Accounting Policies of Vista Pharmaceuticals Ltd. Company

Mar 31, 2018

1. Corporate Information

Vista Pharmaceuticals Limited (“the Company”) domiciled in India and incorporated under the provisions of the Companies Act 1956. The Shares of the company are listed on Bombay Stock Exchange. The Company is engaged in manufacturing and selling of Pharmaceutical, medical and veterinary preparations. The Company also sells the products to its related companies (Common Directors) engaged in the manufacture of formulations. The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2. Basis of Preparation and Presentation of Financial Statements

The financial statements of Vista Pharmaceuticals Limited (“the Company”) have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. For all periods up to and including the year ended 31 March 2018, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read with Rule 7 of Companies (Accounts) Rules, 2014. These are the company’s first annual financial statements prepared in accordance with Indian Accounting Standards (Ind AS). The Company has adopted all applicable standards and the adoption was carried out in accordance with Ind AS 101 - ‘First Time Adoption of Indian Accounting Standards’. An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company are provided in Note numberl.l First TimeAdoption.

3. Basis of Measurement

These financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items in the balance sheet:

- Long-term borrowings are measured at amortized cost using the effective interest rate method.

- All assets and liabilities are classified into current and non-current based on the operating cycle of less than twelve months or based on the criteria of realisation/settlement within twelve months period from the balance sheet date.

4. Accounting Estimates

The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.

a. Depreciation and amortization: Depreciation and amortization is based on management estimates of the future useful lives of certain class of property, plant and equipment and intangible assets.

b. Employee Benefits: The Company has covered its gratuity liability according to the IND AS. The benefits are determined and carried out at each Balance Sheet date.

c. Provision and contingencies: Provisions and contingencies are based on the Management’s best estimate of the liabilities based on the facts known at the balance sheet date.

d. Fair valuation: Fair value is the market based measurement of observable market transaction or available market information.

5. Functional and presentation currency

These financial statements are presented in Indian rupees, which is also the functional currency of the Company. All financial information presented in Indian rupees has been rounded to the nearest rupees.

5. Foreign Exchange Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of transactions. Gains and losses resulting from settlement of such transactions are recognized in the Statement of Profit and Loss. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of Profit and Loss.

6. Property, plant and equipment

Transition to Ind AS The Company has elected to continue with the net carrying value of all its property, plant and equipment recognized as of April 1, 2016 (transition date) as per the previous GAAP and use that carrying value as its deemed cost.

Recognition and measurement

Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of Property, plant and equipment comprises of purchase price, applicable duties and taxes, directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets, upto the date the asset is ready for its intended use. “The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is required to be included in the cost of the respective item of property plant and equipment” and “Cost of major inspections is recognized in the carrying amount of property, plant and equipment as a replacement, if recognition criteria are satisfied and any remaining carrying amount of the cost of previous inspection is derecognized.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in profit or loss.

An asset will be treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

Capital Work In Progress: Amount incurred towards Development of New Block (B-Block) for epoxy flooring, ducting with panels and electrical Installations, plastering and other finishing works are shown as capital work in progress in the Fixed Assets Schedule as the development is in process at the reporting date i.e. as on 31.03.2018 along with Plant and machinery purchased for the production activity and which in process of Commissioning as at the reporting date.

7. Intangible Assets

Identifiable intangible assets are recognised at cost and when it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured. The asset is reviewed at the end of each reporting period is tested for impairment.

8. Depreciation and Amortization

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost less its estimated residual value. Depreciation on Property, Plant and equipment has been provided on the straight line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, maintenance, etc.

The intangible asset is testedfor impairment and is reviewed at each financial year end.

9. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

A. Financial Assets

1) Initial Recognition

In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

2) Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

a) Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate (“EIR”) method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.

b) Financial Assets Measured at Fair Value

Financial assets are measured at fair value through OCI if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.

