Notes to Accounts of Twilight Litaka Pharma Ltd.

Jun 30, 2014

1. (i)The Company has only one class of shares referred to as Equity Shares having a par value of Rs. 10/- each. Each holder of Equity Shares is entitled to one vote per share. In case any Dividend is declared and paid it is done in Indian Rupees. The Dividend proposed if any by the Board of Directors is subject to the approval of Shareholders in the ensuing Annual General Meeting. The Company has not declared or paid any dividend during the year ended on 30th June 2014

(ii) On 13th March 2010, the Company had allotted 35,00,000 Convertible Warrants of Rs. 86/- ( Rs. Eighty Six) each to seven subscribers with the Option to convert the same within 18 months from the date of allotment. All the seven warrant Holders exercised their Option to convert the said warrants in to Equity Shares and accordingly between 10th June 2011 to 16th June 2011, the Company has allotted 35,00,000 Equity Shares of Rs. 5/- Each at a premium of Rs. 81/- per Share in the month of June 2011.

2. Contingent Liabilities not provide for:

* Sales Tax case filed before SalesTax Tribunal, Mumbai challenging the Order of Dy.Commissioner against levy of interest on Assessment dues for the period 2003-2004: Rs. 544,297/-

* Income Tax case filed before CIT(A), Pune challenging the order of assessing officer against income tax demand amounting to Rs. 9289 Lacs for the AY 2006-07 to AY 2012-13.

3. The Company''s Bank Accounts became NPA as indicated in the previous year. The principal amount due to the consortium of bankers amounted to Apprx. Rs. 196 Crores. The bankers have sent a demand notice under section 13 of the SARFAESI Act in respect of the Company''s Assets situated at Vadagaon, Pimpri and Vasai for an amount of Rs. 224.09Crs that included interest upto 31st July 2013. The company has made representations for waiver of interest and grant of time for repayment of these dues. The matter is pending and the company has been legally advised that'' since possession of these units still continue with the company and the operations are being carried on, title to the aforesaid properties continue to remain with the company.

4. The bankers and unsecured creditors had initiated proceedings before the Hon''ble Bombay High Court for winding up of the company. Consequent to one of the customer, who had offered to buy the company''s manufacturing unit at Baddi and which offer was informed to the court in the aforesaid proceedings, withdrawing his offer to buy the said property. Honorable Bombay High Court in their order dated 30th April 2014, appointed "Provisional liquidator" to take charge of the of Company''s Books of Account, assets and properties both movable and immovable. Further, the company, its directors, and Officers and Agents from creating any dispossession of any of the assets or properties without leave of this Court except in the ordinary and usual course of its business.As legally advised, Company has filed an application against this order for suspension of the aforesaid order. This application is pending. Company is hopeful of succeeding in its application.

5. Consequent to the losses exceeding the share capital and reserves, the company through its application u/s 15 of SICA Act 1985 has sought registration before BIFR and protection u/s 22 of SICA Act 1925. The application has been duly acknowledged wide no 1366 dated 02.07.2014. Company has also briefly narrated therein its proposal to revive the operation and turn the negative net worth to positive.

6. As a sequel to the temporary suspension on the company''s manufacturing activities at its three locations due to paucity of the working capital, the range of the products of the company do not presently have visibility in the market on account of which the payment due from customers are not forthcoming. As legally advised, the Company has therefore commenced legal proceedings for recovery against debtors aggregating to Rs. 195 Crs which are outstanding as on the balance sheet date. The company is of the view that once these proceedings are initiated coupled with the fact that the operations would recommence once the terms with the lenders are finalized the customers would come up with proposal for settlement of their dues. On this basis, the debts are considered good by the management and recoverable and hence no provision is made in respect thereof in the accounts.

7. The non- consortium bankers and other unsecured creditors, have outstanding dues for which they have initiated legal proceedings including winding up petitions in various courts. The company has made representations for waiver of interest and grant of time for repayment of these dues.

