Accounting Policies of Standard Medical & Pharmaceuticals Ltd. Company

1.1 BASIS OF PREPARATION

The Financial Statements of the Company have been prepared in accordance with the accounting principles generally accepted in India. The Company has prepared these Financial Statements to comply in all material respects with the Accounting Standards Notified under the Companies (Accounting Standard Rules, 2006 as amended) and relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The Accounting Policies adopted in the Financial Statements are consistent with those of previous year.

1.2 USE OF ESTIMATES

The Preparation of financial statements in conformity with generally accepted accounting principles in India requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although, these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring material adjustments to the carrying amounts of assets or liabilities in future periods.

1.3 GOING CONCERN CONCEPT

Although, the accumulated losses of the Company together with the Loss for the year ended 31st March, 2014 exceeded its Capital and Reserves, since the company with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

1.4 REVENUE RECOGNITION

All Incomes and expenditure are accounted on accrual basis.

1.5 FIXED ASSETS AND DEPRECIATION

Land is valued at cost. Other Fixed Assets including Assets given on lease are valued at Cost less accumulated Depreciation.

The carrying amount of fixed assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed the estimated recoverable amount, assets are written down to their recoverable amount.

Depreciation is provided on straight line basis as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

1.6 IMPAIRMENT OF ASSETS

The company determines whether there is any indication of impairment of the carrying amount of its assets. The recoverable amount of such assets are estimated, if any indication exists and impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

1.7 INVESTMENTS

Investments being long term in nature are carried at cost. The decline in the value, if any, being temporary in nature, has not been provided.

1.8 EMPLOYEE BENEFITS

i) Contribution to Provident Fund is recognized as an expenditure on accrual basis.

ii) The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement, death while in employment or on termination of employment with an amount equivalent to I5days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plan of the entity is an unfunded plan. The company accounts for the liability for future Gratuity benefits on the basis of an independent actuarial valuation.

iii) Leave encashment is not categorized as a retirement benefit, as the company is in the practice of paying the leave encashment benefit every year.

1.9 Deferred Income Taxes: Eventhough, the Company has unabsorbed Depreciation and carry forward losses, deferred tax asset has not been recognized in the books of accounts since generation of sufficient future taxable income in near future is uncertain.

1.1 BASIS OF PREPARATION

The Financial Statements of the Company have been prepared in accordance with the accounting principles generally accepted in India. The Company has prepared these Financial Statements to comply in all material respects with the Accounting Standards Notified under the Companies (accounting Standard Rules, 2006 as amended) and relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The Accounting Policies adopted in the Financial Statements are consistent with those of previous year.

1.2 USE OF ESTIMATES

The Preparation of financial statements in conformity with generally accepted accounting principles in India requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although, these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring material adjustments to the carrying amounts of assets or liabilities in future periods.

1.3 GOING CONCERN CONCEPT

Although, the accumulated losses of the Company together with the Loss for the year ended 31 st March, 2.013 exceeded its Capital and Reserves, since the company with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

1.4 REVENUE RECOGNITION

All Incomes and expenditure are accounted on accrual basis.

1.5 FIXED ASSETS AND DEPRECIATION

Land is valued at cost. Other Fixed Assets including Assets given on lease are valued at Cost less accumulated Depreciation.

The carrying amount of fixed assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed the estimated recoverable amount, assets are written down to their recoverable amount.

Depreciation is provided on straight line basis as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

1.6 IMPAIRMENT OF ASSETS

The company determines whether there is any indication of impairment of the carrying amount of its assets. The recoverable amount of such assets are estimated, if any indication exists and impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

1.7 INVESTMENTS

Investments being long term in nature are carried at cost. The decline in the value, if any, being temporary in nature, has not been provided.