Financial asset not measured at amortised cost or at fair value through OCI is carried at FVPL. On transition to Ind AS, the Company has opted to continue with the carrying values measured under the previous GAAP as at 1 April 2016.

c) Impairment of Financial Assets

In accordance with Ind AS 109, expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18. As Company trade receivables are realised within normal credit period adopted by the company, hence the financial assets are not impaired.

d) De-recognition of Financial Assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

B. Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Financial Liabilities

1) Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

2) Subsequent Measurement

The measurement of financial liabilities depends on their classification, as described below:

a) Financial liabilities at FVPL

Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

b) Financial liabilities at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of Profit and Loss.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

3) De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

10. Inventories

Inventories consist of goods and are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average method. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based on normal operating capacity. Packing materials are used in operating machines or consumed as indirect materials in the manufacturing process.

11. Impairment of non-financial assets

Intangible assets and property, plant and equipment, Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

12. Cash and Cash Equivalents

Cash and bank balances comprise of cash balance in hand, in current accounts with banks.

13. Employee Benefits

Short term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Defined Contribution Plan Provident Fund is a defined contribution plan of the Government of India under which both the employer and employee contribute on a monthly basis at a pre-determined rate (currently upto 12 % of employee salary) and the Company has no further obligation.

Defined Contribution Benefits The Company has an obligation towards gratuity, a defined benefit plan covering all eligible employees. The plan provides for lump sum payment in accordance with the Payment of Gratuity Act, 1972 to vested employees on retirement, death while in employment or on separation. Vesting occurs on completion of five years of service. The Company has covered its gratuity liability according to the IND AS. The benefits are determined and carried out at each Balance Sheet date.

14. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management’s estimate required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

15. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and is recognised when it isprobable that the economic benefits associated with the transaction will flow to the Company and the amount ofincome can be measured reliably. Revenue is net of returns and is reduced for rebates, trade discounts, refundsand other similar allowances. Revenue includes excise duty but is net of service tax, sales tax, value added taxand other similar taxes and GST from July 01,2017.

Sale of goods Revenue is recognized when it is probable that economic benefits associated with a transaction flows to the Company in the ordinary course of its activities and the amount of revenue can be measured reliably. Revenue is recognised, when the significant risks and rewards of the ownership have been transferred to the buyers and there is no continuing effective control over the goods or managerial involvement with the goods.

Other Income

Other income includes Interest income, Foreign Exchange Gain and other miscellaneous receipts if any,

16. Borrowing Costs

Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Also, the EIR amortisation is included in finance costs.

17. Income Tax Current Tax

Current income tax is recognised based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognised for all deductible temporary differences between the financial statements’ carrying amount of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Such assets are reviewed at each Balance Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

18. Earnings Per Share

The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The mode of valuation of Inventories has been stated in Note 10 of Significant Accounting Policies

Inventories hypothecated as primary security for availing working capital facilities and Non Fund Based limits from Vijaya Bank

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Mar 31, 2016

1. CORPORATE INFORMATION

The Company is a public company domiciled in India and incorporated under the provisions of the Companies Act 1956. Its shares are listed on BSE. The Company is engaged in manufacturing and selling of Pharmaceutical, medical and veterinary preparations. The Company also sells the products to its related companies (common Directors) engaged in the manufacture of formulations.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation & Presentation The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) to comply with the accounting standards issued by the Institute of Chartered Accountants of India and referred to Sec 129 & 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

(b)The company has regrouped/reclassified the previous year figures wherever necessary in accordance with the requirements applicable in the current year.

(c) Export sales are accounted on the basis of Bill of Lading.

(d) Export sales are recorded at the exchange rates prevailing as on the transaction date and adjusted for the exchange difference, if any, upon realization.

3. FIXED ASSETS & IMPAIRMENT

a) All fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

b) An asset will be treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

4. DEPRECIATION

a) Depreciation has been provided based on life assigned to each asset in accordance with Schedule II of the Companies Act 2013.

b) Depreciation on additions to fixed assets has been calculated on pro-rata basis from the date of addition.

c) No depreciation has been provided on the fully depreciated assets.

5. INVENTORIES

Inventories have been valued at lower of the cost or net realizable value based on the certification by the Management.

6. INVESTMENTS

Investments are stated at cost.