In view of the fact that proposal for waiver of interest is pending with the banks, no provision for interest for the period ending 30th June 2014 is made in the accounts. However under protest and without acknowledging the demand in respect of interest as intimated by the banks provision for contingencies made in the profit and loss accounts to the extent of Rs. 68 .50 Crores is considered adequate for this purpose.

8. Balances with statutory authorities and loans and advances are good and recoverable and are subject to confirmations and reconciliations.

9. Company has been informed that a majority of the secured Lenders [consortium of Banks] have, pursuant to an auction process assigned their dues in favour of an Asset Reconstruction Company [ARC]. ARC is presently leading the dialogue with the Company for a comprehensive settlement of the dues of the consortium Company is hopeful that the settlement as aforesaid, would benefit it and coupled with other proposals under evaluation such as developing the properties as residential/commercial complexes, negotiations with strategies investors for infusion of funds to commence the operations, etc. will go a long way in bringing about turn around in the operations and to a large extend make the existing negative net worth become positive. The Company has included the same in the presentations that have been made before BIFR. On the winding up petition filed before Bombay High Court against the Company the Company has been legally advised that since reference has already been made to BIFR, it has fair amount of chance in succeeding. Seen cumulatively Management is of the view that the Company continues to operate as a going concern.

10. The company has not provided for employee retirement benefits as required under AS 15 Issued by Company accounting standard rule 2006 since details from Actuaries are not available.

11. The Company is primarily engaged in Pharmaceuticals business along with trading of formulation activity. The Export sales of the Company are less than 10% of the total sales. In view of this, in context of Accounting Standard (AS-17)" Segment Reporting", the Company has concluded that there are no reportable segments.

12. The current period''s figures are not comparable with the previous year''s figures which were 15 months on account of extension of the accounting year by the Company.

13. Figures of the previous year have been regrouped and rearranged, wherever necessary.

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Jun 30, 2013

1 Contingent Liabilities not provide for :

a) Sales Tax case filed before Sales Tax Tribunal, Mumbai challenging the Order of Dy. Commissioner against levy of interest on Assessment dues for the period 2003-2004 : Rs. 544,297/-

30 Company is making attempts to restore the financial health and has approached the bankers with a proposal to restructure the facilities and arrive at a compromise proposal that is a win-win situation for all. The Company is also confident of infusing equity funds from a strategic investor given the highly successful recall value of the Company's products both in the domestic formulations business as well as in the international markets like it did in the past. The Company is also mindful of the enormous real estate potential of its units in Pimpri and Vadagaon and is carefully evaluating the many offers received for the development of these properties. Additionally the Company had entered into a Slump Sale agreement with Herbalife international (India) Pvt Ltd. dated 15th May 2013 for sale of the Baddi Unit of the Company. The share holders of the Company have approved the sale by postal ballot. The procedure for sale of the said unit is in process and the same will reduce the liabilities of the Company and will assist in minimising the liquidity crunch to some extent. Based on these factors viewed cumulatively, Management is of the view that the Company continues to operate as a going concern and is having the ability to meet its financial commitments. Since the Baddi unit is proposed to be sold and the steps towards this end had already been initiated, financial results relating to this unit have been separately disclosed as being relating to ' discontinuing ' operations as required under the Companies Act, 1956 and the regulations made thereunder.

2 The Company's Bank Accounts became NPA as indicated in the previous year. The principal amount due to the consortium of bankers amounted to Apprx. Rs.196 Crores. The bankers have sent a demand notice under section 13 of the SARFAESI Act in respect of the Company's Assets situated at Vadagaon, Pimpri and Vasai for an amount of Rs. 224.09 Crs that included interest upto 31st July 2013. The company has made representations for waiver of interest and grant of time for repayment of these dues. The matter is pending and the company has been legally advised that since possession of these units still continue with the company and the operations are being carried on, title to the aforesaid properties continue to remain with the company.

3.The non- consortium bankers and other unsecured creditors, have outstanding dues for which they have initiated legal proceedings including winding up petitions in various courts. The company has made representations for waiver of interest and grant of time for repayment of these dues.

