industries Centre, Tamil Nadu (The loan is an interest
 free sales tax loan secured by simple mortgage on land & building both
 present & future situated at A9, A10, A11 & A24, SIDCO Industrial
 Estate, Maraimalai Nagar, Chengleput, Tamil Nadu and on all the
 machinery present and future erected and to be erected on the above
 said land & building.  Mortgage and charge shall rank PARIPASU with
 mortgage and charges created in favour of State Bank of India in
 respect of loans granted by them as detailed).
 
 2. Contingent Liabilities not provided for :
 
 a. Estimated amount of contract remaining to be executed on Capital
 Account is (Previous year Rs. 1,47,060/-)
 
 b. Counter Guarantees given by the Company against guarantees given by
 bankers.  (Previous year Rs. 24,72,651/-)
 
 c. Letters of Credit established by Bankers favouring suppliers.
 (Previous year Nil)
 
 d. Claims against the Company not acknowledged as debt :
 
 i. Suit filed by M/s. Scanchem A/S, Denmark for the recovery of USD
 1,79,174.30 equivalent to Rs. 78,47,834/- (1 USD = Rs. 43.80) not
 accepted by the company in view of the defective quality of materials
 supplied (Previous year Rs. 76,18,491/-)
 
 ii. Claims against the Company not acknowledged as debt :
 
 a. Disputed availment of MODVAT credit for the year 1996-97 (Previous
 year - Rs. 4,35,852/-)
 
 b. Disputed demand of Excise Duty for the year 1998-99 (Previous year -
 Rs. 9,09,069/-)
 
 c. Disputed availment of MODVAT credit for the year 1998-99 (Previous
 year - Nil)
 
 d. Disputed duty on reprocessing loss of 5% Platinum on Carbon for the
 year 1998-99 (Previous year - Nil)
 
 3. The Company is manufacturing only one class of goods viz., bulk
 drugs and purchases one class of raw materials viz., chemicals.  The
 quantitative figures are given below :
 
 4. The company has created a Trust which has taken a group gratuity
 policy with the Life Insurance Corporation of India for future payments
 of retiring gratuatants.  The premium thereon have been so adjusted as
 to cover the liability in respect of all employees at the end of their
 future anticipated service with the company.
 
 5. Subject to confirmation from parties, balances of Sundry Debtors,
 Advances and Deposits, Sundry Creditors and Unsecured Loans, have been
 incorporated in the accounts as per the balances appearing in the
 books.
 
 6. In the absence of confirmation from the Creditors as to their SSI
 status, the Company is unable to classify their outstandings in the
 current year.  Steps are being taken to ascertain the status of the
 Creditors.  The Company being sick industrial undertaking is unable to
 gather the particulars.
 
 7. The application to Board for Industrial and Financial Reconstruction
 (BIFR) dated 11.12.97 has been approved and the State Bank of India has
 been appointed as Operating Agency.  The revival package submitted to
 them has been appraised and the report has been submitted by the
 Operating Agency.  The report of Operating Agency i.e., SBI was
 negative and the same is objected to by the Company and an independent
 consultants with the approval of SBI have been appointed to submit a
 Techno Economic Viability Report.  They submitted the said report and
 the same has been submitted before the BIFR which is pending
 consideration.
 
 8. Interest to the extent of Rs. 84 Lacs (Previous periods Rs. 178.54
 Lacs) on Secured Loans.  from State Bank of India has not been provided
 in the accounts.  Consequent to that, the loss is understated to the
 extent of Rs. 84 Lacs (Previous periods Rs. 178.54 Lacs) and
 liabilities to the Bank understated to that extent.  However, the
 Company has submitted proposals for One Time Settlement (OTS) which is
 under the Bank's consideration.
 
 9. Interest to the extent of Rs. 31,56,239/- (Previous periods Rs.
 81,44,5787-) on Unsecured Loans has not been provided in the accounts.
 Consequent to that, the loss is understated to the extent of Rs
 31,56,239/- (Previous, periods 81,44,578/-) and liabilities to
 Creditors understated to that extent.
 
 10. Limits for acceptance of Public Deposits - Nil.  All public
 deposits accepted and outstanding have fallen due but not paid as on
 March 31,2000.  These deposits were accepted at the time when the
 Company had permissible limits and interest accrued, due and not paid
 are added to the respective depositors' account.  These deposits were
 since repaid in full.
 
 11. Unsecured Loans - Others Rs. 80,92,0121- represents inter-corporate
 loans.  (Previous year Rs. 2,77,19,362.30)
 
 12. Miscellaneous Expenditure to the extent not written off Rs.
 11,99,476.80 represents share issue expenses incurred in connection
 with Rights Issue (Previous year Rs. 11,99,476.80)
 
 13.  The prior period transactions (NET) consist of the following :
 
 a. Liabilities no longer
 required written back (Net)    (Cr) Rs. 54,46,936/-
 
 b. Interest on Unsecured
 Loans                          (Dr) Rs. 27,32,591/-
 
                                                    (Cr) Rs.27,14,345/-
 
 (Previous year (Dr) Rs. 10,63,154/-)
 
 14. Copenhagen Branch Account : The Branch is being continued for
 collection of Debtors and R.B.I, renewal permission has not been made.
 The branch accounts have been audited upto 30.09.98 and audited
 statements received at head office.  The audit of the branch accounts
 for the period from 01.10.98 to 31.03.2000 have not been conducted.  In
 the absence of audited statement of accounts for the branch for the
 year ended 31.03.2000, the accounts have been prepared based on the
 information available at head office and they are incorporated in the
 Balance Sheet and Profit and Loss Account.  In view of the status of
 the branch as explained above, the exchange rate adopted for
 translation of outstanding balances is continued as per the rate as on
 31.03.98 i.e., 1 US $ = Rs. 39.28.