1.8 EMPLOYEE BENEFITS

i) Contribution to Provident Fund is recognized as an expenditure on accrual basis.

ii) The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement, death while in employment or on termination of employment with an amount equivalent to 15days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plan of the entity is an unfunded plan. The company accounts for the liability for future Gratuity benefits on the basis of an independent actuarial valuation.

iii) Leave encashment is not categorized as a retirement benefit, as the company is in the practice of paying the leave encashment benefit every year

1.9 Deferred Income Taxes: Eventhough, the Company has unabsorbed Depreciation and carry forward losses, deferred tax asset has not been recognized in the books of accounts since generation of sufficient future taxable income in near future is uncertain. V y

The above liability of 15% Non-convertible Debentures, being unpaid without proper and valid claims, is continuing under long term borrowings. The said Debentures, as per the terms of issue are secured by way of second charge over leased assets and assets under Hire Purchase Agreements and book debts pertaining to such Lease and Hire Purchase assets.

In respect of loans from companies there are no specific terms and conditions as to repayment of the above Loans and Advances except that the amounts are to be repaid in a phased manner depending upon the resources available to the Company from time to time.

# Includes dues to related parties - Refer to Note No. 18.

1.1. Although, the accumulated losses of the Company together with the Loss for the year ended 31st March, 2011 exceeded its Capital and Reserves, since the company with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

1.2. Cost Convention: The Accounts have been prepared under historical cost convention.

1.3. Revenue Recognition: All incomes and expenditure are accounted on accrual basis.

1.4. Fixed Assets and Depreciation: Land is valued at cost. Other Fixed Assets including Assets given on lease are valued at Cost less accumulated Depreciation.

The carrying amount of fixed assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed the estimated recoverable amount, assets are written down to their recoverable amount.

Depreciation is provided on straight line basis as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

1.5. Investments: Investments being long term in nature are carried at cost. The decline in the value, if any, being temporary in nature, has not been provided.

1.6. Employees Benefits:

a) Contribution to Provident Fund is recognised as an expenditure on accrual basis.

b) The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement, death while in employment or on termination of employment in an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plan of the entity is an unfunded plan. The Company accounts for the liability for future Gratuity benefits on the basis of an independent actuarial valuation.

c) Leave encashment is not categorised as a retirement benefit, as the company is in the practice of paying the leave encashment benefit every year.

2. The liability under the 15% Non-convertible debentures, being unpaid without proper and valid claims, is continuing under Secured Loans. The said Debentures, as per the terms of issue are secured by way of second charge over leased assets and assets under Hire Purchase Agreements and book debts pertaining to such Lease and Hire Purchase assets.

1.1. Although, the accumulated losses of the Company together with the Loss for the year ended 31st March, 2010 exceeded its Capital and Reserves, since the company with its future plans, is hopeful of turning around, the accounts have been prepared on a going concern concept.

1.2. Cost Convention: The Accounts have been prepared under historical cost convention.

1.3. Revenue Recognition: All incomes and expenditure are accounted on accrual basis.

1.4. Fixed Assets: Land is valued at cost. Other Fixed Assets including Assets given on lease are valued at Cost less accumulated Depreciation.

1.5. Depreciation: Depreciation is provided on ‘straight line method at the rates specified in Schedule XIV of the Companies Act, 1956.

1.6. Investments: Investments being long term in nature are carried at cost. The decline in the value, if any, being temporary in nature, has not been provided.

1.7. Inventories: Stock of Stationery is carried at lower of cost and net realisable value. Cost is determined on First-in First-out basis.

1.8. Employees Benefits:

a) Contribution to Provident Fund is recognised as an expenditure on accrual basis.

b) The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement, death while in employment or on termination of employment in an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plan of the entity is an unfunded plan. The Company accounts for the liability for future Gratuity benefits on the basis of an independent actuarial valuation.

c) Leave encashment is not categorised as a retirement benefit, as the company is in the practice of paying the leave encashment benefit every year.

2. The liability under the 15% Non-convertible debentures, being unpaid without proper and valid claims, is continuing under Secured Loans. The said Debentures, as per the terms of issue are secured by way of second charge over leased assets and assets under Hire Purchase Agreements and book debts pertaining to such Lease and Hire Purchase assets.