7. EMPLOYEE BENEFITS

a) Short- term employee benefits are recognized as an expense in the profit and loss account of the year in which the related service is rendered

b) Post employment and long term employee benefits in general are recognized as an expense in the profit and loss account during the year in which the employee has rendered services. As a onetime measure accrued liability is accounted for during the current year

c) Provision for Gratuity has been made in the books of accounts but amount has not been deposited in any means provided in the Gratuity Act.

d) Provident fund contributions, a defined contribution scheme, are charged to the profit and loss account.

8. Prior period and extra-ordinary items

Prior period and extra-ordinary items and changes in accounting policies having material impact on the financial affairs of the company are disclosed.

9. Events Occurring After The Balance Sheet Date

Material events occurring after the date of Balance Sheet are taken into cognizance.

10. Taxes on Income

Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred Tax is recognized, on timing differences, being the difference between taxable Income and accounting Income that originates in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are recognized subject to the consideration of prudence. The tax rates and laws that have been enacted or substantively enacted as of the balance sheet date are applied.

11. Contingent Liabilities

Contingent Liabilities not provided for are disclosed as notes to accounts in note no - IV.

12. Foreign Exchange Translation and Foreign Currency Transactions

Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Profit and Loss Account. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. The difference in transaction of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in Profit and Loss Account.

13. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with the Accounting Standard-20 "Earnings per Shares" notified by the Companies (Accounting Standard) Rules, 2006.

Basic earnings per equity shares is computed by dividing the net profit for the year adjusted for the effects of diluted potential equity shares, attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential shares outstanding during the year except where the results are anti dilutive.

15. Deferred Revenue expenditure

Expenditure incurred on expenses like USFDA fees, Loan Processing Charges and Share Reduction Expenses are amortized over a period of five years having due regard to the nature of expenses and the benefit that may be derived there from.

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Mar 31, 2015

(a) Basis of Preparation & Presentation

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) to comply with the accounting standards issued by the Institute of Chartered Accountants of India and referred to Sec 129 & 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year unless otherwise stated.

(b) The company has regrouped/reclassified the previous year figures wherever necessary in accordance with the requirements applicable in the current year.

(c) Export sales are accounted on the basis of Bill of Lading.

(d) Export sales are recorded at the exchange rates prevailing as on the transaction date and adjusted for the exchange difference, if any, upon realization.

3. FIXED ASSETS & IMPAIRMENT

a) All fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

b) An asset will be treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

4. DEPRECIATION

a) Depreciation has been provided based on life assigned to each asset in accordance with Schedule II of the Companies Act 2013.

b) Depreciation on additions to fixed assets has been calculated on pro-rata basis from the date of addition.

c) No depreciation has been provided on the fully depreciated assets.

5. INVENTORIES

Inventories have been valued at lower of the cost or net realizable value based on the certification by the Management

6. INVESTMENTS

Investments are stated at cost.

7. EMPLOYEE BENEFITS

a) Short- term employee benefits are recognized as an expense in the profit and loss account of the year in which the related service is rendered

b) Post employment and long term employee benefits in general are recognized as an expense in the profit and loss account during the year in which the employee has rendered services. As a onetime measure accrued liability is accounted for during the current year

c) Provision for Gratuity has been made in the books of accounts but amount has not been deposited in any means provided in the Gratuity Act. During the current year no additional gratuity provision is made as the existing provision is felt adequate to meet the gratuity payment.

8. Prior period and extra-ordinary items

Prior period and extra-ordinary items and changes in accounting policies having material impact on the financial affairs of the company are disclosed.

9. Taxes on Income

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions of the Income tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.

10. Contingent Liabilities

Contingent Liabilities not provided for are disclosed as notes to accounts in point no 11.

11. Foreign Exchange Translation and Foreign Currency Transactions

Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Profit and Loss Account.

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. The difference in transaction of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in Profit and Loss Account.

12. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with the Accounting Standard-20 "Earnings per Shares" notified by the Companies (Accounting Standard) Rules, 2006.

Basic earnings per equity shares is computed by dividing the net profit for the year adjusted for the effects of diluted potential equity shares, attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential shares outstanding during the year except where the results are anti dilutive.

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Mar 31, 2014

A. Basis of Preparation of Financial Statements:

The financial statements of the Company prepared under historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) applicable in India and the provisions of the Companies Act, 1956.

