Accounting Policies of Pharmaids Pharmaceuticals Ltd. Company

Mar 31, 2013

1.1 Inventories:

Inventories are valued as under:

@ Raw Materials: Weighted average cost or net realizable value, whichever is lower.

@ Work In process: Weighted average cost or net realizable value, whichever is lower.

@ Finished Goods: Weighted average cost or net realizable value, whichever is lower.

1.2 Revenue Recognition:

Revenue from operations includes sales that are recognized when the property in the goods is transferred and are recorded net of trade discounts, rebates. The revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

1.3 Retirement Benefits for Employees:

Contribution to Provident Fund and ESI are charged to revenue on accrual basis.

1.4 Earnings per Share:

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholder by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by taking into account the aggregate of the weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares in to equity shares.

1.5 Impairment of Assets:

At each balance sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exist, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount, is provided in the books of accounts. The impairment loss recognized in the prior accounting period

---

Mar 31, 2012

1.1 Basis of Accounting:

Financial Statements are prepared under the historical cost convention.

1.2 Use of Estimates:

The preparation of financial statements' in conformity with the generally accepted accounting principles. Require estimate and assumption to be made that affect the reported amount of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates and recognized in the period in which the result materialize.

1.3 Fixed Assets:

Fixed Assets are valued at cost of acquisition inclusive of inward Freight. Duties' Taxes and incidental and trail run expenses relating to acquisition. Exchange Fluctuation on conversion of Outstanding foreign currency Loans for acquisition of Fixed Assets are adjusted to the Cost of Assets.

1.4 Depreciation:

Depreciation has been provided on Written Down Value method at the rates prescribed under schedule XIV of the companies act' 1956. In respect of additions/deletions' depreciation has been provided on pro- rata basis with reference to the month of addition/disposal.

1.5 Inventories: Inventories are valued as under

- Raw Materials: Weighted Average cost or Net Realizable value whichever lower.

- Work In process: Weighted average cost or net realizable value whichever is lower.

- Finished Goods: Weighted average cost or net realizable value whichever is lower.

1.6 Sales:

Sales have been accounted net of Duties' taxes and discount and purchases have been accounted net of discounts.

1.7 Retirement Benefits for Employees:

Contribution to provident fund' ESI and Gratuity are charged to revenue on accrual basis.

1.8 Earnings per Share:

Basic earning per share is computed by dividing the net profit or loss for the period attributable to equity shareholder by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by taking into account the aggregate of the weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares in to equity shares.

1.9 Impairment of Assets:

At each balance sheet date' an assessment is made whether any indication exists that an asset has been impaired. If any such indication exist' an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount' is provided in the books of accounts.

1.10 Taxes on Income: income tax liability for the year is calculated in accordance with the relevant tax laws and regulations applicable to the company.

Deferred Tax is recognized' Subject to the consideration of prudence' on timing differences' being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets on unabsorbed Depreciation and carry forward of losses are not recognized unless there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

---

Mar 31, 2010

A. General

: Financial Statements are prepared under the historical cost convention and in accordance with generally accepted accounting policies.

b. Fixed Assets

: Fixed Assets are stated at cost including expenditure incurred in connection with acquisition and installation thereon.

c. Depreciation

: Depreciation has been provided on straight line method at the rates prescribed under schedule XIV , of the Companies Act, 1956. In respect of additions/ deletions, Depreciation has been provided on pro-rata basis with reference to the month of addition/disposal.

d. Inventories

1. Raw Materials

Weighted average cost or net realizable value which ever is Lower.

2. Work In Process

: Weighted average cost or net realizable value which ever is Lower.

3. Finished Goods

: Weighted average cost or net realizable value which ever is Lower.

e. Retirement benefit

: Contribution to Provident Fund, ESI and Gratuity payable are charged to revenue on accrual basis.

f. Taxation

: Provisions made for Income Tax Liabilities estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961. Deferred Tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and or capable of reversal in one or more subsequent periods. Deferred Tax Assets are recognized on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

---

Mar 31, 2009

A. General : Financial Statements are prepared under the historical cost convention

and in accordance with generally accepted accounting policies.

b. Fixed Assets : Fixed Assets are stated at cost including expenditure incurred in

connection with acquision and installation thereon.

c. Depreciation : Depreciation has been provided on straight line method at the rates

prescribed under schedule XIV of the Companies Act, 1956. In respect

of additions / deletions, Depreciation has been provided on pro-rata

basis with reference to the month of addition disposal.

d. Inventories : 1. Raw Materials, Packing Materials are valued at weighted average cost.

2. Work In Process valued at estimated cost.

3. Finished Goods valued at lower of cost or realizable value.

e. Retirement benefit : Contribution to Provident Fund, ESI and Gratuity payable are charged to revenue on accrual basis.

f. Taxation : Provisions made for Income Tax Liabilities estimated to arise on the results for the year at the current rate of tax in accordance with the income tax act, 1961. Deferred Tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and or capable of reversal in one or more subsequent periods. Deferred Tax Assets are recognized on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be relized.