(4) Other Financial Information
(a) Capital - 88,31,600 Equity Shares of Rs.10 each were allotted
during the year as fully paid up, to the promoters pursuant to the
resolution passed at the annual general meeting held on 16th September
(b) Nature of security for secured loans - (i) Term loans from
financial institutions are secured by a first mortgage of the Company's
immovable properties, present and future, and first charge by way of
hypothecation of movables (except stock and book debts) including
movable machinery, machinery tools, spares and accessories, present and
future, subject to the prior charges created in favour of the Company's
bankers for the term loan and working capital facilities. (ii) Term
loan from bank is secured by a first charge over certain specified
machinery items and by a second charge over the fixed assets of the
Company. (iii) Working capital loans from bank are secured by a first
charge by way of pledge/hypothecation of raw materials,
stock-in-process and finished goods (including goods in transit), book
debts, advances and claims, present and future, and a second charge on
immovable fixed assets of the Company. (iv) All the loans are
additionally guaranteed by the Managing Director.
(c) Unsecured Loans are from Director and erstwhile Director and are
repayable within twelve months.
(d) Fixed Assets - (i) Buildings include undivided interest in land
forming part of the cost of the flat owned by the Company. (ii)
Leasehold land Rs. 4.70 lakhs is pending execution / registration of
(e) Sundry Debtors - Debts outstanding for more than six months (i) are
net of doubtful debts provided of Rs.56.44 Lakhs (2002 Rs. 41.28 Lakhs)
(ii) include debts disputed Rs. 12.47 Lakhs. (2002 Rs. 12.47 Lakhs)
and (iii) includes Rs.4.39 Lakhs not confirmed by customer.
(f) Cash and Bank balances - Balance with Scheduled Bank in Margin
account for Guarantees and Letter of Credit is based on confirmation
available from the said bank as at March 31,2002.
(g) Other Current Assets - Deposits are net of provision for deposits
doubtful of recovery Rs.7.97Lakhs (2002-Rs.7.97 Lakhs) and are subject
(h) Loans and Advances - (i) Due from Officers (a) At year end Rs. Nil
(2002 Rs. Nil) (b) Maximum amount due Rs. Nil (2002 Rs.Nil) (ii)
Includes unsecured capital Advances not confirmed by party and
outstanding over five years Rs.4.10 Lakhs (2002 Rs.4.10 Lakhs)
(i) Liabilities - (i) Small Scale Industrial Undertakings (SSI) to whom
dues are outstanding for more than thirty days are as follows:
Japtech,, Suraksha Packers Private Limited, Wonder Packs. Care print,
Chennai CNC Center, F.R.V. Associates, K.B. Hydraulic Engineering
Works, Kool Tek Industries, Metal Forms, Packaging India Private
Limited, Shree Pack, Sivaranjani Agencies, Swathi Packers Private
Limited, Swathi Polymer Products, SG Polymers, (ii) Details about dues
to SSI is based on information available with the company regarding
their status. (iii) Other Liabilities include Share Application Money
Rs.300.00 Lakhs (2002 Rs.l 183.16 Lakhs) of which Rs.300 Lakhs (2002-
705.52 Lakhs) has been recalled. The amount of Rs.300 lakhs
(representing US9,499.58) is noi repayable in foreign currency.
(j) Miscellaneous Income includes Scrap sales of Rs.3.30 Lakhs (2002
Rs.4.25 Lakhs). Sales are net of discount (other than usual trade
discount) ofRs.0.10 Lakhs (2002 Rs. 4.37 Lakhs).
(k) Materials - Cost of raw materials consumed is inclusive of carriage
inward, duty, carrying cost, component conversion charges paid to
outside agencies and contract wages.
(l) Other Expenses - (i) Rent is inclusive of amortised premium in
respect of leasehold land Rs. 0.19 Lakhs (2002 Rs. 0.19 Lakhs) (ii)
Other Expenses include net foreign exchange gain/ (loss) Rs. 1.81 Lakhs
(2002 Rs.(0.97) Lakhs)
(m) Interest dues to financial institutions and bank for the year has
been provided on an estimated basis and includes penal charges,
additional interest and liquidated damages.