B. Use of Estimates:

The preparation of financial statements require certain estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses for the reporting period. Difference between the actual and estimates are recognized in the period in which the actual are known/ materialized.

C. Fixed Assets, Depreciation and impairment:

Expenditure of capital nature has been capitalized at cost, comprising of purchase price and the expenditure related to bringing the asset to its working condition for the intended use. Depreciation has been provided from the date the asset is put to use on written down value method at the rates and in the manner specified under XIV to the companies Act, 1956.

An asset will be treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

D. Inventories:

Inventories have been valued at lower of the cost or net realizable value based on the certification by the Management.

E. Investments:

Investments are stated at cost.

F. Income and Expenditure:

Income is accounted for the expenditure recognized on accrual basis. Sales comprise sale of goods and services, net of trade discounts. Purchases are net of transit insurance claims.

G. Employee Benefits:

(i) Short-term employee benefits are recognized as an expense in the profit and loss account of the year in which the related service is rendered.

(ii) Post employment and long term employee benefits in general are recognized as an expense in the profit and loss account during the year in which the employee has rendered services. As a onetime measure accrued liability is accounted for during the current year

(iii) Provision for Gratuity has been made in the books of accounts but amount has not been deposited in any means provided in the Gratuity Act. During the current year no additional gratuity provision is made as the existing provision is felt adequate to meet the gratuity payment.

H. Revenue Recognition

The company recognizes revenue on sale of products, net of discounts, when the product is shipped to customer i.e. when the risks and rewards of ownership are passed to the customer.

Sale of product is disclosed as net of excise duty and breakup of the same.

I. Taxes:

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions of the Income tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.

J. Foreign Exchange Translation and Foreign Currency Transactions

Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Profit and Loss Account.

Monetary assets and liabilities related to foreign currency transactions remaining un settled at the end of the year are translated at year end rates. The difference in transaction of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in Profit and Loss Account.

K. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with the

Accounting Standard-20 "Earnings per Shares" notified by the Companies (Accounting Standard) Rules, 2006.

Basic earning per equity shares is computed by dividing the net profit for the year adjusted for the effects of diluted potential equity shares, attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential shares outstanding during the year except where the results are anti dilutive.

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Mar 31, 2012

A. Basis of Preparation of Financial Statements:

The financial statements of the Company prepared under historical cost convention in accordance with the Generally Accepted Accounting Principles(GAAP) applicable in India and the provisions of the Companies Act,1956.

B. Use of Estimates:

The preparation of financial statements require certain estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses for the reporting period. Difference between the actual and estimates are recognized in the period in which the actual are known/ materialized.

C. Fixed Assets, Depreciation and impairment:

Expenditure of capital nature has been capitalized at cost, comprising of purchase price and the expenditure related to bringing the asset to its working condition for the intended use. Depreciation has been provided from the date the asset is put to use on written down value method at the rates and in the manner specified under XIV to the companies Act, 1956.

An asset will be treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

D. Inventories:

Inventories have been valued at lower of the cost or net realizable value based on the certification by the Management.

E. investments:

Investments are stated at cost.

F. Income and Expenditure:

Income is accounted for the expenditure recognized on accrual basis. Sales comprise sale of goods and services, net of trade discounts. Purchases are net of transit insurance claims.

G. Contingent Liabilities:

All liabilities have been provided for in the accounts except liabilities of contingent nature which have been disclosed at their estimated value in the notes on accounts.

H. Employee Benefits:

(i) Short- term employee benefits are recognized as an expense in the profit and loss account of the year in which the related service is rendered.

(ii) Post employment and long term employee benefits in general are recognized as an expense in the profit and loss account during the year in which the employee has rendered services. As a onetime measure accrued liability is accounted for during the current year.

Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the profit and loss account.

I. Revenue Recognition

The company recognizes revenue on sale of products, net of discounts, when the product is shipped to customer i.e. when the risks and rewards of ownership are passed to the customer. Sale of product is disclosed as net of excise duty and breakup of the same.

J. Taxes:

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions of the Income tax Act, 1961.

Deferred tax resulting from "timing difference" between, book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.