In view of the fact that proposal for waiver of interest is pending with the banks, no provision for interest for the period ending 30th June 2013 is made in the accounts. However under protest and without acknowledging the demand in respect of interest as intimated by the banks provision for contingencies made in the profit and loss accounts to the extent of Rs. 57 Crores is considered adequate for this purpose.

4. The Company is primarily engaged in Pharmaceuticals business along with trading of formulation activity. The Export sales of the Company are less than 10% of the total sales. In view of this, in context of Accounting Standard (AS-17) "Segment Reporting", the Company has concluded that there are no reportable segments.

5. The current period's figures are not comparable with the previous year's figures on account of extension of the accounting year by the Company. The current period's figures are for 15 months whereas the previous year's figures are for 12 months.

6. Figures of the previous year have been regrouped and rearranged, wherever necessary.

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Mar 31, 2011

1.1 Estimated amount of outstanding contract / capital commitment Rs. 8,53,47,193/- (PY.Rs.11,54,00,000/-)

1.2 Contingent Liabilities not provided for:

a) Sales Tax case filed before Sales Tax Tribunal, Mumbai challenging the Order of Dy. Commissioner against levy of interest on Assessment dues for the period 2003-2004 : Rs. 544,297/- b) Corporate Guarantee given on behalf of subsidiary Rs. 15,00,00,000/- (PY Nil)

1.3 Convertible warrants:

On 13th March 2010, the Company had allotted 35,00,000 Convertible Warrants of Rs. 86/- ( Rs. Eighty Six) each to seven subscribers with the Option to convert the same within 18 months from the date of allotment. All the seven warrant Holders exercised their Option to convert the said warrants in to Equity Shares and accordingly the Company has allotted 35,00,000 Equity Shares of Rs. 5/- Each at a premium of Rs. 81/- per Share in the month of June 2011.

1.4 Assets taken over pursuant to the slump sale agreement appointed by the H'onble Bombay High Court with effective date as 3rd June 2009 are in the process of being transfer in the name of the company.

1.5 Dues to/from various parties are subject to confirmation.

Names of enterprises to whom the Company owes as on 31st March, 2011 :

Amsal Chem Pvt. Ltd., Asian Flavours & Fragrances, Atharv Foil Industries, Bamboat Press Pvt Ltd, Horticon, Maple Biotech, Shree Arun Packaging Co. Pvt Ltd, Super Seals, Ronak Flavours & Fragrances, Wincoat Colours & Coatings Pvt. Ltd, Ideal Cures Pvt. Ltd, Pharmaceutical Coatings Pvt. Ltd, Robin Chemicals, Sai Arts Pvt. Ltd., Sai Krupa Enterprises, Chintamani Packaging Pvt. Ltd., Innoflex Lamination Pvt., Hi tech Bioscience India Ltd., Suyash Laboratories Ltd., Vasata Biotech Pvt. Ltd., Vital Laboratories Ltd.

The above information has been complied in respect of parties to the extent representations receive from vendors.

1.6 "Related party disclosures"

(i) Name & relationship of the related parties with whom there are transactions:

(a) Key management personnel Mr. Rajendra C. Bora - Chairman

Mr. Gopal Ramourti - Managing Director

Mr. Nainish Bora - Executive Director

Mr. Abhijit Bora - Executive Director

(b) Relatives of key management personnel

Mrs. Lalita R. Bora - wife of Mr. R C Bora

Mrs. Sonia Gopal - wife of Mr. Gopal Ramourti

Mrs. Preeti Bora - wife of Mr. N R Bora

Mrs. Pooja Bora - wife of Mr. A R Bora

(c) Enterprises over which the key

management personnel has influence

Regent Financial Services Pvt. Ltd.

Dubash Investment & Finance Co. Pvt. Ltd.

G. R. Capital & Finance Pvt. Ltd.

(d) Subsidiary

Briocia Pharma (India) Limited

1.7 The Company is primarily engaged in Pharmaceuticals business along with trading of formulation activity. The Export sales of the Company are less than 10% of the total sales. In view of this, in context of Accounting Standard (AS-17) "Segment Reporting", the Company has concluded that there are no reportable segments.

