Zenotech Laboratories

1.  Having regard to the fact that Gratuity is a defined benefit
 accrued based on actuarial valuation the amount applicable to an
 individual employee is not ascertainable and accordingly, has not been
 considered in the above computation.
 
 2.  Perquisites include contribution to Provident Fund Rs.0.90 lakhs
 
 3.  Out of the total remuneration of Rs.15.45 lakhs (Previous year:
 Rs.16.45 lakhs), Rs.3,48 lakhs (Previous year Rs.5.08 lakhs) has been
 paid by the Company to the Managing Director in his capacity as the
 Managing Director of Credence Pharmaceuticals Limited which got
 amalgamated with the Company with effect from October 1, 2005. The
 amalgamation was approved by the Honble High Court of Andhra Pradesh,
 at Hyderabad vide its Orders dated May 2,2006.
 
 4.  Contingent liabilities
 
 In respect of matters under dispute
 
 - Customs Duty                                   14.99        -
 
 5. Estimated amount of contracts remaining
    to be executed on
    capital account not provided for             245.16    1,151.92
 
 6. Secured loans:
 
 i. Term loans taken by the Company from Andhra Pradesh State Financial
 Corporation (APSFC) are secured by way of hypothecation of plant and
 machinery and mortgage of land related to Biologies facility and R&D
 facility and personal guarantee of the Director of the Company.
 
 ii. Term loan taken from the Technology Development Board (TDB) is
 secured by way of paripassu first charge on the whole of movable
 properties of the company including movable plant and machinery,
 machinery spares, tools and accessories and other movables, both
 present and future and paripassu first charge on land or other
 immovable property of the company, present and future, and personal
 guarantee of the Director of the Company.
 
 iii. Cash Credit/working capital loan from UTI Bank Limited is secured
 by way of hypothecation on first charge basis of all the current assets
 of the Company, present and future, and hypothecation on second charge
 basis of all movable plant and machinery, furniture and fixtures,
 present and future and personal guarantee of the Director.
 
 iv. Cash Credit/working capital and term loans taken from Andhra Bank
 are secured as under:
 
 a.  Term Loan of Rs.250 lakhs is secured by way of hypothecation of raw
 materials, semi finished goods, finished goods and book debts and
 hypothecation of machinery, present and future, other fixed assets
 including EMD of Land and Buildings of the erstwhile Credence
 Pharmaceuticals Limited which got amalgamated with the Company and
 personal guarantees of Directors and others.
 
 b.  Term loan of Rs.600 lakhs is secured by way of .hypothecation of
 raw materials, semi finished goods, finished goods and book debts of
 EOU Unit and hypothecation of machinery, present and future, and other
 fixed assets of the Company of ECU Unit of the erstwhile Credence
 Pharmaceuticals Limited which got amalgamated with the Company and
 personal guarantee of the Director of the company.
 
 c.  Working capital facility is secured by way of first charge on the
 current assets ranking paripassu with UTI Bank and second charge on the
 fixed assets, present and future ranking paripassu with APSFC, TDB and
 UTI Bank Limited and personal guarantee of the Director of the Company
 
 v. Term loan facility from Indian Overseas Bank is secured by way of
 first charge over the project assets of Export Oriented Unit EOU)
 ranking paripassu with Andhra Bank of the erstwhile Credence
 Pharmaceuticals Limited which got amalgamated with the Company and
 personal guarantee of the Director of the Company
 
 vi. Vehicle loans taken by the Company from ICICI Bank Limited, HDFC
 Bank Limited and Indian Overseas Bankare secured byway of hypothecation
 of respective vehicles.
 
 7. Sundry Creditors:
 
 a.  Sundry creditors include Rs, Nil (Previous year: Nil) due to Small
 Scale Industrial Undertakings (SSI). The above information has been
 complied in respect of parties to the extent to which they could be
 identified as small scale and ancillary undertakings on the basis of
 information available with the Company,
 
 b.  The Company has not received any memorandum (as required to be
 filed by the suppliers with the notified authority under the Micro,
 Small and Medium Enterprises Development Act, 2006) claiming their
 status as micro, small or medium enterprises.  Consequently the amount
 paid / payable to these parties during the year is nil,
 
 8.  Segment reporting:
 
 The Company has considered business segment as the primary segment for
 disclosure. The Company is engaged in the manufacture and trading of
 Pharmaceuticals, which in the context of Accounting Standard 17, issued
 by the Institute of Chartered Accountants of India, is considered the
 only business segment.
 
 9. Related Party Disclosures:
 
 Information relating to Related Party transactions as per Accounting
 Standard 18 issued by the Institute of Chartered Accountants of India
 
 (A) Name of the Related Party                 Relationship
 
 Zenotech Farmaceutica Do Brasil Limiteda,
 Brazil (ZFDBL)                               Subsidiary of the Company
 Zenotech Laboratories Nigeria Limited, 
 Nigeria (ZLNL)                               Subsidiary of the Company
 Zenotech Inc., USA                           Subsidiary of the Company
 Credence Organics Private Limited (COPL)     Associate of the Company
 Credence Clinical Research
  Private Limited (CCRPL)   
 Rite Diagnostics Private Limited (RDPL)      Promoter Group companies
                                             where common control exists
 Hemarus Technologies Limited (HTL)          and with whom the company 
                                             had transactions
 Credence Power Projects Limited (CPPL)
 Dr. Jayaram Chigurupati, Chairman and
 Managing Director                           Promoter and Key Management
                                             Personnel
 
 Ms, Padmasree Chigurupati Promoter and relative of Key Management
 Personnel
 
 10.  During the year, the Company entered into an agreement dated
 January 31, 2007 with another company in the pharma business, granting
 exclusive licence to use the Zenotech Intellectual Property and the
 right to market, distribute, import, sell certain products in
 territories specified in the agreement. The total consideration for the
 same is Rs. 900 lakhs.
 
 11.  a) There are no outstanding forward exchange contracts as at the
 year end.
 
 12. a) Figures for the current year are not comparable with those of
 the corresponding previous year on account of the scheme of
 Amalgamation of the Company with Credence Pharmaceuticals Limited and
 Hemarus Healthcare Private Limited. The Honble High Court of Andhra
 Pradesh at Hyderabad has given its approval for the amalgamation vide
 its order dated May 2,2006. The appointed date as per the Scheme was
 October 1,2005.