(n) (i) The company had during the previous year, changed its method of
accounting (a) to provide for liability towards employees retiral
benefits of gratuity and leave encashment on an estimated basis and (b)
to recognize the liability towards customs duty in respect of goods
lying in bond at the end of the year
(ii) The Company had been providing for simple interest on loan from
financial institutions on the basis of its proposal-seeking waiver of
penal charges, additional interest and liquidated damages. During the
previous year however, pending the revised restructuring proposals of
the financial institutions, the company had estimated and recognized in
its books the penal and additional interest and liquidated damages up
to March 31, 2002 on the basis of the demands from financial
institutions, bankers by a charge of Rs.284.09Lakhs to the profit and
(iii) The company has in compliance with Accounting Standard-26
Intangible Assets issued by The Institute of Chartered Accountants of
India, changed its accounting policy to charge off in the year of
incurrence, share issue expenses, corporate/image building/product
advertisement expenses and all revenue expenses on research and
development. Accordingly, the amount of share issue expenses of Rs5.22
Lakhs remaining unamortised as at March 31, 2003 has been written off
in Schedule 18 with consequent increase in loss for the year and the
loss carried forward at the end of the year. There is no impact due to
change in accounting policy with respect to the other expenditure.
(iv) During the year, significant value of goods were returned amidst
recurring complaints of barrel cracks, leakages and tight/jammed
plungers. In August.2002, an internal assessment of the reasons of the
recurring sales return from dealers/customers of syringes, was
ascertained as mainly arising out of usage of old/expired stock of
additives, erroneous mix of polyethylene in production of barrels and
polypropylene in production of plungers which were not discernible
immediately upon production. Accordingly, the entire quantities of
syringes in stock (including sales returns) produced with the said
additives/erroneous mix was identified and scrapped. Abnormal Loss in
inventory of Rs.170.74 Lakhs represents mainly, the estimated cost of
production of syringes ultimately scrapped as explained above.
(o) The company's principal business is in medical disposables and
hence there is no separate reportable segment in terms of Accounting
Standard 17 'Segment Reporting' issued by the Institute of Chartered
Accountants of India (ICAI).
(r) In terms of Accounting Standard - 22 (AS-22) Accounting for Taxes
on Income issued by the Institute of Chartered Accountants of India,
the company has
(i) recognized deferred tax liability of Rs.313.09 Lakhs as at March
(ii) reviewed the carrying amount of deferred tax asset aggregating
Rs.293.07 Lakhs as at April 1, 2002 recognized in terms of para 18 of
AS-22 in the earlier year and written it down to Rs.284.52 Lakhs as at
March 31, 2003 representing tax effect of timing differences on account
of depreciation which is likely to reverse in future.
(iii) restricted the recognition of deferred tax asset of the current
year on account of losses and provisions and the recognition has been
restricted to the tax effect of the timing difference on account of
depreciation for the year of Rs.28.57 Lakhs.
(iv) offset the said deferred tax asset of Rs.313.09 Lakhs against
equivalent deferred tax liability since they relate to taxes on income
levied by the same governing taxation laws.
The deferred tax asset of Rs.313.09 Lakhs recognized comprises tax
effect of unabsorbed depreciation while the equivalent deferred tax
liability comprises lax effect of timing differences on account of
(s) The financial institutions have an option to convert their
outstanding, subject to a limit of 20% of their loans, into fully paid
equity shares at par on the happening of certain contingencies.
(t) Contingent liabilities - (i) Claims against the Company from the
following not acknowledged as debts: (a) Claim by suppliers Rs.52.89
Lakhs (2002 Rs. Nil Lakhs) (b) Counter claims by customers Rs.3.00
Lakhs (2002 Rs.3.00 Lakhs) (c) Demand from PF and ESI Authorities
Rs.2.37 Lakhs (2002 Rs. Nil) (d) Others Rs.4.90 Lakhs (2002 Rs. 4.39
(5) Figures for the previous year have been reclassified to make them
comparable to the classifications adopted in the current year.