1.8 Figures of the pervious year have been regrouped and rearranged, wherever necessary.

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Mar 31, 2010

1.1 Estimated amount of outstanding contract/capital commitment Rs. 11,54,00,000/-

1.2 Contingent Liabilities not provided for:

a) Claims against the Company not acknowledged as debts: Rs.58,530/-

c) Sales Tax case filed before Sales Tax Tribunal, Mumbai challenging the Order of Dy. Commissioner against levy of interest on Assessment dues for the period 2003-2004 :Rs. 5,44,297/-

1.3 Convertible warrants:

Pursuant to special resolution passed at the Extra Ordinary General Meeting of the company held on 2nd March, 2010, in accordance with the provisions contained in Securities and Exchange Board of India (Disclosure & Investor Protection Guidelines, 2003). 35,00,000 Convertible Warrants at issue price of Rs. 86/- per warrant were allotted on 13th March, 2010 to 7 subscribers. 25% of issue price become payable on the date of allotment and consequently application money of Rs. 7,52,50,000/- was received. and balance 75% would become payable at the time of exercise the option. These warrants are convertible into Equity Share within18 months from the date of allotment.

1.4 Advances:

Loans and advances include an amount of Rs. 13,51,00,000/-. Being advance for purchase of entire shares in another company, pending finalisation of the terms of acquisition.

1.5 Assets taken over pursuant to the slump sale agreement appointed by the Honble Bombay High Court with effective date as 3rd June 2009 are in the process of being transfer in the name of the company.

1.6 Dues to/from various parties are subject to confirmation.

1.7 Financial Derivative Instruments

(a) Derivative contracts entered into bythe Company and outstanding as on 31.03.10 For Hedging currency and interest rate relating risks:

(b) In respect of the transactions relating to derivatives, by way of prudence and in keeping with the Guidelines issued bythe Institute of Chartered Accountant of India, provision of Rs. 265,37,456/- to meet the deficiency arising out of marking to market the transaction was made in the accounts for the year ended 31.03.2008. As at the Balance Sheet date provision existing in books is considered adequate to cover the net deficiency and is continued.

1.8 "Related party disclosures"

(i) Name & relationship of the related parties with whom there are transactions:

(a) Key management personnel Mr. Rajendra C. Bora-Chairman

Mr. GopalRamourti- Managing Director

Mr. Nainish Bora - Executive Director

Mr. Abhijit Bora - Executive Director

(b) Relatives of key management Mrs.Lalita R.Bora-wife of Mr. R C Bora personnel Mrs. Sonia Gopal-wifeof Mr. Gopal Ramourti

Mrs. Preeti Bora-wife of Mr. N R Bora

Mrs. Pooja Bora-wife of Mr. A R Bora

(c) Enterprises over which the key Regent Financial Services Pvt .Ltd. management personnel has Dubash Investment& Finance Co. Pvt. Ltd. influence G. R. Capital & Finance Pvt. Ltd.

Note :

i) Remuneration (a) Gopal Ramourti Rs. 23,88,000/-, Nainish Bora Rs. 12,40,020/-, Abhijit Bora Rs. 12,40,020/-

ii) Rent (a)Rajendra C. Bora Rs. 8,75,556/- Rent(b)L. R.Bora Rs. 8,13,480/-, Sonia Gopal Rs. 4,96,584/-, Preeti Bora Rs. 4,37,772/-, Pooja Bora Rs. 4,37,772/- Rent(c) Regent Financial Services Pvt. Ltd. Rs. 7,56,000/-

iii) Interest (c) G. R. Capital & Finance Pvt. Ltd. Rs. 8,97,985/-

iv) Loan Received (c) G. R. Capital & Finance Pvt. Ltd. Rs. 1,66,42,003/-

v)Previous year figures are in brackets

1.9 The Company is primarily engaged in Pharmaceuticals business along with trading of formulation activity. The Export sales of the Company are less than 10% of the total sales. In view of this, in context of Accounting Standard (AS-17) “Segment Reporting”, the Company has concluded that there are no reportable segments.

1.10 Figures of previous year have been regrouped and rearranged, wherever necessary.