K. Foreign Exchange Translation and Foreign Currency Transactions

Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Profit and Loss Account.

Monetary assets and liabilities related to foreign currency transactions remaining un settled at the end of the year are translated at year end rates. The difference in transaction of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in Profit and Loss Account.

L. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with the Accounting Standard-20 "Earnings per Shares" notified by the Companies (Accounting Standard! Rules, 2006.

Basic earning per equity shares is computed by dividing the net profit for the year adjusted for the effects of diluted potential equity shares, attributable to the equity shareholders by the weighted average number of equity shares and dilutive potential shares outstanding during the year except where the results are aim dilutive.

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Mar 31, 2011

1) The Financial statements are prepared on the Historical cost convention on an accrual basis and in accordance with normally accepted accounting principles. Ared on the Historical cost convention on an accrual basis and in accordance with normally accepted accounting principles.

2) Fixed Assets and Depreciation: Fixed Assets are stated at cost less depreciation. Depreciation on Fixed Assets has been provided on straight line method at the rates specified under Schedule XIV of the Companies Act, 1956. Depreciation has been provided prorate from the date of the Asset is put to use.

3) Inventory: Raw Materials, Stores & Spares and Packing Materials are valued at cost. Work in Progress and Finished Goods is stated at cost or net realizable value whichever is lower.

4) Research and Development:

a) Capital Expenditure is shown separately under respective heads of fixed assets.

b) Revenue Expenditure is included under the respective heads of expenditure.

5) Current Tax and Deferred Tax: No Provision for taxation is made as the Company has no taxable profits.

Deferred tax is recognized, subject to the considences, being the difference between taxable income and accounting income that originate in one period and may be reversed in one or more subsequent periods.

Since the Company has seration of prudence, on timing differubstantial carried forward business losses and unabsorbed depreciation, it is unlikely to have taxable profits in near future and hence it is not considered necessary to create deferred tax assets in accordance with the Accounting

Standard - 22 issued by the Institute of Chartered Accountants of India.

6) Investments: Investments are shown at cost.

7) Recognition oflncome: SalesrepresenttheCIF price of Goods sold. Exchange fluctuations and other export benefits shall be accounted for intheyear of receipt/realization.

8) 1/10 Value of stores and consumables such as machinery punches and dies, packing machine change parts are written of during theyear.

9) Contingent Liabilities: Contingent Liabilities not provided for are disclosed by way of notes to Balance Sheet.

10) Retirement Benefits: Gratuity has been provided for according to the Service Rules of the Company.

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Mar 31, 2010

1) The Financial statements are prepared on the Historical cost convention on an accrual basis and in accordance with normally accepted accounting principles.

2) Fixed Assets and Depreciation: Fixed Assets are stated at cost less depreciation. Depreciation on Fixed Assets has been provided on straight line method at the rates specified under Schedule XIV of the Companies Act, 1956. Depreciation has been provided prorate from the date of the Asset is put to use.

3) Inventory Raw Materials, Stores & Spares and Packing Materials are valued at cost. Work in Progress and Finished Goods is stated at cost or net realizable value whichever is lower.

4) Research and Development :

a) Capital Expenditure is shown separately under respective heads of fixed assets.

b) Revenue Expenditure is included under the respective heads of expenditure.

5) Current Tax and Deferred Tax : No Provision for taxation is made as the Company has no taxable profits.

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 may be reversed in one or more subsequent periods.

Since the Company has substantial carried forward business losses and unabsorbed depreciation, it is unlikely to have taxable profits in near future and hence it is not considered necessary to create deferred tax assets in accordance with the Accounting

Standard - 22 issued by the Institute of Chartered Accountants of India.

6) Investments: Investments are shown at cost.

7) Recognition of Income: Sales represent the CIF price of Goods sold. Exchange fluctuations and other export benefits shall be accounted for in the year of receipt/ realization.

8) 1/10 Value of stores and consumables such as machinery punches and dies, packing machine change parts are written of during the year.

9) Contingent Liabilities: Contingent Liabilities not provided for arc disclosed by way of notes to Balance Sheet.

10) Retirement Benefits: Gratuity has been provided for according to the Service Rules of the Company.